Defense Secretary Gilberto Teodoro Jr. during the 20th ASEAN Defense Ministers Summit and 13th ADMM-Plus. Official handout.
Manuel Mogato | November 9, 2026
MANILA — Defense Secretary Gilberto Teodoro Jr. has asked the powerful Senate Finance Committee to add 20 billion pesos to the military’s 50 billion pesos allocation in the 2027 modernization budget.
Teodoro said the request for an additional 20 billion pesos in the modernization budget will allow the defense department enough elbow room to acquire platforms and systems next year. (Also read: US promises $100 million in military aid to the Philippines)
The House of Representatives kept the 50 billion pesos modernization budget requested by the budget department under the National Expenditure Program (NEP).
However, Teodoro told the House members that the 50 billion pesos modernization budget will only go to paying annual amortization for military equipment which had been acquired.
For instance, about 17.3 billion pesos will go to paying annual multi-year contracts (MYCs) for several projects under Horizon 2 and Horizon 3.
About 18.6 billion pesos have been obligated to pay additional MYCs due in 2027 for projects entered into in 2026, and 14.5 billion pesos for existing MYCs due this year under the unprogrammed appropriations under the 2026 budget law, but will be carried over in 2027.
Teodoro said the defense department can no longer sign new contracts for new platforms.
He said the Philippines cannot postpone acquisition of new platforms and weapon systems because it needs major retooling to catch up with the rest of our Southeast Asian neighbors. (Also read: US proposes new security architecture in ASEAN)
He told a congressional budget briefing the military equipment prices have been rising due to inflation and increased demand driven by the conflict in the Middle East and Eastern Europe. (Also read: Poland and the Baltic states’ dangerous strategic interests in the West Philippine Sea)
Even supplies, including munitions and spares in the secondary market are also difficult to access.
He said the United States, through its Foreign Military Financing (FMF) program, and Japan, through its Official Security Assistance (OSA) program, have been helping the Philippines upgrade its military equipment with additional funding of $500 million to $1 billion in the last two years, mostly in terms of equipment, supplies, and spares.
The defense department has proposed an ambitious 134 billion pesos military modernization program for 2027, broken down into 40 billion pesos in programmed funds and 94 billion pesos in unprogrammed funds.
But Congress approved an unprecedented 90 billion pesos military modernization budget in 2026 — 40 billion pesos in programmed and 50 billion pesos in unprogrammed funds.
However, for 2027, the Department of Budget and Management (DBM) cut the modernization budget to 50 billion pesos and removed the unprogrammed funds.
The Lower House eventually approved the 50 billion pesos in the programmed funds, a 25 percent increase from the 2026 allocation.
The DBM cut more than 62 percent of the 2027 budget proposal.