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8 SMT Magazine • September 2016 by Stephen Las Marias I-CONNECT007 Failure is Not an Option The global aerospace and defense sector is expected to return to positive growth this year after several years of downturn, according to a study by Deloitte. The research pointed out the stable growth in GDP worldwide, lower com- modity prices—in particular crude oil—and strong passenger travel demand as main drivers for the commercial aerospace subsector. When it comes to the global defense sector, the resurgence of security threats and growth in defense budgets in many countries will likely promote the industry over the next few years. Deloitte's report noted increasing internation- al demand for defense and military products as uncertainties brought on by regional tensions in the Middle East, Eastern Europe, North Ko- rea, and the East and South China Seas may lead to increases in defense budgets and purchases of next generation military equipment. Overall, Deloitte forecasts the global aero- space and defense sector revenues to grow by 3% this year. Sitting in the Philippines, I can say that the trends mentioned in the study are true. Allow me to oversimplify some of these trends I am seeing. For one, the Philippines is currently having a territorial dispute with China regard- ing the West Philippine Sea (in the South Chi- na Sea). Despite a unanimous ruling recently by the Arbitral Tribunal at the Permanent Court of Arbitration in The Hague in favor of the Phil- ippines in its case against China's claims to all of South China Sea, the situation remains tense as China refuses to recognize and accept the re- sults of the arbitration. Because of this, the Phil- ippines has been upgrading its naval capabilities to shore up its defense of the contested islands and waters. I believe the country will contin- ue to do so, and expand the upgrades to other sectors of its armed forces—including army, air force, and coast guards. Next, the Philippines has been, and for the longest time that I can re- member, engaged in a battle with terrorists in the southern part of the country. And I cannot E DITOR'S NOTE

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