The Republic of the Philippines is an archipelago of more than 7,000 islands located in the western Pacific Ocean and has a coastline of 36,289 kilometers and has a population of over 103 million people. With political problems in the region coupled with its fast growing economy, the Philippines has now become the focus of the international Defense, Security and the Civil Defense Industries.
The near-term outlook for the Philippines’ economy remains buoyant with earlier reforms set out by the previous administration continuing to pay off and spur economic growth.
The Philippine economy gathered steam during third-quarter 2017, bolstered by strong contribution from net exports and a jump in government spending. The economy is expected to grow at an average annual rate of 6.3% during 2019-21. Medium-term growth prospects for the Philippines have remained generally upbeat.
More importantly, with labor costs rising elsewhere in the region, investors are starting to focus their attention on the Philippines once again. As the domestic manufacturing base expands, the export performance should also improve, supporting overall growth.
Bloomberg recently reported that the Philippines, gifted with a young population and supported by USD50 billion of revenue from remittances and outsourcing, plus an additional boost from President Duterte’s USD160 billion-worth of infrastructure projects covering 64 big-ticket infrastructure projects in the pipeline will create many jobs and will undoubtedly reduce unemployment. The International Monetary Fund estimates the Philippine economy to be worth USD311 billion.
On December 11, 2012, Republic Act no. 10349 known as the ‘AFP Modernization Act’ under then President Aquino came into force. It is a 15-year defense modernization program with initial funding of PHP75 billion being allocated for the first period of the program. Unlike previous defense modernization efforts in the Philippines, this time, contracts are being awarded and money is being spent. With the First Phase of the Modernization Program almost fully completed, the Agencies have now embarked on the “Second Horizon” of the Program. All of these have resulted in the Philippines rapidly becoming one of the most active and progressive defense and security marketplaces in Southeast Asia.
Leading market forecasters have indicated that there will be a sustained growth in defense spending throughout the next five years of the Second Horizon phase, with potential market value of nearly USD6 billion anticipated by 2024.
The importance of the Philippine defense market is reflected by the decision of the country’s major stakeholders to actively support and endorse the ADAS Series.
Look up the Market Potential and the Modernization Program of the Philippine Armed Forces to find out more.