Philippines Defense Secretary Teodoro Urges Congress to Repeal Military Modernization Law Over Funding Defects
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Defense Secretary Gilberto Teodoro Jr, wanted Congress to repeal the military modernization law, saying it has outlived its purpose, There were also structural defects the limit the defense department from contracting lone-term, multi-year loans to upgrade military capabilities.
Enacted in December 2012, the revised AFP Modernization Act has until end of 2017 before Congress passes another legislation extending the law authorizing the defense department to enter into deals to modernize the military’s equipment and weapons systems.
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Under the current leadership. the thrust of the military moderrnization program was to develop a credible deterrent capability by enhancing its maritime doman awareness, command and control, and cybersecurity. The original law was passed, Republic Act 7838, was enacted under President Fidel Ramos in February 1995, to build a minimum credible defense capability after the security umbrella provided by the US was gone when it abandoned its two large overseas military bases in Subic and Clark.
The Philippines was stripped naked. It has a puny air and maritime defenses. It’s obsolete radars have limited range. It has a handful of three decades-old F-5 fighters, Vietnam War vintage UH-1H utility helicopters and operate World War II-vintage warships. Both RA 7838 and RA 10349 have a 15-year, three phased program. The revised modernization law was funded by 300 billion pesos. Since 2016, Congres has appropriated more than 278 billion pesos and another 83 billion pesos in unprogrammed funds for RA 10349.
However, the 200 billion pesos budget under RA 10349 is no enough to cover the cosfs of brand-new platforms. For instance, acquiring 40 mult-role fighters required 400 billion pesos, which is more than the entire defense budget of less than 300 billion pesos, The passage of RA 7838 was supposed to augment proceeds from the conversion of military camps, including forner US bases and other facilities under another law, the RA 7227, or the Bases Conversion and Development Act, in March 1992. The law was an offshoot of the Senate’s decision to terminate the Military Bases Agreement in September 1091.
The last US sailor left Subic in November 1992. The US Air Force abandoned Clark much earlier after it was devastated by Mount Pinatubo’s eruption in 1991. Little was accomplished under the first modernization law, which was supposed to be funded by 150 billion pesos. Onl 50 billion pesos was authorized by Congress and it went to acquiring equipment used for counter-insurgency. The BCDA also contributed little because te funds remitted to the government was used to replicating camps, like Fort Bonifacio and Villamor Air Base.
Only 32 percent of proceeds from BCDA were supposed the military’s modernization program and half were earmarked for the development of Clark and Subic. The real military upgrade began under President Benigno Aquino III when 12 FA-50 light fighters, two Landing Dock Platforms, and two frigates were acquired. Under Rodrigo Duterte, six Offshore Vessels, nine Fast Attack Interdiction Crafts (FAIC), Brahmos missiles,radars, air defese missiles and Black Hawk helicopters were acquired. Under Ferdinand Marcos, only 12 additional FA-50s were contracted.
There were still negotiations to acquire two more frigates, a trainer jet, and a multi-role fighter, and a conventional submarine. The defense and military establishments had a 1.1 trillion pesos wishlist, including air refueling tankers, AWACs, electronic jamming aircraft,attack helicopters, heavy lift helicopters, drones, corvettes, air and coastal defense missiles Due to inflation, Teodoro said the costs of some equipment had gone up. Some of the equipment under horizon 1 unde Aquino’s term were already obsolete.
That is one reason why Teodoro wanted to scrap the modernization law and replaced it with a project management bases in acquiring a new platform. Moreover, the defense department is tied with short-term five-year repayment period for the equipment under the law. In arguing for the scrapping of RA 10349, Teodoro wanted long-term repayment scheme of up to 20 years to help the government absorb the loans. At the same time, Teodoro wanted the BCDA law scrap because in its more than 30 years of existence, the military only received 45 billion pesos in remittances. For 2026, Teodoro said the defense department has only 3 billion pesos left because more than 92 percent of the 40 billion pesos allocated for the military modernization fund had been obligated to defense manufacturers who were awarded contracts.
Many of these contracts were awarded during the time of former President Rodrigo Duterte. These were among the reasons why Teodoro wanted to scrap both RA 10349 and RA 7227 because the laws do not serve its purpose. With the help of Congress and other government agencies, like the finance department, the central bank, and the Banking Association of the Philippines (BAP), the defense department can implement reforms in the military modernization program. However, Congress can help by restoring the 50 billion pesos fund under military modernization trust fund. the last time the defense and military establishments enjoyed 50 billion peso modernization budget was in 2024. Perhaps, the budget cuts in the public works and highway should be realigned to the defense department to help address the serious threats in West Philippine Sea.
The opinions expressed are those of the author and do not necessarily represent the views of this publication.
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