The U.S. State Department's annual ``Trafficking in Persons'' report, released Monday, moves the Philippines up a tier -- from its watch list of problem nations, to one that is making significant efforts to combat trafficking.

The report congratulated the Philippines for last year's improvements, saying the government ``has stepped up efforts to implement its anti-trafficking law and made initial progress in implementing strategies to combat trafficking in persons, particularly in prosecuting human traffickers.''

But it said the Philippines still does not fully comply with minimum standards and remains a source, transit and destination country for men, women and children trafficked for sexual exploitation or forced labor.

The report noted that the Justice Department tripled the number of prosecutors, resulting in a fourfold increase in cases presented for prosecution. The government also sponsored ``impressive efforts (to help) trafficking victims,'' including arrangements with nongovernment organizations and Philippine embassies to provide shelter, counseling and medical assistance to victims.

The number of Filipino women sent to Japan as entertainers in 2005 was almost half that of 2004, because of Japan's stricter visa requirements, the report said. Most of the women are forced into prostitution, it said.

According to the report's ranking, ``Tier 1'' countries fully comply with minimum international standards while those in ``Tier 2'' -- including the Philippines -- do not fully comply but are making significant efforts to combat the problem.

Down a rank is the ``Tier 2 Watch List'' -- which lists countries that have made efforts to combat trafficking but still have a significant number of victims and, until this year, had included the Philippines.

``Tier 3'' countries are the worst offenders and could face restrictions on U.S. government assistance.