taxes. The most exported products from the Philippines were food products, manufactured goods and alcohol products such as beer, rum and gin, while the Soviet Union exported industrial equipment, minerals, tools, machinery, coal and oil to the Philippines. During the 1972–1984 period the Philippines recorded a favourable balance of trade with the Soviet Union, but from 1985 onwards the Philippines exports of traditional products to the Soviet Union were insufficient. A feasibility study was conducted in 1982 as part of a joint venture of the Philippines and the Soviet Union to construct a one million ton per year cement plant. It would significantly add to the current annual output level of four to four and a half million tons of cement the Philippines exported. The project was discontinued because of financial constraints. It would have been the first Soviet industrial project in the Philippines. Factors affecting bilateral relations The Philippines has long been plagued by poverty and agrarian issues, which led to the rise of the country's communist and secessionist movements. The Philippines is a Catholic majority nation which is an important factor. The Catholic Church is opposed to Communism which it associates with atheism, violence and dictatorship. The Philippine government was also hostile to atheists, and up until 1986 atheism was a crime punishable by 10 years in jail. The United States and Japan's economic aid to Southeast Asian nations, complicates relations. The Red Scare and the intensified insurgency made the Filipinos suspicious towards the Soviet Union. The Soviet Union remained distrustful of the Philippines because of its ties with the United States. The Philippines had assisted the United States in both the Korean War and the Vietnam War. The Soviet Union had been involved in both wars. Alleged Soviet sponsored terrorism Reports of the New People's Army and radical labour groups being sponsored by the Soviet Union circulated. The Philippine Senate urged an investigation of Soviet aid to labour groups and insurgents, and the sighting of submarines allegedly belonging to the Soviet Union. The Soviet Ambassador to Manila, Vadim Shabalin, denied Soviet involvement and such allegations were "flagrantly distorting" to the Soviet Union's foreign policy towards the Philippines. References Soviet Union Bilateral relations of the Soviet Union