Several major defense modernization projects of the Armed Forces of the Philippines (AFP), including the Philippine Air Force’s Multirole Fighter (MRF) Program and the Philippine Navy’s Submarine Acquisition Program, continue to face financing challenges.
The Department of National Defense (DND) is seeking amendments to Presidential Decree No. 415, issued in 1974, which places limitations on government financing arrangements for defense acquisitions.
Amending the decree could provide the government with greater flexibility to access low-interest, long-term financing and concessional loans for multibillion-dollar military projects that cannot be fully funded through annual appropriations.
Despite these challenges, at least three major defense projects are anticipated to be signed before the end of the year, although some large-scale acquisitions may remain on hold pending financing reforms.
The development highlights the importance of establishing sustainable financing mechanisms to support the country’s defense modernization efforts and strengthen the AFP’s external defense capabilities.
