The Philippines and Its Defense Modernization Program: Confronting Persistent Challenges and Opening New Opportunities

Philippine Navy
Credit: Philippine Navy Facebook page

In July 2020, the Department of National Defense announced the inevitable. Due to the adverse impact of the COVID 19 pandemic, it was forced to return funds allocated for the Armed Forces of the Philippines modernization program amounting to PhP 8 billion ($160 million) to the national treasury. Astonishingly, due to its inability to finalize its acquisition projects, the department also remitted PhP 9 billion ($180 million) of unspent 2019 funds back to the national government. To make matters worse, Defense Secretary Delfin Lorenzana also announced acquisition delays for 2020 and 2021 with major ticket items most likely to be moved to the last phase of the program.

Launched in 2012, the armed forces modernization program is divided into three phases namely, 1st phase (2012-2017), 2nd phase (2018-2022) and its 3rd phase (2023-2028). However, the program has been plagued with limited resources, changing priorities and delays in acquisition. And with COVID-19 affecting the government’s fiscal disposition, these seem to be an ominous sign of things to come. At present the threat environment has remained the same. The country continues to grapple with both internal threats from local communist insurgents and Islamic extremists. The aggressive claims of China in the South China Sea and its vulnerability to climate induced events has placed a huge challenge to the capabilities of its armed forces.

Given this complex threat environment, I believe that the delays in its defense modernization program will further exacerbate gaps in its ability to respond to both traditional and non-traditional threats. Furthermore, these insufficiencies will place an enormous strain on the existing capabilities of its defense forces. With limited funding and changing political priorities, the country will be forced to adopt incremental improvements which in the long run, produce insignificant results. Also, it will continue to rely on a 70-year-old mutual defense treaty that has provided a false sense of security.

Therefore, I argue that there is an urgent need to reexamine the current philosophies and strategies of its defense modernization program. Drawing from the lessons of ASEAN militaries, new approaches to funding its defense program such as soft loans, counter trade agreements, and in-country development schemes should be explored to further transform these defense acquisitions into viable economic investments.

COVID-19 and ASEAN military programs

ASEAN countries are also facing challenges to keep their defense budgets intact. In fact, countries like Singapore, Malaysia, Indonesia and Thailand, all announced cutbacks in their defense budgets. However, these countries also underscored the importance of maintaining its security posture given the complex threat environment in Southeast Asia. For instance, despite its size, Singapore has remained consistent with its forward defense doctrine by engaging both allies and potential adversaries. In terms of its deterrence policy, it remains committed to acquire the F-35B new generation fighters to augment its F-15 and F-16 fighter jets in frontline service. Likewise, its navy is also pursuing its littoral program with plans to acquire new ships and submarines by 2023. The country also has a robust defense industry that supports its security strategy.

Similarly, Indonesia also announced significant reductions in its defense budget due to COVID-19. Nevertheless, due to the strong commitment of its political leaders, defense planners are expected to continue their acquisitions through soft loans from the United States and the procurement of 2nd hand EF-2000 Eurofighters from Austria. The country is also known for integrating its defense acquisitions to its local defense industries. Apparently, Indonesia’s Eurofighter plan comes with a condition that the manufacturing of new airframes will be transferred from Spain to Indonesia. 

The Philippines and its armed forces modernization program: Challenges and New Opportunities

Because of the prolonged lockdown imposed by the government due to the pandemic, the Philippines is now reeling from widespread economic dislocation. The government is struggling to put in place a stimulus package to restart the economy. Also, due to austerity measures and budget realignments, essential acquisition for territorial defense will be moved to the last phase of its modernization program (2023-2028) while its 2020 acquisition of C4I and medium lift aircrafts will be moved to 2021. Expected to be on this year’s chopping board are the Multi-Role Fighter, Navy Corvette, and Off-shore patrol vessel programs. While the procurement of shore-based missile system remains uncertain at this point. These are considered the big-ticket items not only due to its cost, but because of its importance in attaining the country’s minimum credible defense posture. In addition, the defense department also suffers from absorption problems as shown in its inability to fully use the allocated funds for force modernization.

However, I believe that new approaches can be adopted to address these problems. Aside from the current multi-year allocation for its defense acquisition projects, the Philippines can also opt for soft loans similar to the Indonesian initiative. The country can use its strong relationships with the United States, Japan, Israel, and Australia among others for this purpose. Another option for the country is to adopt interim programs. For instance, lease agreements or the acquisition of 2nd hand fighter aircrafts can fill vital air defense and interdiction capability gaps. In addition, expediting the purchase of additional FA-50PH light fighters can also be a viable stop gap alternative. Similarly, the transfer of Pohang class corvettes from South Korea is essential to restore the Navy’s capability to patrol its exclusive economic zone. With the retirement of its WWII patrol ships, the Navy’s ability to conduct maritime security operations is severely limited.

Furthermore, the current program’s focus on equipment acquisition is not sustainable in the long term due to limited resources, possible mismanagement, and changing political priorities. The Philippines can adopt a more strategic approach by integrating its defense acquisitions to its local industries. This will enable technology transfer and innovation while strengthening its diplomatic and trade relationships with defense partners. This approach will also allow the country to be more proactive in its security posturing and ensure the upkeep of its new defense assets. Moreover, this strategy combined with schemes like counter trade and in country development agreements are potential drivers for industrial growth and innovation.

Overall, I believe that the Philippines is at a crossroads when it comes to its defense modernization program. There is a need for a paradigm shift to minimize the effects of narrow political interests and address persistent problems. It can either continue to maintain its current budget allocation-based acquisitions or adopt a new approach that is more conscious of its strategic needs which can lead to new diplomatic and economic opportunities for the country.

The views and opinions expressed in this article are those of the author.