Philippines Defence and Security Report Q3 2008

The Philippines is subject to multiple insurgent threats from militant Islamic groups including the Abu Sayyaf Group (ASG), the National People’s Army (NPA) and the Moro Islamic Liberation Front (MILF). The geography of the Philippines, an archipelago of some 7,000 islands, makes the effective quarantining of dissident groups almost impossible. The country is politically stable. Even though President Gloria Macapagal Arroyo will remain under increasing pressure, we retain our view that Arroyo's position still appears secure. Crucially, Arroyo retains the support of the military - largely ruling out a successful coup - and her allies dominate the House of Representatives, which all but precludes a successful impeachment attempt.

Defence expenditure has received a boost in recent years - mainly in response to the growing security threat - but the government remains heavily reliant on foreign financial assistance, mainly from the US. 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.