They plan to get more 2nd-hand ships from Italy and possibly South Korea. Radars (both land-based and airborne) are also being eyed but unclear on who will provide it.
Philippine Air Force to get new warplanes by 2014 | Inquirer Global Nation
They plan to make an official public announcement by the end of this month. Some speculating it could be announced by the President himself as part of his State of the Nation Address on the 23rd, if I'm not mistaken. It it doesn't definitely by the end of the month because that is their self-imposed deadline.
It would be nice to know how they're going to spend and divide the $1.8B funds allocated for defense materiel. They've already identified 12 TA50 LIFT, helicopters both attack and transport, radars, etc. How about infrastructure planning and build-up? I wonder how much was allocated for frigates and corvettes, and I think they're also planning to acquire another USCG Hamilton from the USA? Just thinking if they're also planning to retrofit the Hamiltons with some type of advanced radars and/or armaments/missiles and where they're going to acquire these hardware and/or munitions? Seems like they're implementing their plans sweeply and they could be spending/allocating the $1.8B in less than 5 years?
Very possible but we should wait for the official word on really how much funds is being allocated and in how many years. The P70-75B ($1.8B) is just the initial tranche on a widely believed total $10B funds allocation. P500B ($12B) was also recently suggested and increased from the original suggestion of P428B ($10B) w/c I greatly suspect is a direct result of China's aggressiveness as the original P428B suggestion was made way back 2011 before the current spat with China. The PAF already said they are building more airbases to accommodate the new air assets.
$10 to $12B will greatly enhance the Philippines military readiness down the line including their coast guard. Where do you think they'll the sum of money? Everyone here in this forum is saying that the Philippines is broke and can't afford anything? That is why they're asking all their allies to provide assistance. However, the Philippine senate president, Juan Ponce Enrile, relative to the $30M foreign aid allocation from the USA, was saying that to just forget it because it doesn't mean much. Basically is an token aid just to say that they're providing the Philippines something, in a nutshell?
Yeah the 88 y.o. Senator got insulted. I think he got over that already. Kind of reminded me when some Indians either got insulted or laughed at UK when they threaten to stop giving 280 million pounds a year of aid to India if they don't choose the Eurofighter for their MMRCA.
This is a good thing to know. So experts are not always right after all. I'm pulling for the Philippines to do the same thing like India did. I would like to see an small country get their military armaments and stand-up to a big bully. I bat for the small guys anytime.
There is a huge difference between what India did and what you are suggesting the Philippines do. India took a maximum of $5 billion from their foreign currency reserves and used it to finance loans for infrastructure development. They collected interest on the loans, that is how they turned a profit, the Philippines definitely won't turn a profit buying military equipment. Improving infrastructure also tends to improve the general economy, leading to higher tax revenues, buying military equipment from abroad has no tax revenue advantages.
At least you know it can be done. The real question is if it's a wise thing to do - so you are correct on that as well. My only point to cite the Indian example is to point out that it can be done because I want to counter the notion that it can't absolutely be done and whoever said that it can't is being narrow-minded or simply not aware that it is being done by countries already. However, as you know whether a country wanting to dip their fingers on their excess reserves for military modernization is a wise move or not is highly debatable and best left on the discretion of the country. Besides, we are not only talking about excess reserves (reserves in excess of 6-7 months worth of imports and liabilities) here but idle reserves. I can easily argue that the $1B (sourced from the foreign reserves I may add) the Philippines is going to contribute to the IMF for use in Europe at a measly 0.3% interest rate is not a wise move and best given as a loan to the military for much needed military procurements. But they are bent on contributing for the cause. So, that is that. In the end it is up to their discretion.
Using foreign currency reserves to fund other spending, while it can be done, has a lot of implications. I will just point out 2 historical examples:
The devaluation of the Thai baht triggered the Asian Financial Crisis.
Speculative currency attacks on the British pound caused it to devalue by 20% or more.
The PRC claim in the South China Sea was made in 1947, before there was any knowledge of oil and gas in the area. Their claim has not changed since 1947. Hence, to say that they are claiming it solely because of the potential energy resources there is to ignore all other evidence to the contrary.
Once the JMSU expired, PRC and Vietnam started doing their own surveys in the area.
Estimates of resources and proven resources are 2 very different things. And the estimates cannot be proven due to the tensions surrounding any attempts by any country to do proper surveys in the area to determine exactly how much resources there are. This was what the JMSU was meant to do, so that the countries know how much oil & gas they are fighting over.
People will question because it affects their credit rating. I just read today that the Government of the philippines just got upgraded by S&P to one grade below investment grade. They got upgraded in part because of their foreign currency reserves. This upgrade results in lower borrowing costs to the government. If they raid the FCR, they could easily get donwgraded, jeopardizing their long term prospects and making it more difficult to buy any weapons systems in the future.
Yah - that worked out so very well for Libya for instance
Aircraft sat in crates or tanks just driven straight out into the desert and parked up with neither the crews nor the maintenance available.You're not actually reading any of the replies to this thread are you ?
When PRC built structures on Mischief Reef (claimed by the Philippines) that was sighted by AFP in 1994, was there such urgency to buy hardware? Why wasn't the reserves used at that time to prevent a recurrence of such incidents?
To be fair, Mischief Reef surprised a lot of countries. But, after Mischief Reef, Scarborough Shoal should not have been surprising for those paying attention to what has been happening in the area for the past 10 years.
However, following the signing of the DOC, the Philippines and Vietnam were seen as breaking ranks with ASEAN unity in signing the JMSU with the PRC.
There are plenty of reports from around that time criticising the Philippines and Vietnam for breaking ranks with the rest of ASEAN and hence, undermining ASEAN unity. Which is probably 1 of the factors contributing to the current situation in the South China Sea.
First, let's establish that the PH has excess reserves. If they are going to dip their fingers on those reserves it would only be a small part of the excess reserves and not their "core" reserves for a lack of a better term. Philippines currently has 11.2 months of reserves and projected ot go up to $80B or 12 months worth of imports and liabilities. The ADB only recommends holding 3 months while the IMF only recommends holding 6-7 months and that 6-7 months recommendation already has taken into account the lessons of the 1997 Asian financial crisis.
Asian nations urged to tap idle forex reserves for dev’t | The Manila Bulletin Newspaper Online
Intellitrest | Economics | Intelli5 | Better use of huge foreign exchange reserves
Asia Seeks to Diversify Record Foreign-Exchange Reserves as Dollar Falls - Bloomberg
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