New Defense research report from Business Monitor International is now available from Fast Market Research
Boston, MA -- (SBWIRE) -- 09/05/2013 -- The Philippines is in the process of restoring its armed forces to state of operational effectiveness, with the Aquino government determined to transform the country's obsolete military into a 'minimum credible deterrent'. This policy has largely been driven by Chinese pressure, as territorial disputes with Beijing over maritime possessions in the South China Sea are now Manila's chief regional security concern.
Manila is pursuing a two-track approach to its 'China problem'. First, it is investing heavily by its own modest standards in new and second-hand military equipment, restoring its air force to combat capability and acquiring naval platforms that will enable it to defend its offshore territories. Secondly, it is also pursuing diplomatic channels. In particular, it has referred its ongoing dispute with China to the International Tribunal on the Law of the Sea (ITLOS), and in this endeavour it appears to have gained the upper hand. This move wrong-footed China, which has rejected the ITLOS proceedings even though it has ratified the UN Convention on the Law of the Sea (UNCLOS). The tribunal will go ahead whether China co-operates or not, and given China's defiance of a treaty it has itself signed the panel may well rule in Manila's favour. However, even if the Philippines gains a moral and legal victory in the UN forum, it is unlikely to change the facts on the ground, with China highly unlikely to relinquish control of the disputed Scarborough Shoal.
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Meanwhile, Manila continues to engage with a number of key allies - notably the US, Japan, South Korea and several European countries - as it urgently seeks to modernise its armed forces. In Q2 the government confirmed that it will procure two new frigates for around US$450mn in what will be its first acquisition of new-build naval platforms; these will complement second-hand ships and patrol boats arriving from the US and Japan. In general, the US will be key to Manila's modernisation efforts, and Manila has signalled that US-Philippine relations are entering a new era by granting US Navy ships permission to start using Subic Bay - a strategically important naval facility from which US forces were evicted 20 years earlier. While US forces will not officially be based at Subic, they are expected to be in the Philippines more frequently and in greater numbers as Manila actively encourages the US 'pivot' to Asia as a hedge against Chinese expansion.
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