To unlock costumes, you must complete Level 3 of a weapon challenge, which can be done by talking to Fiona at your PMC. Each time you complete a Level 3 weapon challenge, you receive one of three costumes.
"Unlock the P.L.A.V. faction and get a gunship with rockets, such as a Castro V Attack chopper or an Anaconda from the pirates (recommended, as it carries about 80 rockets). Fly to the city of Merida and shoot the billboards. You will earn $5,000. If you shoot enough of them you begin to unlock more shop items from the P.L.A.V. and a few things from the U.P. mercenaries in their city. Only one rocket is required to destroy a billboard. It only takes 1 rocket from a gunship to destroy those pesky billboards."
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