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Market Research Report

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

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Future of the Philippines' Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023
Published: December 18, 2018 Content info: 97 Pages
Description

"Future of the Philippines' Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023", published by GlobalData, provides readers with detailed analysis of both historic and forecast defense industry values, factors influencing demand, the challenges faced by industry participants, analysis of industry leading companies, and key news.

This report offers detailed analysis of the Philippines defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.

In particular, it provides an in-depth analysis of the following -

  • The defense industry market size and drivers: detailed analysis of the Philippines defense industry during 2019-2023, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country's expenditure and modernization patterns
  • Budget allocation and key challenges: insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country
  • Porter's Five Force analysis of the Philippines defense industry: analysis of the market characteristics by determining the bargaining power of suppliers, bargaining power of buyers, threat of substitution, intensity of rivalry, and barriers to entry
  • Import and Export Dynamics: analysis of prevalent trends in the country's imports and exports over the last five years
  • Market opportunities: details of the top five defense investment opportunities
  • Competitive landscape and strategic insights: analysis of the competitive landscape of the Philippines defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis.

Scope

  • The Philippines' defense expenditure recorded a CAGR of 12.43% over the historic-period and stood at US$3.0 billion in 2018.
  • Over the forecast-period, it is anticipated to register a CAGR of 11.14% to value US$5.2 billion in 2023.
  • The growing strength and assertiveness of the Chinese Navy with regards to territorial claims in the South China Sea has spurred the government to enhance its military capabilities.

Reasons to buy

  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Philippines defense industry market trends for the coming five years
  • The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period
  • Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins, and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector
  • A deep qualitative analysis of the Philippines defense industry covering sections including demand drivers, Porter's Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts.
Table of Contents
Product Code: GDDF0539MR

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
  • 8.2. Disclaimer 97

List of Tables

  • Table 1: The Philippines Ground Forces Strength 15
  • Table 2: Philippines Air Force Strength 18
  • Table 3: Philippines Navy Strength 19
  • Table 4: The Philippines - Ongoing Development and Procurement Programs (US$ Million), 2014-2018 20
  • Table 5: The Philippines - Future Procurement Programs 21
  • Table 6: Philippines- Top Defense Procurement Programs by Value (US$ Million), 2018-2023 22
  • Table 7: The Philippines - Defense Expenditure (PHP Billion and US$ Billion), 2014-2023 25
  • Table 8: The Philippines - GDP Growth and Defense Expenditure as Percentage of GDP Growth (%), 2014-2023 28
  • Table 9: The Philippines - Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 30
  • Table 10: The Philippines - Defense Capital Expenditure (PHP Billion & US$ Billion), 2014-2023 32
  • Table 11: The Philippines - Defense Budget Split by Army, Navy, Air Force, and Other Expenditure (%), 2014-2023 34
  • Table 12: Philippines Defense Budget in PHP Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2014-2023 36
  • Table 13: Philippines Defense Budget in USD Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2014-2023 38
  • Table 14: The Philippines - Per Capita Defense Expenditure (US$), 2014-2023 40
  • Table 15: The Philippines - Homeland Security Expenditure (PHP Billion and US$ Billion), 2014-2023 41
  • Table 16: Terrorism Index 45
  • Table 17: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023 48
  • Table 18: Top Philippines Defense Sectors by Value (US$ Million), 2018-2023 52
  • Table 19: The Philippines - Countertrade/Offset Regulations 63
  • Table 20: Philippines Budget Formation Timetable 65
  • Table 21: FMS deals to Philippines 68
  • Table 22: Top Defense Suppliers in Philippines Defense Industry - By Value (US$ Million) 2018-2023 71
  • Table 23: Competitive Landscape of The Philippines Defense Industry 72
  • Table 24: Raytheon - Key Products 73
  • Table 25: Raytheon - alliances 74
  • Table 26: Raytheon - Recent Contract Wins 74
  • Table 27: United Defense Manufacturing Corporation - Key Products 75
  • Table 28: Leonardo - Key Products 76
  • Table 29: Leonardo-Finmeccanica - Recent Contract Wins 77
  • Table 30: Remington Arms Company, LLC: Key Products 78
  • Table 31: Remington Arms Company, LLC. - Recent Contract Wins 78
  • Table 32: ELTA Systems Ltd: Key Products 79
  • Table 33: ELTA Systems Ltd - Recent Contract Wins 79

