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Philippines Defence and Security Report Q1 2008

Published by: Business Monitor International

Published: Nov. 28, 2007 - 44 Pages


Table of Contents


Executive Summary
SWOT Analysis
Philippines Security SWOT
Philippines Defence Industry SWOT
Philippines Economic SWOT
Philippines Political SWOT
Philippines Business Environment SWOT
Political Overview
Corruption Allegations Threaten Stability
Security Risk Analysis
BMI’s Security Ratings
Table: Philippines Regional Ratings
Table: State Terrorism Vulnerability Index
Regional Security: South East Asia Q108
Overview
Inter-State Conflicts
Internal Conflicts
Philippines Terrorist Risk
Philippines Conflict Risk
Security Overview
Internal Security Situation
The Moro Islamic Liberation Front (MILF)
The Moro National Liberation Front (MNLF)
The Abu Sayyaf Group (ASG)
Table: Philippines Insurgent Groups
External Security Situation
Piracy
Table: Piracy in South East Asia (1992-2005)
Bilateral Military Relations
Defence Industry
Armed Forces
Defence Budget
Table: Philippines Regional Armed Forces
International Deployments
Weapons of Mass Destruction
Market Structure
Industry Trends & Developments
Arms Trade Overview
Procurement Trends & Developments
Industry Forecast Scenario
Government Expenditure
Table: Philippines Defence Sector - Historical Data & Forecasts
Table: Philippines Defence Sector - Historical Data & Forecasts (continue)
Macroeconomic Forecast
Table: Philippines - Economic Activity
Company Profiles
Arms Corporation of the Philippines (Armscor)
Government Arsenal (GA)
BMI Forecast Modelling
How we generate our industry forecasts:
Defence Industry
Sources:


Abstract

The Philippines faces several internal insurgencies which have significantly destabilised the security
situation. Insurgent and militant groups include the Abu Sayyaf Group (ASG), the National People’s
Army (NPA) and Jemaah Islamiah (JI). Overall the internal security situation deteriorated significantly in
the Philippines in recent months. Some 1,700 people have been killed or injured since 2000. Human
rights organisations now regard the Philippines as one the countries hardest hit by terrorism in the Asia
Pacific. In Q407, insurgents and rebel forces re-grouped and launched a new wave of violence in the
south. The situation prompted the government to increase the profile of troops and to engage in more
direct combat with insurgents. There are now concerns that the new counter-offensives could de-rail
peace talks with rebel groups, such as the Moro National Liberation Front (MNLF).


Defence expenditure has received a boost in recent years - mainly in response to the growing security
threat from insurgent groups. In Q407 the Philippines Department of National Defence (DND) revised its
expenditure policy, the Defence Planning Guide (DPG). Although not officially stated as the primary
motivation, it is thought the revision of the DPG is due to the escalating insurgency in the south. Other
defence expenditure related developments in 2007 include the government confirming that the Capability
Upgrade Programme (CUP) would receive a further US$131.7mn to purchase additional equipment and
helicopters. The funds are derived from two sources, with some US$27mn from the Philippine Congress
and US$111mn approved by the President, Gloria Macapagal Arroyo. The Q307 approval of funds is the
second lot approval of CUP funds in 2007. In the first quarter of 2007, Arroyo approved some US$222mn
to procure a range of helicopters and patrol boats.


During 2007, the country’s defence industry did not grow significantly, but talks with the Polish defence
firm Bumar Group in Q406 may lead to an establishment of a small ammunition factory in the
Philippines. An exploration study, scheduled for release in the coming quarters, will provide options on
upgrading existing facilities or building new ones. In the final quarter of 2007, the Philippines defence
received a boost when the Department of National Defence (DND) announced a new initiative to support
the local defence industry. The government is seeking to enhance the capabilities of the armed forces
through manufacturing its own weapons, presumably to tailor-make weapons that suit counter-insurgency
efforts.



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