Philippines Defence & Security Report Q1 2008

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.