Defence Industry
The first organized by the Government attempt to establish a national defence industry was initiated by President Ferdinand Marcos in 1974 with the Self-Reliant Defence Posture (SRDP). President Marcos stated the SRDP in order to meet the immediate need for military hardware to support the Armed Forces of the country mission against the escalating secessionist movement in southern Philippines and the insurgency by the New People’s Army in the 1970’s.
Although in the early years the program was successful with 15 defence corporations supplying military hardware to the Armed Forces the Philippines lost later its way in ensuring the provision of broad-based security.
Since the beginning of the previous decade the Department of Defence tries to revive the SRDP AS part of the Capability Upgrade Program focused on securing indigenous production of weapon systems platforms and armaments.
There are currently two state controlled defence industries, the Government Arsenal (GA) and the Philippine Aerospace Development Corporation (PADC).
The first one was established on the 22nd of June 1957 and it is under the control of the Department of National Defence. The company manufactures small arms assault rifles, sniper rifles, ammunitions and other munitions for the Armed Forces of the Philippines and export clients.
On July the 1st 2010 the Government initiated a modernization program that would improve the production capabilities of the company. The program was implemented in four Phases a) Enhancement of the GA capacity in production of small arms ammunition, b) Development of the GA capability in weapons manufacture, c) Establishment of various munitions testing facilities and d) Development of GA capability to manufacture medium and large caliber ammunitions.
The second state controlled defence industry is the Philippine Aerospace Development Corporation established in 1973. The mandate of the new company was to establish a reliable aviation and aerospace industry to design and manufacture all form of aircraft and to develop indigenous capabilities in the maintenance repair and modification of aviation equipment.
The company tried in the 1980’s to develop the Hummingbird helicopter and the Defiant single engine trainer aircraft but both programs were scrapped due to licensing issues and lack of Government support. On March 15 2019 the President of the Philippines decided to transfer the control of the company from the Ministry of Transport to the Department of National Defence.
Beside these state controlled companies there are at least three private defence industries that manufacture fire arms.
These are:
a) Ferfrans established in 1998 and manufactures rifles based on the AR-series. The company has sold rifles such as SOAR (Special Operations Assault Rifle) to the Philippine National Police and the Armed Forces of the country, as well as to Malaysia, Indonesia and Peru,
b) United Defence Manufacturing Corporation established in 2006 which manufactures M1911-pattern pistols and AR-15-pattern rifles and carabines. The company established in 2018 a joint venture with the South Korean firm S&T Motiv to manufacture firearms in the Philippines for the Armed Forces and the Police of the country as well as for clients abroad.
Finally, the third company is Armscor Global Defence Inc. the oldest private defence industry of the Philippines established in 1905. The company builds pistols, shotguns, sporting rifles, revolvers, fireparts and ammunitions.
More than 40 years since the initiation of the SRDP the Government policy failed to achieve its objectives. Except from Armscor Global Defence Inc. most private defence industries found difficult to sustain production due to various reasons such as insufficient defence acquisition budgets, inflation etc.
In order to revive SRDP, the Government of the Philippines decided recently to allow the accommodation of foreign defence companies that want to establish their manufacturing plants in the country at the premises of the Government Arsenal military industrial economic complex in Limay at the island of Bataan.
The state-owned industrial complex covers an area of 370-hectare and according to the new Government law the foreign defence industries that will decide to build their production facilities at Limay, will enjoy the privileges of and incentives like those under the Philippine Economic Zone Authority (PEZA).
The new Government policy will be implemented to other areas of the country besides the premises of the Government Arsenal military industrial economic complex in Limay.
The Armed Forces of the country aim to establish defence industry hubs across the country in military owned land, under a new agreement signed between the Department of National Defence and PEZA. The new proposed defence industrial ecozones will ensure the continuous supply of material to the Armed Forces of the Philippines and the modernization of the local defence industry.
Bedsides the development of these defence industry complexes the Government of the Philippines aimed to enhance the self-reliance of the country’s defence industry through incentives and controls that promote domestic suppliers and by creating a new office of the Undersecretary for defence technology research and industry development to supervise and fund these efforts.
This new policy was materialized with the “Philippine Defense Industry. Development Act of 2019" or the PDIDA under which preference would be given to in country companies and to local resources for the development of national defence capabilities.
Foreign defence systems would be procured only when they cannot be locally produced manufactured or otherwise created. When foreign suppliers are used, the Undersecretary will work to ensure that technology is transferred to the Philippines and that local employment is generated as part of each deal.
Furthermore, the Philippines Government signed on the 18th od December 2018 an MoU on defence industry cooperation with Turkey which focused on Government-to-Government acquisition as well as the development production co-production and transfer of defence technology between the two countries especially in the field of shipbuilding for the Navy of the Philippines.
A similar defence industry agreement was signed a year later between the Philippines and Indonesia. The MoU was signed on February 27, 2020 and aims to advance the defence industrial collaboration between the two countries in the fields of Logistics, and Defence Industry Cooperation.