i received a PM about this thread.

this is a very poorly written question. here are just a couple of points:

* the clear intention of a sentence like this one is to express a contrast -- the sentence mentions a ridiculous number of islands, but (BUT) then goes on to say that only (ONLY) two of those islands contain a majority of the country's area.
note my use of "but" and "only" here! you don't have to use those exact words, but it's impossible to convey the actual, intended meaning of this sentence without some sort of transition that indicates contrast.
here are a few ways in which this sentence could be written in a way that actually conveys the contrast:
The Republic of the Philippines encompasses over 7000 islands, but 2/3 of its area is contained in only two of those islands.
Even though the Republic of the Philippines encompasses over 7000 islands, 2/3 of its area is contained in only two of them.

* the "of them" construction is strange and awkward. this is a construction that exists in the language, but it's not a "normal" construction; it's the kind of thing that you try not to use, unless the simpler, more common alternatives don't work.
in other words, if GMAC were to write a sentence like this one, they would be much more likely to use "two of which contain...", a much more pedestrian/"normal" construction. (of course, that construction would still have the problem of not containing a contrast transition.)
... or you could just eliminate the "of them" altogether. for instance, this is a perfectly good sentence:
on the floor are four boots, two with square toes and two with round toes.
--> here, there's no need to clutter the sentence with "of which..." or (especially) "of them...", either of which would add unnecessary bulk and awkwardness to the sentence.

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this problem is a very good illustration of why it's best to stick with official sources, and to study everything about the official problems (including the NON-underlined parts of the problems). quality is better than quantity, especially when "quantity" consists largely of poorly written material.