The Philippines, currently embroiled in a sovereignty dispute with China over the South China Sea, is reportedly considering increasing its defense budget to exceed 1% of its Gross Domestic Product (GDP).
According to Bloomberg, Philippine Defense Secretary Gilbert Teodoro told reporters at an event on Thursday that he plans to increase defense spending, excluding the budget for military pensions. This year, the Philippines’ defense budget is 278.1 billion Philippine pesos (approximately $4.8 billion).
Teodoro also urged the private sector to support government finance by purchasing government bonds to help assert the Philippines’ sovereignty in the South China Sea. He mentioned that there are “various creative ways” for financial procurement, and potential bond buyers would benefit from improving the Philippines’ national credit rating and defense industry. He emphasized that “the important thing is to ease the fiscal position of the government and not sacrifice modernization.”
As tensions with China intensify, the Philippines is accelerating its military buildup to defend its sovereignty in the South China Sea. In February, Philippine President Ferdinand Marcos Jr approved a military modernization project that includes the purchase of the Philippine military’s first submarine, a project worth 2 trillion Philippine pesos (approximately $34 billion). Marcos also recently approved the introduction of multi-purpose fighters such as Lockheed Martin’s F-16 or Sweden’s Saab JAS 39 Gripen.
On Monday, the Philippines signed a Reciprocal Access Agreement (RAA) with Japan, which facilitates the mutual deployment of their respective military forces. Under this agreement, the Japanese Self-Defense Forces will be able to join in joint training exercises and disaster relief efforts in the Philippines, a move that escalates efforts to contain China in the South China Sea.
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