Philippines Defence & Security Report Q4 2014 - New Study Released

While opportunities exist in the Philippines defence market in the short term, opportunities in the medium-to-long term are far from certain. Although the defence spending is increasing, there is a need to place it within a regional perspective. We think that the risk of Philippine involvement in an interstate conflict has increased slightly over the last quarter. Also, the scaling back of US support for the Philippines counter-terrorism program may not bode well in the long term.

Relations with China further deteriorated following the Philippines sentencing of 12 Chinese fisherman arrested for illegal fishing in non-disputed waters. Another trial of Chinese fishermen for supposed activity near the disputed Spratly Islands risks aggravating further tensions between the two countries. BMI thinks that these incidents demonstrate the Philippines readiness to respond to what it perceives as Chinese aggression.

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This readiness to respond to China is also evident from the increases in the defence budget directed at both personnel and equipment. While the air force still lacks fighter jets, the acquisition of 12 FA-50 attack/fighter aircraft as well as 8 attack AW 1090 Power helicopters does provide it with minimum offensive capabilities. The Philippines Navy is also aiming to boost its offensive capabilities through procurement of armaments systems for the frigate building project.

Beyond the defence issues, the Philippines faces a number of internal security challenges notably terrorism and criminality. BMI notes that while the Philippines is developing successful defence relationships with countries with common interests, notably Japan and the US, to respond to China, outside support to counter internal security risks is diminishing.

Key BMI Forecasts

* We forecast the value of arms and ammunitions imports to reach USD57bn and USD66.1bn for the end of 2014 and 2015 respectively.
* We forecast the Philippines defence trade balance to continue...

The Philippines Defence & Security Report features Business Monitor International (BMI)'s independent forecasts for national and international security, the defence industry, military expenditure, employment in arms production, and arms imports and exports, as well as examining industry trends and prospects, national and multinational arms producers and the regulatory environment.

BMI's Philippines Defence & Security Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Philippine defence and security industry.

Key Benefits

* Benchmark BMI's independent defence and security industry forecasts on Philippines to test other views - a key input for successful budgetary and strategic business planning in the Philippine defence and security market.

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