Philippines Defence and Security Report Q1 2013
- ID: 2364034
- December 2012
- Region: Philippines
- 70 pages
- Business Monitor International
BMI's Philippines Defence & Security Report Q1 2013 examines the country's strategic position in the Asia Pacific region and the wider world. It provides an overview of the contemporary geopolitical challenges facing the country and the challenges it may face in the future.
The report examines the trends occurring in the country's current and future defence procurement and the order of battle across its armed forces. Its general conclusion is that tensions between the Philippines and China have reached a serious level and that the Association of Southeast Asian Nations (ASEAN) -
which is deeply conflicted over how to handle China - will not be much help to the Philippines as it looks to protect its interests against what it regards as Chinese aggression.
As a result of the security threat from China, the modernisation of the long-neglected Armed Forces of the Philippines (AFP) has become a major political priority for Manila. As well as increasing the 2013 defence budget, the government has earmarked additional procurement funds and has begun investing heavily in new capabilities for its air force and navy. By also engaging in defence diplomacy with a whole range of allies - especially those who are also wary of China - Manila is also making good progress in procuring second-hand military equipment often on very favourable terms.
The United States will be key to this effort, and Manila has signalled that US-Philippine relations are entering a new era by granting US Navy ships permission to start using Subic Bay - a strategically important naval facility from which US forces were evicted 20 years earlier. While US forces will not officially be based at Subic, they are expected to be in the Philippines more frequently and in greater numbers as Manila actively encourages the US pivot to Asia as a hedge against Chinese expansion.
In terms of domestic security, Manila reached a landmark agreement with the Moro Islamic Liberation Front, which it is hoped could bring an end to decades of conflict on the southern island of Mindanao.
The two sides are now embarking on the complex task of establishing a self-governing Muslim Homeland. This process will be difficult constitutionally, and could also be undermined by Muslim groups that do not support the deal. But overall, the conclusion of years of negotiations between Manila and the MILF leadership signifies a very bright moment in the history of the Philippines.
Over the last quarter BMI has revised the following forecasts/views:
- The peace deal with the MILF is discussed in detail, including the implications of the opposition of another separatist group, the MNLF.
- The latest developments in relations between the Philippines and China are also discussed.
Though relations have improved slightly since they hit rock bottom in Q2 2012, talks in September between China's president-in-waiting Xi Jinping and Interior Minster Manuel Roxas failed to break through the impasse surrounding the two countries' conflicting territorial claims.
- In contrast, US-Philippines relations continue to warm. A port call by a US Navy aircraft carrier,
Marine exercises and the decision to re-open Subic Bay to the US military are among the signs that the Philippines has determined to make itself a key enabler in the US's strategic rebalancing to the Asia-Pacific region.
- The Philippines' legislature confirmed the 2013 defence budget of U$2.9bn, an allocation which should enable further procurements. Several surface ships for the navy, and up to 50 aircraft,
including fixed-wing aircraft and helicopters, are in the armed forces' procurement plans. SHOW LESS READ MORE >
Executive Summary 5
SWOT Analysis 7
Philippines Security SWOT 7
Philippines Defence Industry SWOT 8
Philippines Political SWOT 9
Philippines Economic SWOT 10
Philippines Business Environment SWOT 11
Global Political Outlook 12
South East Asia Security Overview 17
The Strategic Outlook For The 2010s 17
Challenges And Threats To Stability And Security 17
Main Islamist Militant Groups In South East Asia 20
Other Regional Threats 24
Sino-US Rivalry In South East Asia 26
The Outlook For South East Asia 27
Security Risk Analysis 29
Asia Pacific Risk Ratings 29
Table: Asia Pacific Regional Security Ratings 29
Table: Asia Pacific State Vulnerability To Terrorism Index 30
Philippines Security Risk Ratings 30
Political Overview 32
Domestic Politics 32
Long-Term Political Outlook 33
Security Overview 36
Internal Security Situation 36
Moro Islamic Liberation Front (MILF) 38
Moro National Liberation Front (MNLF) 40
Abu Sayyaf 40
Table: Philippine Insurgent Groups 42
External Security Situation 42
Table: Instances of Piracy In South East Asia, 1996-2006 44
The South China Sea 44
Bilateral Military Relations 46
Armed Forces And Government Spending 49
Armed Forces 49
Government Expenditure 50
International Deployments 53
Weapons Of Mass Destruction 54
Market Overview 55
Industry Trends And Developments 56
Arms Trade Overview 57
Industry Forecast Scenario 58
Armed Forces 58
Table: Philippines' Armed Forces, 2000-2008 ('000 personnel) 58
Table: Philippines' Available Manpower For Military Services, 2010-2017 ('000, aged 16-49, unless otherwise stated) 58
Defence Expenditure 59
Table: Philippines' Government Defence Expenditure, 2010-2017 59
Table: Philippines' Defence Expenditure Scenario - Changing % Of GDP, 2010-2017 (US$mn) 60
Defence Trade 61
Table: Philippines' Defence Exports, 2010-2017 (US$mn and % change y-o-y) 61
Table: Philippines' Defence Imports 2010-2017 (US$mn and % change y-o-y) 61
Table: Philippines' Defence Trade Balance, 2010-2017 (US$mn and % change y-o-y) 62
Macroeconomic Outlook 63
Table: Philippines - Economic Activity, 2011-2016 65
Company Profiles 66
Arms Corporation of the Philippines (Armscor) 66
Government Arsenal 67
BMI Methodology 68
How We Generate Our Industry Forecasts 68
Defence Industry 68