Future of the Philippines’ Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022
Philippines’ defense expenditure recorded a historic-period CAGR of 11.55% by the end of 2017. The growing strength and assertiveness of the Chinese Navy with regards to territorial claims in the South China Sea has spurred the government to enhance its military capabilities. The consequent demand for defense equipment will revolve around fighter and multi-role aircraft, frigates, infrastructure construction, submarines, naval vessels and surveillance equipment. As a percentage of GDP, defense expenditure will post a forecast-period CAGR of 0.9%.
Capital expenditure allocation, which stood at an average of 38.5% during the historic period, will increase over the forecast period due to the procurement of fighter aircraft, frigates, and infrastructure construction projects. The share of revenue expenditure decreased from 61.5% during the historic period to 59.1% over the forecast period, as the defense department is increasing efforts to reduce operational costs. Population growth will inflate the per capita defense expenditure at a CAGR of 10.28%.
During 2012-2016, the US emerged as the largest supplier of military hardware to the Philippines with a 40%+ share of defense imports, followed by Indonesia and South Korea. The US mainly supplied aircraft and naval vessels, a trend anticipated to continue over the forecast period due to the country’s dependence on the US as a defense supplier. However, the government is beginning to widen its supplier base and plans to procure equipment from Indonesia, South Korea, Italy, Spain, Poland, Australia and Israel.
Homeland security budget will record a historic period CAGR of 1.40% to value US$2.3 Billion, driven by investments in counter terrorism and drug smuggling activities.
The report “Future of the Philippines’ Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022” offers detailed analysis of the Philippines defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.
Particularly, this report provides the following -
- The Philippines defense industry market size and drivers: Detailed analysis of the Philippines defense industry during 2018-2022, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country’s expenditure and modernization patterns.
- Budget allocation and key challenges: Insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country.
- Porter’s Five Force analysis of the Philippines defense industry: Analysis of the market characteristics by determining the bargaining power of suppliers, bargaining power of buyers, threat of substitution, intensity of rivalry, and barriers to entry.
- Import and Export Dynamics: Analysis of prevalent trends in the country’s imports and exports over the last five years.
- Market opportunities: Details of the top five defense investment opportunities over the next 10 years.
- Competitive landscape and strategic insights: Analysis of the competitive landscape of the Philippines defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis.
Companies mentioned in this report: United Defense Manufacturing Corporation (UDMC), Leonardo, Remington Arms Company, ELTA Systems Ltd and Raytheon
- The defense budget of Philippines for the year 2017 is US$2.9 billion. For the historic period, 2013-2017, the defense budget of the country registered a CAGR of 11.55%. The defense budget is currently being driven by efforts to modernize the army, threats from terrorist organizations, and tensions in the South China Sea.
- During the historic period, the Philippines MoD allocated an average of 38.5% of the total defense budget to capital expenditure, while an average of 61.5% was reserved for revenue expenditure. Over the forecast period, allocation towards capital expenditure is expected to increase at an average of 40.9%.
- The MoD is expected to invest in multi-role aircraft, diesel electric submarines and infrastructure construction.
Reasons to buy
- This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Philippines defense industry market trends for the coming five years
- The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period
- Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins, and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector
- A deep qualitative analysis of the Philippines defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts
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