Philippines Defence and Security Report Q2 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 the Moro Islamic Liberation Front (MILF). The insurgencies have led to approximately 1,700 people being killed or injured since 2000. Human rights organisations regard the Philippines as one the countries hardest hit by terrorism in the Asia Pacific. Towards the end of 2007, insurgents and rebel forces re-grouped and launched a new wave of violence in the south. The situation prompted the government to engage in higher intensity counter-insurgency operations in the first quarter of 2008. There are now concerns that the new counter-offensives could de-rail peace talks with rebel groups.

Defence expenditure has received a boost in recent years - mainly in response to the growing security threat from insurgent groups. However, the Philippines government is still heavily reliant on foreign financial assistance, mainly from the US. In recent years the government has received up to US$30mn a year in Foreign Military Financing (FMF). The US has announced that it will be placing restrictions on the Philippines' FMF allocation due to concerns over the government's human rights record.

Approximately US$2mn would be withheld. It is likely that if the Philippines' human rights record improves over 2008, the full US$30mn will be restored.

During 2007, the Philippines' defence industry remained relatively small compared with other regional defence industries, especially Australia and Singapore. In the final quarter of 2007, a boost was given in the shape of the Department of National Defence (DND) announcing 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.