In this quick entry, let us delve deeper into the details.
OVERVIEW
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| The 2024 General Appropriations Act funds all projects of the government for the said year. This includes the AFP Modernization Program. |
Before the year ends, President Ferdinand Marcos Jr. signed the Php 5.768 Trillion national budget for the year 2024, encompassing all expenditures of national agencies and government-owned corporations, from salaries and bonuses of government employees down to the maintenance and operations of each government entity and large projects, of which it include ones under the Revised AFP Modernization Program or the R.A. 10349.
This is a noteworthy achievement, as mentioned by the Secretary of the Department of Budget and Management or DBM, as the government successfully having the law enacted, ensuring the continuity of government operations effective January 1, 2024, using the new Appropriated items intended to address the operational and project requirements of each government agency involved, of course it includes the ones under the Department of National Defense.
Speaking of the Department of National Defense, it has allotted initially at least Php 283 Billion for its annual budget before the eventual Php 6.17 Billion increase, excluding the re-aligned confidential funds that are intended for securing the country's sovereign right in the West Philippine Sea. The recipients of the re-aligned confidential funds are not from the defense department and instead, it went to civilian maritime enforcement agencies that are currently working their duties and responsibilities in the West Philippine Sea such as the Philippine Coast Guard (currently under the Department of Transportation), and the Bureau of Fisheries and Aquatic Resources (under the Department of Agriculture).
While the Php 283 Billion peso budget for the Department of National Defense seems big that it can address the funding requirements for the Revised AFP Modernization Program, take note that the budgeting process involves the utilization of funds in other expenditure items that are different in purpose than the ongoing modernization plans and programs like the ones programmed under the Horizon 3 phase, as this involves the overall operations that the entire department and its agencies have throughout the fiscal year.
In this brief discussion entry, let us discuss the breakdown and special provisions of the 2024 National Budget for the Department of National Defense or DND, with an aim of understanding the budgeting terms even further while giving a gist of how much is getting allotted for the acquisition of fighter jets and naval warships that the Armed Forces of the Philippines needed for its territorial or external defense posture as pushed by the national government as a policy.
THE BREAKDOWN
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| Here is the programmed budget for the National Defense for the year 2024. From the 2024 General Appropriations Act. |
In the table presented above, the Department of National Defense's total appropriations amounts to Php 238,356,544.000.00, of which it encompasses the Personnel Services or basic salary and benefit requirements of all serving military personnel and non-uniformed employees under the department amounting to Php 143,975,789,000.00.
The items under the Maintenance and Other Operating Expenses or MOOEs intended for base upkeep and maintaining existing military assets of the Philippine Armed Forces, comes with an allotment amounting to Php 70,413,754,000.00, and Capital Outlay or smaller acquisition projects that are different to the dedicated budget for AFP Modernization, of which the amount comes at Php 23,967,001,000.00.
At the initial observation, it is noticeable that there are no signs of where the AFP Modernization Program budget item is under the Department of National Defense, as the total amount may not make sense if compared to the reports presented by reputable media outlets that reported an initial budget allotted of Php 282.7 Billion. The said initial allotted budget increased by Php 6.17 Billion, enabling the budget to arrive to the Php 288 Billion defense budget as it is now known.
Now, as observed on the table once again, it lacked the difference of Php 50 Billion budget allotment to meet up the number, of which this is likely be the one that is programmed for the Revised AFP Modernization Program under R.A. 10349, of which it comes with special provisions that are primarily interesting as this may hasten any process of acquisition along the way.
To put it out, the core budget for the Department of National Defense, like any other government entity, comes with day-to-day operations in mind, as it is essential to keep government personnel and soldiers on the payroll, military aircraft and ships fully operational with its spare parts maintenance and fuel addressed, and key facilities within military bases fully functional, ensuring that the Philippine military is always ready to defend the country's national sovereignty and interest.
THE REVISED AFP MODERNIZATION PROGRAM BUDGET
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| The provisions for the Revised AFP Modernization Program include process exemptions from the Government Procurement Law (R.A. 9184). |
The budget allotted for the Revised AFP Modernization Program under the 2024 General Appropriations Act is at around Php 40,000,000,000.00. This is actually a significant budget increase for the AFP Modernization as compared to the Php 27,500,000,000.00 budget allotted for the year 2023. This means that this budget for acquiring new military hardware has increased by Php 12,500,000,000.00 or at least 45% budget increase from the 2023 budget allocation.
In spite with the said increase, it is still a far cry from the originally requested budget from the Department of National Defense, which amounts to Php 115.1 Billion for the Revised AFP Modernization Program, whereby such amount may help the department push its acquisition programs especially the ones that are in the priority list under the Horizon 3 phase of the said program. Projects under the priority list have primarily aimed at purchasing fighter aircraft and naval warships.
Another thing to take note is the special provisions that correspond to the acquisition process under the Revised AFP Modernization program, of which this was nonexistent during the 2023 General Appropriations Act. One highlight in this provision is the exemption of the acquisition of military hardware from the usual procurement processes presented under the 2003 Philippine Government Procurement Reform Law or better known as the Republic Act 9184.
