AFP Modernization: P40 billion of P75 billion in standby funds
MANILA, Philippines — The Armed Forces can only readily tap P35 billion or less than half of its P75 billion modernization budget for 2025, as the bulk of the funds were placed in standby appropriations that require excess government revenue before release.
Only P35 billion of the military's P75 billion modernization budget for 2025 is guaranteed as actual funding, based on the 2025 General Appropriations Act.
Meanwhile, P40 billion was lodged under unprogrammed appropriations, which are standby appropriations outside the approved government fiscal program that do not have definite funding sources, according to the 2025 budget.
This departs from previous years when the guaranteed budget for the AFP modernization program had always exceeded its standby funds.
The executive branch initially proposed P50 billion for the AFP's modernization program this year, which would have been the Marcos administration's largest budget for military upgrades if approved. However, Congress had realigned P15 billion of this to unprogrammed appropriations, based on the proposed and final 2025 budget documents.
The military's revised three-phased modernization program started in 2013 under President Benigno Aquino Jr. as a response to China's growing aggression in the South China Sea.
The program is currently in its biggest and final phase. In January 2024, President Ferdinand Marcos Jr. approved an updated acquisition plan called Re-Horizon 3, which will run for 10 years with an estimated cost of P2 trillion. This final stage focuses on acquiring modern weapons and shoring up the Philippines' defenses, including its denial and deterrence capabilities.
Philstar.com's review of military modernization budgets from 2018 — when the program entered its second phase — to 2025 shows a shift in how the program is funded under Marcos.
While the total budget for military upgrades grew from P45 billion in 2023, Marcos' first budget as president, to P75 billion in 2025, most of these increases were placed in standby funds.
Under the previous Duterte administration, which prepared the budgets from 2018 to 2022, guaranteed funds stayed between P25 billion to P29 billion while unprogrammed portions did not exceed P11 billion.
Legislative budget deliberations in 2024 had surfaced concerns about relying on unprogrammed funds for military upgrades.
In September 2024, Defense Secretary Gilbert Teodoro told senators that none of the P10 billion in unprogrammed funds for 2024 had been released, as the Department of Budget and Management still needed to identify excess revenues. Sen. JV Ejercito and Sen. Ronald dela Rosa expressed dismay over the realignment, with the former pointing out that priority programs should always be lodged under actual line items.
What the budget shows. The military modernization program's total funding has grown by 150% over the last eight years — from P30 billion in 2018 to P75 billion in 2025. The share of unprogrammed funds also saw its biggest increase during this period, growing eightfold from P5 billion in 2018 to P40 billion in 2025.
The pattern of increasing reliance on standby funds became more pronounced in 2023, when unprogrammed portions reached P17.5 billion — about 64% of that year's P27.5 billion in guaranteed funds. By 2025, for every peso in guaranteed funds, there will now be P1.14 in standby appropriations that need extra revenue before release.
— with reports by Jean Mangaluz
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