Future of the Philippines' Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023

Table of Contents

1. Introduction 7

• 1.1. What is this Report About? 7
• 1.2. Definitions 7
• 1.3. Summary Methodology 9
• 1.4. About GlobalData 10

2. Executive Summary 11

3. Market Attractiveness and Emerging Opportunities 12

• 3.1. Current Market Scenario 13
  • 3.1.1. Primary threat perception 13
  • 3.1.2. Military doctrine and strategy 14
  • 3.1.3. Military fleet size 15
  • 3.1.4. Procurement Programs 20
  • 3.1.5. Top Procurement Programs by Value (US$ Million) 2018-2023 22
  • 3.1.6. Social, political, and economic environment and support for defense projects 23
  • 3.1.7. Political and strategic alliances 24
• 3.2. Defense Market Size Historical and Forecast 25
  • 3.2.1. The Philippines’ defense budget to grow at a forecast-period CAGR of 11.14% 25
  • 3.2.2. Tensions in the South China Sea and modernization initiatives to drive the defense industry 27
  • 3.2.3. Defense budget as a percentage of GDP to increase to 1.0% over the forecast period 28
• 3.3. Analysis of Defense Budget Allocation 30
  • 3.3.1. Share of capital expenditure will slightly increase over the forecast period 30
  • 3.3.2. Capital expenditure is anticipated to record a forecast-period CAGR of 11.23% 32
  • 3.3.3. The army accounted for the largest percentage share of the overall Philippines’ defense budget 34
  • 3.3.4. Army defense expenditure to reach US$1.9 billion in 2023 36
  • 3.3.5. Per capita defense expenditure to rise over the forecast period 40
• 3.4. Homeland Security Market Size and Forecast 41
  • 3.4.1. The homeland security market will record a forecast-period CAGR of 6.63% 41
  • 3.4.2. Illicit drug trade drives homeland security expenditure 43
  • 3.4.3. The Philippines falls under the “highly affected” category in the terrorism index 44
  • 3.4.4. The Philippines faces threats from terrorist organizations 45
  • 3.4.5. The Philippines has a terrorism index score of 7.1 47
• 3.5. Benchmarking with Key Global Markets 48
  • 3.5.1. The Philippines defense budget expected to increase over the forecast period 48
  • 3.5.2. The Philippines’ defense expenditure is lower than other Asia countries 50
  • 3.5.3. The defense budget as a percentage of GDP will increase over the forecast period 51
• 3.6. Market Opportunities: Key Trends and Drivers 52
  • 3.6.1. Multi-role aircraft 53
  • 3.6.2. Diesel electric submarines 54
  • 3.6.3. Corvettes 55

4. Defense Procurement Market Dynamics 56

• 4.1. Import Market Dynamics 57
  • 4.1.1. Limited domestic defense capabilities to drive the country’s defense imports 57
  • 4.1.2. The US, South Korea, and Indonesia are the major suppliers for The Philippines 58
  • 4.1.3. Aircraft and naval vessels accounted for 88.6% of defense imports 59
• 4.2. Export Market Dynamics 60
  • 4.2.1. The Philippines does not export any defense equipment 60

5. Industry Dynamics 61

• 5.1. Five Forces Analysis 61
  • 5.1.1. Bargaining power of suppliers: low 62
  • 5.1.2. Bargaining power of buyers: medium 62
  • 5.1.3. Barrier to entry: low to medium 62
  • 5.1.4. Intensity of rivalry: low to medium 62
  • 5.1.5. Threat of substitution: high 62
• 5.2. Market Regulation 63
  • 5.2.1. Countertrade/offset policy aids the development of the domestic defense industry 63
  • 5.2.2. Government unveils new procurement rules 64
• 5.3. Market Entry Route 65
  • 5.3.1. Budgeting process 65
  • 5.3.2. Procurement Policy and Process 68
  • 5.3.3. Foreign military sales (FMS) 68
  • 5.3.4. Collaborations provide market entry opportunities 69
• 5.4. Key Challenges 70
  • 5.4.1. Increase in corruption and lack of transparency impedes industry growth 70

6. Competitive landscape and Strategic Insights 71

• 6.1. Competitive landscape Overview 71
• 6.2. Key Companies 73
  • 6.2.1. Raytheon: overview 73
  • 6.2.2. Raytheon: products 73
  • 6.2.3. Raytheon: Recent announcements and strategic initiatives 73
  • 6.2.4. Raytheon: Recent Contract Wins 74
  • 6.2.5. Raytheon: Recent Contract Wins 74
  • 6.2.6. United Defense Manufacturing Corporation: overview 74
  • 6.2.7. United Defense Manufacturing Corporation: key products 75
  • 6.2.8. United Defense Manufacturing Corporation: recent announcements and strategic initiatives 75
  • 6.2.9. Leonardo: overview 76
  • 6.2.10. Leonardo: products and services 76
  • 6.2.11. Leonardo: recent announcements and strategic initiatives 76
  • 6.2.12. Leonardo: recent contract wins 77
  • 6.2.13. Remington Arms Company, LLC: overview 78
  • 6.2.14. Remington Arms Company, LLC: key products and services 78
  • 6.2.15. Remington: recent announcements and strategic initiatives 78
  • 6.2.16. Remington Arms Company, LLC: Recent Contract Wins 78
  • 6.2.17. ELTA Systems Ltd: overview 79
  • 6.2.18. ELTA Systems Ltd: key products and services 79
  • 6.2.19. ELTA Systems Ltd: recent announcements and strategic initiatives 79
  • 6.2.20. ELTA Systems Ltd: Recent Contract Wins 79

7. Business Environment and Country Risk 81

• 7.1. Economic Performance 81
  • 7.1.1. GDP per capita at constant prices (US$) 81
  • 7.1.2. GDP at current prices (US$) 82
  • 7.1.3. Exports of goods and services 83
  • 7.1.4. Imports of goods and services 84
  • 7.1.5. Gross national disposable income (US$ billions) 85
  • 7.1.6. LCU per US$ (period average) 86
  • 7.1.7. Market capitalization of listed companies (US$ billions) 87
  • 7.1.8. Market capitalization of listed companies (percentage of GDP) 88
  • 7.1.9. Government cash surplus/deficit as a percentage of GDP (LCU) 89
  • 7.1.10. Goods exports as a percentage of GDP 90
  • 7.1.11. Goods imports as a percentage of GDP 91
  • 7.1.12. Service imports as a percentage of GDP 92
  • 7.1.13. Services exports as a percentage of GDP 93
  • 7.1.14. Foreign direct investment (FDI), net (BoP, current US$ billions) 94
  • 7.1.15. Net FDI as a percentage of GDP 95
  • 7.1.16. Mining, manufacturing, utilities output (PHP trillion) 96

8. Appendix 97

• 8.1. About GlobalData 97