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Modernizing or Equalizing? Defense Budget and Military Modernization in the

Philippines

Article · December 2020

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Sheena Valenzuela, Deryk Baladjay and Julio Amador Dec 30, 2020 5 min read

Modernizing or Equalizing? Defense Budget and Military

Modernization in the Philippines, 2010 – 2020

Photo Source: Wikimedia

The Philippines faces external security issues in the South China Sea and the tri-border area
in its southern front. The modernization drive of the Armed Forces of the Philippines (AFP)
therefore becomes more crucial so that it can respond to the existing and future challenges.
The Revised AFP Modernization Program (Republic Act No. 10349), which began in the
second Aquino administration, is now on its ‘second horizon’ under the Duterte
administration. Examining the status of the first horizon (2013-2017) and the current second
horizon (2018-2022) expenditures of the government would provide valuable insights into the
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last until 2028 and hopefully, for any future modernization thrusts should the government
pursue it.

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Observations on the AFP budget: Persistence of internal priorities

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The sustainable modernization of the Philippines’ military is dependent on its prioritization in
the budget. However, budgeting, expenditure, and acquisitions (through the modernization
program) from 2010 to 2020 show otherwise. A closer examination of the budget allocation
for the AFP indicates sweeping trends. According to Figure 1, the Government has
maintained its investment in the Philippine Army (PA).

Figure 1. AFP’s defense budget allotment from 2011–2020, excluding R.A. 10349 funds.

The 2020 defense budget follows this trend of prioritizing the PA. In fact, the PA’s defense
budget share accounts for the lion’s share across the three AFP branches and outpaces the
combined budget shares of the Philippine Air Force (PAF) and the Philippine Navy (PN) for
most of the decade. Increased expenditure in the PAF and PN has likewise been noted in FY
2016-2017 when the South China Sea dispute was at its climax.

Historical antecedents also played a significant part as to why PA garners a lion’s share of the
defense budget. Historically, the army has generally been the recipient of much of the
defense budget. Prior to the first modernization program, circa post-World War II, the AFP’s
mindset has largely been geared towards countering internal threats to national security
while leaving external security measures to its treaty ally, the United States. The immediate
force in need of bolstering to respond to internal security threats was the Philippine Army.
This mindset has been translated into the 21st century, as the AFP continues to grapple with
a dwindling internal threat.

Horizon-specific observations

Given the budget data for the AFP, the study examines Horizon-specific data by closely
examining the relationship between publicly available data on defense budget and
extrapolated data on the AFP’s Revised Modernization funds. Below is a tabulation of the
R.A. 10349 funds, as summarized by Table 2.

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According to uniformed personnel interviewees, the increase in second horizon item list cost
accounts for the reemphasis of spending on military assets for the PAF and PN. The second
horizon acquisitions are geared towards the strengthening of both the PAF and the PN and
that the modernization of the two service branches was meant to assist both to “catch up”
with the PA.

The defense budget for 2012 and the modernization-excluded 2018 defense budgets of PA,
PN, PAF and GHQ/GA indicates compensatory levels for their modernization shares for first
horizon and second horizon respectively. In the case of GHQ, defense shares could be lower
as the defense budget data is an aggregation of four sub-agencies. This suggests that R.A.
10349 funds is indeed utilized as a way for PAF, PN, and GHQ to “catch-up” with the PA.
Instead of being utilized as a ‘modernizer,’ modernization funds have been, instead,
modestly used to ‘equalize’ all AFP branches.

Persistence of External Challenges: Maritime Domain Concerns

Maritime domain concerns are one among the many cruxes of the Philippines’ bilateral
relations with its regional neighbors. While maritime concerns allude to geographical and
cartographical disputes of the yesteryears, much of the persisting ones have immediate
implications to the Philippines’ national security.

Prominent among geopolitical concerns is the threat of China’s growing assertiveness in the
region. China’s expansive claims have coincided with many of Southeast Asian states’
maritime claims like Vietnam, Malaysia, and Indonesia. To back its assertive claims, China has
also evolved the way it conducts its naval patrolling and policing capabilities – evolving from
its acclaimed peaceful rise to one that is outrightly provocative.

The reality of an economic setback by China’s maritime assertiveness also hits home in the
Philippines. The economic value of the strategic resources found in the disputed territories
should be sufficient reason to protect these. While the legitimacy of China’s stake in the
disputed regions appeals to broader theorists, the reality on the ground, however, is
different. Sea lines of communication in the South China Sea have been hindered by China’s
concerted militarized efforts.

As maritime claims intensify among claimant-states, so does a state’s need to modernize its
military capabilities; and because responding to regional geopolitics with interim solutions is
not the way forward as argued by analysts, it is imperative that the Philippines must have the
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necessary tools and capabilities to back its claims. A state’s foreign policy is only as effective
as its existing capabilities and future procurement plans.

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Are we adequately funding national defense?

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There is inherent disjoint between emerging threats to national security and the defense
budget prioritizations. Although R.A. 10349 has accommodated points of improvement from
its predecessor law (R.A. 7898), there is room for improvement. Nominal values found in the
National Expenditure Program from 2010 to 2020 and funds reserved for the Revised AFP
Modernization Program all point to a continuous emphasis on internal defensive and
offensive capabilities. Noteworthy also are the PAF’s and the PN’s significant strides in
purchasing external defense capabilities in response to growing concerns over the country’s
breached sovereignty. However, it will be years before these capabilities come into
Philippine possession as the acquisition process remains slow and tedious.

Any efforts to pursue the modernization of AFP, in the truest sense of the word, must begin
at the phase of prioritizations and, subsequently, must translate into appropriations. These
prioritizations must also be externally oriented. In an ever-evolving and uncertain
international stage, the Philippines cannot afford a lackluster armed force that is dutifully
inward-looking but is barely outward-looking.

This article summarizes a major study on Philippine Defense Budget and Modernization,
which can be read here. The financial support of the Konrad Adenauer Stiftung is kindly
acknowledged.

Sheena Valenzuela is Research Associate and Program Coordinator

for National Security Research at the Ateneo School of Government.
She is currently taking her Master in Public Management degree in
the same institution. She obtained her degree in Bachelor of Arts in
Political Science from the University of Santo Tomas, Philippines, in
2014.

Deryk Matthew N. Baladjay is Senior Associate and Research

Coordinator of Amador Research Services. He is a graduate of De
La Salle University-Manila where he holds a Master’s degree in
International Studies specializing in Asian Studies. He likewise
received his bachelor’s degree in Political Science from the same
institution in 2016. He is also a Young Leader from the Pacific Forum.

Julio S. Amador III is CEO and Founder of the Amador Research

Services.

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