The Weekly Wire: Week of 8/3/15
Saudi Arabia has requested 600 additional Patriot Advanced Capability-3 (PAC-3) Missile Systems from the United States following an agreement between Iran and Western nations concerning Tehran’s nuclear program. If completed, the deal for 600 missiles, associated equipment, personnel, and test missiles is estimated to reach $5.4 billion. The request is a clear response from the Saudis to the Western deal with Iran – who perceive the deal as heightening the threat to GCC countries posed by Iranian missile capabilities. Saudi Arabia’s insistence on fully stocked Patriot PAC-3 missile systems reaches back many years, with a bevy of requests and deals over the past twelve months. Beginning in 2011, the Saudis signed a $1.7 billion deal to upgrade existing systems to the PAC-3 configuration. Following that, they signed a $1.75 billion deal in late December 2014 for 202 Patriot missiles, and in April 2015 requested nearly $2 billion worth of additional Patriot missiles. Just last week, the Pentagon spent nearly $1.5 billion on Patriot Missile Systems for five allied nations – again including Saudi Arabia. With nearly $10 billion worth of Patriot PAC-3 requests running through American contractors and government in the last twelve months, it is evident that the Saudis view Iran as a legitimate and growing danger, and aim to leverage the PAC-3 system heavily in their defense. As often is the case for the region, Avascent would not be surprised to see other GCC nations to follow the Saudi lead with deals for PAC-3 and/or THAAD systems in the near future.
The Philippines has proposed a 48% year-on-year increase in its defense budget for 2016. The request for 2016 totals PHP 172 billion (USD $3.9 billion) – up from the PHP 116 billion (USD $2.6 billion) in 2015. The requested increase notably includes PHP 25 billion (USD $564 million) earmarked for the acquisition of two frigates ($406 million) for the Philippine Navy (PN), two twin-engine long-range patrol aircraft ($135 million), six close-air support aircraft ($112 million), and three aerial surveillance radars ($60 million). The remainder of the $564 million is slated to go toward continued payment for 12 FA50 light fighter aircraft ordered from South Korea in early 2014. Together, these sums represent the resumption of a 15-year military modernization effort launched by President Benigno Aquino on December 11, 2012 – an effort postponed in 2014 when defense spending was reduced 26% to assist with recovery and relief from Super Typhoon Haiyan and other natural disasters that year.