Take note that in modernization projects that will go under public bidding following the procurement law, the underlying process with the endorsement of the bids and awards committee within the Defense Department will still follow, as highlighted by the 2016 revised implementing rules and regulations.
The exemption allowed the Department of National Defense to go directly into acquisition, which comes either as a Government-to-Government or G2G deal, or through negotiated procurement on a commercial deal with a private company which is actually what happened to the acquisition of three C-130J-30s for the Philippine Air Force from Lockheed Martin. Provided that it has the approval of the Defense Secretary up to the President on deals lower and higher than Php 500 Million, respectively.
Ultimately, another provision presented is in allowing the acquisition of used or second-hand military hardware, of which it highlights the in-brand new condition, as this means refurbished military hardware like used F-16s currently in-deal with the United States that can be upgradable to Block 70 Viper configurations.
The provision for purchasing used and in-brand new condition military hardware gets emphasized further that the conditions of the acquisition of used equipment shall come with at least greater than 50% of its remaining expected and average lifespan, making sure that the received hardware are still up to function for Philippine military operations.
ADDITIONAL TEN (10) BILLION FOR AFP MODERNIZATION UNDER UNPROGRAMMED APPROPRIATIONS
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| There is at least a PHP 10 Billion budget from Un-programmed Appropriations for the Revised AFP Modernization Program. |
To complete the entire budget for the Department of National Defense for the year 2024, an additional ten (10) Billion is in the line item for Un-programmed Appropriations, primarily to cover up projects under the Revised AFP Modernization Program, of which this will total the figures up to at least Php 50 Billion. Still, such an amount is still short from the requested budget from the Defense Department for AFP Modernization Program, amounting to Php 115.7 Billion.
By definition, an unprogrammed appropriation means that there is a standby budget to support the needs of a government agency in unforeseen situations, especially if there is an unexpected need for funding certain budget items that require additional financial support but only to the extent of what is available to each item. For the Revised AFP Modernization Program, it is amounting to only Php 10,000,000,000.00.
Currently, the amount of unprogrammed appropriations for the year 2024 under the General Appropriations Act of the same year comes at around Php 731,448,566,000.00, covering a wide range of government needs from different acquisition projects to support Government-Owned and Controlled Corporations or GOCCs in their day-to-day operations. Primarily, its goals come with social programs and government infrastructure in mind, such as providing government support for marginalized groups and key public transportation projects.
Hence, the overall budget intended for the Revised AFP Modernization Program has increased significantly, but not to the extent of what has requested by the Defense Department to provide much-needed funding to the acquisition projects getting lined-up, especially now that the Horizon 3 phase list is now getting in the process of finalization, and eventually getting its priority for external defense requirements.
This puts the total budget of the Department of National Defense to the figure presented by media outlets, with the breakdown separated into three parts - the operational function of the department and the Philippine Armed Forces for the entire year to support its personnel, basing maintenance, and military equipment maintenance purposes, budget dedicated for the Revised AFP Modernization Program, and a standby budget line item.
ENDING NOTE AND MESSAGE FOR THE YEAR 2024
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| Here is an F-16 Viper fighter aircraft taking off from an airbase on a sunrise background. Image Source. |
The Department of National Defense has saw significant increase in its overall budget throughout the years, with this year being the highest one yet, as the government is now gearing up its external defense posture, especially with the current uncertainties and growing tensions that takes place such as in the West Philippine Sea area, within the Philippine Exclusive Economic Zone.
Also, there is a huge increase taking place for the budget intended for implementing the Revised AFP Modernization Program as compared to the 2023 General Appropriations Act, although it is still far from what has requested by the defense department for its Horizon 3 requirements plus military acquisition projects that are pending from previous Horizons. This is to note that the mentioned phase comes with essential military equipment at hand that has the country’s airspace and both territorial and Exclusive Economic Zone (EEZ) waters in mind.
As the year 2023 draws to a close, it is worth mentioning that the Armed Forces of the Philippines receive a lot of military equipment recently to sustain its core mandate of protecting the country’s sovereignty from internal and external threats, of which it comes with a variety of military acquisitions delivered ranging from new armored vehicles of infantry fighting vehicles and light tanks to air surveillance radars that provide large eyes that covers significant parts of the country that watch against aerial threats.
While the budget increase in the 2024 General Appropriations Act for the Department of National Defense and other agencies comes with a bit welcoming and also an underwhelming feeling for the continuous resolve of getting the tools required for a much-needed ever-increasing capability of the Philippine Armed Forces, the year 2024 presents itself with new challenges and opportunities ahead, for the country and its citizens, and for individuals and communities to look forward into.
Ultimately, we are in the community of checking Philippine defense developments and security matters really hoping and aspiring that the trends of budget increases will continue, until the Armed Forces of the Philippines finally achieve and sustain the minimum credible defense posture it deserves to get, sufficient to continue its mandate, as it will be on other government agencies. As citizens of the Philippines, we are looking forward to a better, peaceful, stronger, healthier, prosperous, and promising 2024 for one and all.
To access the documents, here are the following links below.
(c) 2023 PDA.
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