China and Russia Gunning For Piece Of Duterte's Record Breaking PHP 137 Billion Military Budget 1

Goodbye US, Hello Neighbors

When it comes to its military ties, Philippines (EPHE) (PIE) is making all attempts to diversify away from its traditional ally, the United States. In October last year, President Rodrigo Duterte said that he intended to cut Philippines’ military ties with the US (SPY) (IWM) and strengthen economic ties with China (FXI) and Russia (RSX). Duterte’s claim “there’s three of us against the world,” made back then meant that the economy desires to have stronger integration with its neighbors while undermining the security alliance it had with the U.S.


Philippines’ military modernization plan

Since Rodrigo Duterte became president, Philippines has been on a mission to modernize its military and diversify its international sources of weaponry. As President, Duterte has urged the Armed Forces of the Philippines (AFP) to look beyond the U.S. to China and Russia, for its military upgrade initiative.

Defense Secretary Delfin Lorenzana desires defense spending in the Philippines to be increased to 2.5% of GDP (from about 1.5% currently). As a reference point for defense spending internationally, NATO’s official guidelines say member states should spend at least 2% of their GDP on defense. However, of the 28 countries in the alliance, only five — the U.S., Greece, Poland, Estonia and the U.K. — meet the target. Germany spent 1.19% of its GDP on defense in 2015, while Canada spent only 0.99%.

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When the new 3.35 trillion peso ($70 billion) budget for 2017 was signed into law on 22 December 2016, Duterte announced a 17% increase in the defense budget to 137.2 billion pesos $6.6 billion) in 2016, up from 117.5 billion pesos in 2016.

Longer term, the Philippines government already has plans to spend about $1.7 billion on a 5-year military upgrade program beginning 2018. On January 26, Lorenzana said that the AFP was looking at unmanned aerial vehicles, remote-controlled bomb disposal equipment, sniper rifles and round-corner rifles that could be used to fight drug traffickers and terrorists.

The Philippines has plans of securing fast boats, drones, night goggles and close quarter weapons from China and attack helicopters and the Russian-built diesel-electric submarines from Russia.

Philippines and China

The Philippines is one of the six claimants to South China Sea’s oil and mineral reserves, and thereby stands in opposition to China. Now, the Philippines has for long maintained an aggressive approach towards China. However, since Duterte took office, the economy is softening up to this neighbor with an ulterior motive; that is, to secure weapons and military aid from China.

In December 2016, Chinese Ambassador Zhao Jianhua offered a free $14 million arms package to the Philippines. China also offered the Philippines a soft loan worth $500 million for other military and security equipment.

Philippines and Russia

During a port visit in Manila in January this year, Russian Ambassador Igor Anatolyevich Khovaev said that “Russia is ready to become a new reliable partner and close friend of the Philippines. We are ready to supply small arms and light weapons, some airplanes, helicopters, submarines and many, many other weapons. Sophisticated weapons, not the second-hand ones.”

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