30/08/2026
HIGHLIGHTS OF THE INTERPELLATION OF SECRETARY GILBERTO C. TEODORO BY REP. ARNAN C. PANALIGAN AT THE BUDGET BRIEFING OF THE COMMITTEE ON APPROPRIATIONS
1. The Ph 50 Billion allocated for the AFP Modernization program in the proposed 2027 national budget will be used for defense acquisition contracts under a Multi-year Contractual Authority (MYCA).
2. The Ph 50 Billion unprogrammed appropriations in the 2026 national budget for AFP Modernization program has not yet been released. During the budget briefing of the Committee on Appropriations last August 17, 2026, Rep. Arnan C. Panaligan asked Department of Budget and Management Secretary Kim Robert de Leon if DBM will release the said amount and he replied that it will be released if there is a need for it and DND/AFP will ask for it provided that there are excess revenues. He said the regular appropriation of Ph40 Billion for 2026 must first be used.
3. Rep. Arnan C. Panaligan requested the DND to furnish the committee with an update on the utilization of the Ph 40 Billion and the items charged to it as well as the items to be charged to the proposed Ph 50 Billion in 2027.
4. Rep. Panaligan asked Sec. Teodoro if he is still pushing for the amendment of Presidential Decree No. 415, a 1974 law that set a limit of US$ 300 Million for loans intended for the purchase of defense equipment. The secretary said that his proposal stands. Rep. Panaligan informed the secretary that in response to his suggestion made at last year's budget hearing, he filed House Bill No. 8059 amending PD 415. Sec. Teodoro's preference is to remove the cap or ceiling on loans for the acquisition of defense equipment. This is necessary in view of the fact that the special provision in the 2026 General Appropriations Act authorizing loans for defense acquisition is not included in the proposed 2027 national budget. Rep. Panaligan underscored therefore the need for a separate law regarding this matter and he relayed to the secretary that the House Committee on National Defense will start to deliberate on the bill.
5. Rep. Panaligan inquired from Sec. Teodoro if he was aware of the status of US Senate Bill 4097 entitled "A Bill To Modernize the Defense Capabilities of the Philippines and for other purposes" that provides for a US$ 500 Million annual military assistance to modernize the AFP for a period of five (5) years or a total of US$ 2.5 Billion. Sec. Teodoro said that this US Senate bill has been enacted into law already. The said law states that the items needed to modernize the defense capabilities of the Philippines shall include coastal defense, long-range fires, integrated air defenses, maritime security, manned and unmanned aerial systems, intelligence, surveillance and reconnaisance, defensive cybersecurity and other defense capabilities.
5. In reply to Rep. Panaligan's question, Sec. Teodoro confirmed that there are plans to acquire two more additional guided missile frigates for the Philippine Navy although he said that "the trigger has not yet been pulled" without elaborating. Rep. Panaligan however has learned from his sources that the plan to acquire two more additional guided missile frigates will push through and most likely it will be similar to Malvar class frigates but with more updated equipment and sensors.
6. Rep. Panaligan raised again the question that he asks every budget hearing regarding the upgrading or installation of the still lacking sensors and weapons systems for the Rizal class and Malvar class frigates. Sec. Teodoro said that the upgrading or installation of the specified sensors and weapons systems are ongoing. The latest procurement monitoring report of DND includes the acquisition of said systems for the Navy frigates.
7. Rep. Panaligan raised the matter of the multi-role fighter acquisition. Sec. Teodoro said that there is a plan to acquire MRFs but it involves also a lot of systems such as the ground facilities, hangar, air refuelling capabilities, ground control and domain awareness and other support systems and that all these involve financial considerations.
8. Rep. Panaligan stated that under the Constitution it is the Executive that prepares the program of expenditures as the basis of the general appropriations bill and sets the ceiling for the expenditure items. The Constitution also prohibits Congress from increasing the appropriations proposed by the Executive unless Congress reduces the allocations for other programs and transfer the same to other programs which is difficult to do. He stated that in the case of the AFP modernization fund, the real battle is at the level of the Department of Budget and Management.