US to boost security aid for AFP modernization
MANILA, Philippines — The United States will raise its funding support for the Philippines' military modernization program, which Defense Secretary Gilberto Teodoro Jr. has said is "stuck" with a P50-billion allocation because of the existing modernization law.
US Defense Secretary Pete Hegseth announced the increase at a meeting with Teodoro on Wednesday, October 28, according to a readout from the US Department of War, as the Trump administration now calls the Pentagon.
The talks were held on the sidelines of the ASEAN Defense Ministers' Meeting in Cebu.
The additional security cooperation funds are meant to accelerate the modernization of the Armed Forces of the Philippines (AFP) and enhance interoperability "along the First Island Chain," the readout said.
The First Island Chain refers to the arc of islands from Japan through Taiwan and the Philippines that US military planners see as central to deterring China.
It did not say how large the increase would be or when the money would be released.
The two officials also agreed to launch an "alliance command and control modernization sprint" to improve real-time coordination between their forces.
Both sides welcomed progress at sites covered by the Enhanced Defense Cooperation Agreement, including investments in infrastructure and storage facilities across the country.
The Pentagon funds are separate from the Foreign Military Financing (FMF) grants the US Congress has approved for Manila. The 2026 US National Defense Authorization Act, which President Donald Trump signed in December 2025, allows up to $500 million a year in FMF for the Philippines from 2026 to 2030 — on its own more than half of the P50 billion Manila has proposed for modernization next year — plus up to $1 billion in direct loans.
For fiscal year 2026, Congress appropriated at least $100 million in FMF grants for the Philippines, according to the Congressional Research Service.
At home, officials say the AFP's modernization fund has fallen well short of what the country needs as it looks to shore up its territorial defense capabilities and defense posture at sea.
The proposed 2027 national budget sets aside P50 billion for the Revised AFP Modernization Program, up from P40 billion in regular funds this year but less than 40% of the P126.97 billion the Department of National Defense (DND) told the House of Representatives in August that it requires.
The DND's overall budget for 2027 was set at P324.63 billion, about 43% less than the P572.79 billion it requested. Its capital outlay was cut to P32.67 billion from the P239.73 billion it sought.
Before a Senate finance subcommittee on October 19, Teodoro said Horizon 3, the modernization program's third and final phase, needs at least P70 billion.
If all planned projects were contracted, he said, the DND would need P20 billion on top of the P50 billion just to pay for multi-year contracts.
Republic Act 10349, or the Revised AFP Modernization Act, was enacted in 2012 as a 15-year program split into three phases and is set to conclude in 2027.
Teodoro has repeatedly urged Congress to repeal the law and argued its set cycles cannot keep pace with military technology. He also says its intended funding source — remittances from the Bases Conversion and Development Authority — has been marginal and has had to be subsidized by the national government.
"Which entity works on 15-year horizons in this day and age?" he said in an August statement.
Senate President Sherwin Gatchalian said on Thursday he is pushing for a bigger AFP budget to sustain the military's modernization, readiness and capability-building.
"Our geopolitical situation in the region and around the world is changing very quickly. We can see the other conflicts in the Middle East and Eastern Europe," Gatchalian said in Filipino at the Senate hearing on the DND budget, according to a statement from his office.
"At this point, it is important that we are prepared and continue to modernize and strengthen our armed forces, including their capacity for cyber warfare," he added.
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