Baguio City was established by Americans in 1900 at the site of an Ibaloi village known as Kafagway. The name of the city is derived from the word bagiw in Ibaloi, the indigenous language of the Benguet Region, meaning 'moss'. The city is at an altitude of approximately 1,500 metres (4,900 ft) in the Luzon tropical pine forests ecoregion conducive to the growth of mossy plants and orchids.
Because of its altitude, Baguio City was designated by the Philippine Commission as the Summer Capital of the Philippines on June 1, 1903. It was incorporated as a chartered city by the Philippine Assembly on September 1, 1909, as authored by former Philippines Supreme Court Justice George A. Malcolm. The City of Baguio celebrated its Centennial last September 1, 2009.
The region around Baguio was first settled primarily by the Ibalois and the Kankanaeys. In the nearby town of La Trinidad, Benguet, Spaniards established a commandante or military garrison, but Kafagway, as Baguio was once known, was barely touched.
Baguio City is located some 1,500 meters above sea level, nestled within the Cordillera Central mountain range in northern Luzon. The city is enclosed by the province of Benguet. It covers a small area of 57.5 square kilometers. Most of the developed part of the city is built on uneven, hilly terrain of the northern section. When Daniel Burnham plotted the plans for the city, he made the City Hall as a reference point where the city limits extend 8.2 kilometres (5.1 mi) from east to west and 7.2 kilometres (4.5 mi) from north to south. It is the highest major Philippine city in terms of elevation.
Baguio City features a subtropical highland climate under the Koppen climate classification. The city is known for its mild climate. Average temperature ranges from 15 to 23 degrees Celsius. It is usually lower during the late and early months of the year. The lowest recorded temperature was 6.3 degrees Celsius on January 18, 1961. This is in contrast to the all-time high of 30.4 degrees Celsius recorded on March 15, 1988 during the 1988 El NiƱo season. Baguio seldom exceeds 26 degrees Celsius even during the warmest part of the year.
Like many other cities with a subtropical highland climate, Baguio sees noticeably less precipitation during its dry season. However, the city has an extraordinary amount of precipitation during the rainy season, with the months of July and August having on average more than 1,000 mm of rain. Baguio averages over 4500 mm of precipitation annually.
Tourism is one of Baguio's main industries due to its weather and history. During the year end holidays some people from the lowlands prefer spending their vacation in Baguio, to experience cold temperatures they rarely have in their home provinces. Also, during summer, especially during Holy Week, tourists from all over the country flock to the city. During this time, the total number of people in the city doubles. To accommodate all these people there are more than 80 hotels and inns available. Local festivities such as the Panagbenga Festival also attract both local and foreign tourists. Baguio is the lone Philippine destination in the 2011 TripAdvisor Traveler's Choice Destinations Awards, Asia category, with the city being among the top 25 destinations in Asia.
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