| WASHINGTON, April 27
WASHINGTON, April 27 A new 10-year security pact
between the United States and the Philippines could lead to
modest increases in U.S. weapons sales in coming years,
especially for maritime surveillance equipment, analysts said on
The agreement, to be signed on Monday, establishes a
framework for an increased U.S. military presence in the
Philippines and is part of a "rebalancing" of U.S. resources
toward the fast-growing Asia-Pacific region.
The deal comes 23 years after the Philippine Senate voted to
evict the U.S. military from bases there, ending 94 years of
American military presence in the Asian nation.
Virginia-based defense analyst Loren Thompson noted that the
deal came as China increasingly encroaches on maritime areas
claimed by Manila in the South China Sea, even as a long-running
Muslim insurgency in the southern Philippines is abating.
"What Manila needs most in the way of military technology is
weapons that can help enforce its claim to areas in the South
China Sea," Thompson said.
That could include P-8A maritime patrol aircraft built by
Boeing Co, which have already been sold to India,
conventional munitions such as the Standard Missile-3 built by
Raytheon Co and small warships built by Lockheed Martin
Corp or Australia's Austal, he said.
A renewal of counter-insurgency operations would probably
move helicopters up the list of acquisition priorities,
particularly UH-60 Black Hawk helicopters built by Sikorsky
Aircraft, a unit of United Technologies Corp.
U.S. industry executives said they were keeping a close eye
on the situation in the Philippines, but arms sales ultimately
would be negotiated between the two governments.
"This is a new market," said one industry executive who was
not authorized to speak publicly. "Chinese ambitions are making
many countries look for support from the United States - even
ones that have been out of the U.S. sphere for some time, such
as the Philippines and Vietnam."
Byron Callan, an analyst with Capital Alpha Partners,
cautioned that any U.S. arms sales would be limited in scope,
given the small size of the Philippines' defense budget, which
totaled just $2.2 billion in 2013, according to the
International Institute for Strategic Studies.
"You could assume that 25 percent or so of that amount is
for investment," Callan said. "And that spending power is not
going to move the needle for U.S. defense primes."
Jim McAleese, a Virginia-based defense consultant, said the
agreement's initial focus was on ship porting and military
rotations, but arms sales could follow later.
He said purchases of large weapons systems like Boeing's
P-8A, which sells for about $275 million, would likely have to
be funded by U.S. foreign military aid.
(Reporting by Andrea Shalal; Editing by Jim Loney and Paul