This paper summarizes the roots and status of the conflict in Mindanao, a large island with a current population of about 18 million -the second oldest internal conflict in the world- briefly examines the social costs, estimates the direct economic costs, lists the indirect costs and the dynamic advantages from cessation of the conflicts, and suggests certain key criteria for lasting resolution of the conflict. The overriding conclusion is that such a resolution carries the potential for vast economic and social advantages not only for the conflict-affected areas, but for Mindanao as a whole. Indeed, a sustainable settlement of this persistent conflict could carry a major benefit for the development of the country -largely through the ensuing improvement of the international image of the Philippines as a predictable and peaceable place to do business.
