On Thursday, DefenseNews.com reported that over in the Philippines, continued incursions into territorial fishing waters have the local navy shopping for used U.S. warships to beef up its fleet. Over the past two years, the archipelagic nation has bought two refurbished American "frigates" for about $10 million apiece. Actually, the vessels, formerly named USCGC Hamilton and USCGC Dallas, and now BRP Gregorio del Pilar and BRP Ramon Alcaraz, respectively, were classified as Coast Guard cutters when in U.S. possession.
In recent months, Chinese naval vessels have been sailing into disputed waters off the Philippine coast, an area that Manila calls the West Philippine Sea but that China insists is really the South China Sea. Already, the increasing numbers of Chinese warships swarming the area have frightened off not just Philippine civilian fishing boats. The overwhelming force being deployed forced the Philippine Navy to back down and cede control of a fishing area known as the Scarborough Shoal to the Chinese.
Scarborough Shoal lies right off the coast of Luzon -- quite literally in the Philippines' backyard (if yards were wet). So you can see why the Filipinos are nervous.
Safety in numbers
At just 3,250 tons displacement and armed with only one cannon apiece (plus a mix of mostly defensive "chain" guns and machine guns), the new Filipino frigates aren't particularly frightening warships. But they are currently the biggest warships in the Philippine fleet. Plus, there's safety in numbers, and the more of them they get, the safer Filipinos will feel.
The Philippine Navy now intends to buy two more such frigates... and then two more after that... and then two more after that. Jumping at Secretary of State John Kerry's offer last December to provide the Philippines with $40 million in military assistance, the Philippine Navy says it has bid to buy two more U.S. frigates for its fleet within the next two years, and intends to round out its purchases at about eight vessels (including the two already bought). These will then join the nation's three corvettes, a handful of even smaller warships, in trying to fend off the Chinese threat.
All this spending should be good news for American shipbuilder Huntington Ingalls (NYSE:HII). Huntington built the "frigates" in question, and would be the logical company to tap to refurbish additional vessels prior to their transfer to the Philippines. Huntington is also the company that is building the new Legend-class National Security Cutters that are replacing them at the U.S. Coast Guard.
Result: Selling more frigates to the Philippines won't just make the Filipinos feel more secure. It should make a lot of Huntington Ingalls shareholders pretty happy as well.