The Department of National Defense (DND) plans to expand domestic production of advanced munitions and establish additional military formations in strategic areas as it seeks to address territorial defense gaps despite funding shortfalls in its proposed 2027 budget.
Defense Secretary Gilberto Teodoro Jr. outlined the plans during a Senate hearing on the department’s proposed budget on Monday, saying the Government Arsenal must move beyond its traditional production of small-arms ammunition and develop more sophisticated defense capabilities.
“For so long, the government arsenal has not operated as an arsenal, but as a factory,” Teodoro told the Senate Committee on Finance.
He said the Government Arsenal should focus on higher-technology munitions, including indirect-fire weapons, while pursuing technology transfers through government-to-government arrangements with trusted defense partners.
These partnerships would allow the Philippines to develop sensitive defense technologies and weapons platforms through cooperation with other countries, Teodoro said.
The push for advanced weapons comes amid global competition for military equipment and critical components. The Government Arsenal achieved only 63% of its production target last year because of shortages of propellants and other essential materials in the international market.
Teodoro described the global defense industry as a seller’s market, where competing buyers may secure supplies by offering more attractive terms even when suppliers have existing contracts.
The DND’s plans also include expanding the Armed Forces of the Philippines’ (AFP) presence across the country’s more than 7,600 islands.
Teodoro said the Philippine Army had been directed to identify areas that need additional brigades, divisions and logistical facilities to sustain military operations, particularly in locations where the AFP has limited operational and logistical support.
He cited Mindoro, where the Army maintains only one brigade, and Northern Luzon, where one division covers several provinces, as areas requiring attention.
The eastern seaboard also needs substantial investment because of limited naval infrastructure and military presence, he said.
Meanwhile, the Philippine Marine Corps has been tasked to assess its organizational growth and equipment requirements to improve its mobility, deployability and firepower.
Teodoro said strengthening territorial defense requires more than acquiring weapons. The military also needs personnel, strategic facilities and logistics networks to sustain operations.
Some existing roads and bridges cannot accommodate the weight of military platforms, restricting equipment movement between bases, he said.
The DND is therefore prioritizing strategic hubs, durable access infrastructure and government-controlled supplies of fuel, ammunition and other essential materials.
The proposed expansion comes as the DND faces a substantial gap between its requested funding for 2027 and the allocations included in the National Expenditure Program (NEP).
The department requested P572.79 billion in regular funding, but the NEP allocated P324.63 billion, a reduction of P248.15 billion, or 43.32%, from its proposal.
The AFP’s requested regular allocation of P550.89 billion was cut to P312.78 billion, 43.22% below its request.
Among the major service branches, the Philippine Army’s proposed P193.23 billion was reduced to P146.87 billion, while the Philippine Navy’s P101.93-billion request was trimmed to P70.47 billion.
The Philippine Air Force’s requested P86.95 billion was reduced to P65.29 billion.
General Headquarters and AFP-wide support services recorded the largest percentage reduction among major AFP components. Its proposed P168.77 billion was cut to P30.14 billion, or 82.14% below the requested amount.
Teodoro warned that inadequate funding for area commands and strategic capabilities could force the military to concentrate resources in the areas facing the greatest threats, potentially leaving operational gaps elsewhere.
The Government Arsenal, which is expected to lead the shift toward advanced munitions, received a proposed P2.24 billion against its P2.52-billion request.
The DND also sought P133.97 billion for AFP modernization under the special purpose fund, but the NEP included only P50 billion, a 62.68% reduction from the proposal.
Despite the cuts to its request, the DND’s proposed regular allocation of P324.63 billion is 10.31% higher than its comparable 2026 budget.
Teodoro stressed the need to develop sustainable defense capabilities rather than rely solely on equipment purchases as geopolitical tensions and technological changes reshape military requirements.
Senate President Sherwin Gatchalian also emphasized the importance of sustained AFP modernization, including preparations for cyber warfare and emerging security threats.
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