His historical reputation might be exemplified by this site's judgment of his character: "Vain, bigoted, ruthless, ambitious"! He has certainly borne the brunt of the Black Legend of Spain. His failures (the Spanish Armada) are magnified while his successes (the Battle of Lepanto) are minimized. Philip ruled as absolutely as Louis XIV, except that his two great goals were the spread of Catholicism and the suppression of heresy. He used the Inquisition as the tool for the latter.
He also has his virtues: he was hard-working, a great patron of the arts, pious, generous, loyal, and courageous. (Any site that does not include the good with the bad obviously has an agenda!)
When Elizabeth I came to the throne he suggested himself as a consort (after having been married to her half-sister Mary I). Philip was not immediately her implacable enemy--he even argued against the attempts to depose her and excommunicate her before 1569-1570. It was only when the English pirates began to harrass Spanish ships and Elizabeth began to support the Protestant cause in his kingdom of the Netherlands--and after Mary, Queen of Scots was executed--that Philip planned the invasion of England with the Armada in 1588.
As Christopher Check points out on his CD set on the Battle of Lepanto, the failure of the Armada is well-known, while the success of the battle against the Turks in the Mediterranean is undiscovered. It is unfortunate that in admiring Elizabeth I or William the Silent, two of Philip II's opponents, some historians cannot also fairly evaluate him--as though admitting his efforts, successes, and good characteristics would somehow minimize the other leaders' stature.