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By: Manuel Mogato | Published: January 4, 2025
Reading Time: 4 minutes
Manila – Lawmakers from both chambers of Congress have agreed to slash 5 billion pesos from the 256.1 billion pesos defense budget for 2025, putting into question the president’s promise to prioritize the military’s modernization program.
“It sends a wrong signal to our allies,” a senior defense official, who does not want to be named, said. “How can we be counted on as a reliable partner when we are now spending enough to develop a minimum credible defense capability and boost our deterrence? We could be the weakest link in the region.”
He said most countries in the region have been increasing their defense budget, including Japan, and Singapore in the face of rising security threats in the region.
China was expected to launch more coercive activities in disputed waters in the East and South China Seas in 2025 to assert its claims.
President Ferdinand Marcos Jr. signed the 6.326 trillion pesos general appropriations law on December 30, 22 percent higher than last year’s budget of 5.7 trillion pesos.
The defense department had the fifth largest allocation behind education, public works, health, and the interior department which supervises the national police, jail, and fire services.
A finance official said the military’s modernization fund was slashed to 35 billion pesos from 40 billion pesos and the funds were transferred to the public works department.
A defense official said the modernization fund was only enough to pay the annual amortization of 11 military projects entered into the past administrations under Benigno Aquino III and Rodrigo Duterte.
“We could no longer allocate funds for new projects under President Marcos because the funds approved by Congress were only enough to pay the amortization of fighters, corvettes, frigates, and offshore patrol vessels,” he said.
The finance official said the president reallocated 6.5 billion pesos to defense-related construction activities for 2025.
“On paper, the defense budget was restored but in reality, the extra 6.5 billion stays with the public works and highways department,” he said.
The defense and military establishments have been asking lawmakers to increase defense spending to 2 percent of GDP, or more than 300 billion pesos to catch up with peers in Southeast Asia.
Roughly 60 percent of the defense budget goes to paying salaries, allowances, and pensions. Only 30 percent was allocated to maintenance and operating expenses and the remaining 10 percent to capital outlay.
The president vetoed nearly 200 billion pesos in the proposed 2025 to correct constitutionally flawed provisions, which placed the education sector behind the public works and highways budget of 1.1 trillion pesos.
Under the Constitution, the education sector must have the biggest allocation in the annual budget.