The Armed Forces can only immediately use P35 billion, or less than half of its P75 billion budget for modernization by 2025, as a large portion of the funds are placed in standby appropriations that require excess government revenue before release.
Only P35 billion of the P75 billion budget for military modernization in 2025 is guaranteed as actual funding, based on the 2025 General Appropriations Act.
Meanwhile, P40 billion was placed under unprogrammed appropriations, which are standby appropriations outside of the government's approved fiscal program and have no specific source of funding, according to the 2025 budget.
This is different compared to previous years where the guaranteed budget for the modernization of the AFP was always higher than the standby funds.
The executive branch initially proposed P50 billion for this year's AFP modernization program, which would have been the Marcos administration's largest budget for military upgrades if approved. However, Congress transferred its P15 billion to unprogrammed appropriations, based on the proposed and final 2025 budget documents.
Started in 2013 under President Benigno Aquino Jr. the three-phased military modernization program in response to China's growing aggression in the South China Sea.
Currently, the program is in its largest 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 and is estimated to cost P2 trillion. This final phase focuses on acquiring modern weapons and strengthening the Philippines' defense, including defense and deterrence capabilities.
Although 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 budgets from 2018 to 2022, guaranteed funds remained between P25 billion and P29 billion, while unprogrammed portions did not exceed P11 billion.
During the 2024 budget deliberations, concerns arose over reliance on unprogrammed funds for military upgrades.
In September 2024, Defense Secretary Gilbert Teodoro told senators that not a single peso from the P10 billion unprogrammed funds for 2024 has been released, as the Department of Budget and Management has yet to determine the excess revenue. Sen. expressed JV Ejercito and Sen. Ronald dela Rosa their frustration with the realignment, where the former said that priority programs should always be placed on the actual line items.
What does the budget show?
Total funding for the military modernization program has grown 150% in the past eight years — from P30 billion in 2018 to P75 billion in 2025.
The share of unprogrammed funds also experienced the largest 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 the unprogrammed portions reached P17.5 billion — about 64% of the P27.5 billion guaranteed fund that year.
In 2025, for every peso of guaranteed funds, there will now be P1.14 in standby appropriations that require additional revenue before release.