List of Figures

  • Figure 1: The Philippines - Defense Expenditure (PHP Billion), 2014-2023 26
  • Figure 2: Philippines Defense Expenditure (US$ Billion), 2014-2023 26
  • Figure 3: Philippines GDP Growth and Defense Expenditure as Percentage of GDP Growth (%), 2014-2023 29
  • Figure 4: The Philippines - Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 31
  • Figure 5: The Philippines - Defense Capital Expenditure (PHP Billion), 2014-2023 33
  • Figure 6: The Philippines - Defense Capital Expenditure (US$ Billion), 2014-2023 33
  • Figure 7: The Philippines - Defense Budget Split, Army, Navy, Air Force and Other Expenditure, 2014-2023 35
  • Figure 8: The Philippines - Defense Budget, by Service (PHP Billion), 2014-2023 37
  • Figure 9: The Philippines - Defense Budget by Service (US$ Billion), 2014-2023 39
  • Figure 10: The Philippines - Per Capita Defense Expenditure (US$), 2014-2023 40
  • Figure 11: The Philippines - Homeland Security Expenditure (PHP Billion), 2014-2023 42
  • Figure 12: The Philippines - Homeland Security Expenditure (US$ Billion), 2014-2023 42
  • Figure 13: Terrorism Heat Map, 2018 44
  • Figure 14: Terrorism Index, 2018 47
  • Figure 15: The Philippines - Benchmarked Against Key Markets (%), 2014-2018 vs. 2019-2023 49
  • Figure 16: Defense Expenditure of the World's Largest Military Spenders (US$ Billion), 2018 and 2023 50
  • Figure 17: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2018 51
  • Figure 18: The Philippines - Multi-Role Aircraft Market Size (US$ Million), 2018-2023 53
  • Figure 19: The Philippines - Diesel Electric Submarine Market Size (US$ Million), 2018-2023 54
  • Figure 20: The Philippines - Corvette Market Size (US$ Million), 2018-2023 55
  • Figure 21: The Philippines - Defense Imports (US$ Million), 2013-2017 (TIV values*) 57
  • Figure 22: The Philippines - Defense Imports by Country (%), 2013-2017 58
  • Figure 23: The Philippines - Defense Imports by Category (%), 2013-2017 59
  • Figure 24: Industry Dynamics Porter's Five Forces Analysis 61
  • Figure 25: The Philippines - GDP Per Capita at Constant Prices (US$), 2015-2025 81
  • Figure 26: The Philippines - GDP at Current Prices (US$ Billion), 2015-2025 82
  • Figure 27: The Philippines - Exports of Goods and Services (LCU Billion), 2005-2014 83
  • Figure 28: The Philippines - Imports of Goods and Services (US$), 2005-2014 84
  • Figure 29: The Philippines - Gross National Disposable Income (US$ Billion), 2009-2012 85
  • Figure 30: The Philippines - LCU per US$, 2015-2024 86
  • Figure 31: The Philippines - Market Capitalization of Listed Companies (US$ Billion), 2005-2012 87
  • Figure 32: The Philippines - Market Capitalization of Listed Companies (Percentage of GDP), 2005-2012 88
  • Figure 33: The Philippines - Government Cash Surplus/Deficit as a Percentage of GDP (LCU), 2005-2012 89
  • Figure 34: The Philippines - Goods Exports as a Percentage of GDP (%), 2005-2014 90
  • Figure 35: The Philippines - Goods Imports as a Percentage of GDP (%), 2005-2014 91
  • Figure 36: The Philippines - Services Imports as a Percentage of GDP (%), 2005-2014 92
  • Figure 37: The Philippines - Services Exports as a Percentage of GDP (%), 2005-2014 93
  • Figure 38: The Philippines - FDI, Net (BoP, Current US$ Billion), 2005-2014 94
  • Figure 39: The Philippines - Net FDI as a Percentage of GDP, 2005-2014 95
  • Figure 40: The Philippines - Mining, Manufacturing, Utilities Output (PHP Trillion), 2005-2014 96
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