DND submits P240.7-B 2023 budget proposal to Congress

The Department of National Defense (DND) is seeking P240.7 billion for its modernization projects, pensions and expansions next year.

During the budget briefing of the DND, Defense Senior Undersecretary and Officer-in-Charge Jose Faustino Jr. presented the proposed 2023 cash-based expenditure program for the DND.

Of the P240.7-billion budget proposal, P240.3 billion are new appropriations and P0.4 billion are automatic appropriations.

Faustino said the DND budget for next year is 9 percent higher than the current year’s approved spending level of P220.9 billion with increments going to the three major service commands—the Army, Air Force, Navy, and the General Headquarters of the Armed Forces of the Philippines (AFP).

By expense class, Faustino said P138.4 billion will go to personal services (PS), P58.6 billion will go to maintenance and other operating expenses (MOOE), and P43.3 billion will be used for capital outlay (CO).

For pension, he said the decrease in the AFP pension amount—from P64 billion in 2022 to P59 billion in 2023—is due to a more aggressive cleansing of pension payroll activities, which resulted in the reduction of the actual number of pensioners.

Also, he said, the allocation of P10.8 billion for veterans is the same for 2023.

In 2023, the House Congressional Policy and Budget Research Department’s (CPBRD) budget noted bulk of the DND budget—P234.2 billion or 97.3 percent will go to the AFP and will be distributed to the following commands: Philippine Army (P109.9 billion or 45.6 percent), GHQ/AFP (P54.1 billion or 22.5 percent), Philippine Air Force (P35.4 billion or 14.7 percent), and the Philippine Navy (P34.8 billion or 14.4 percent).

The remaining P6.5 billion or 2.7 percent will be shared by Office of the Secretary, Government Arsenal, National Defense College of the Philippines, Office of Civil Defense, Philippine Veterans Affairs Office and Veterans Memorial Medical Center.

Of the 15 defense programs, the CPBRD said five are major recipients of funds—Land Forces Defense Program (P102.7 billion); Joint Force Capability Program (P43.6 billion) of which P40 billion will fund the requirements of the Revised AFP Modernization Program, Air Forces Defense Program (P33.3 billion), Naval Forces Defense Program (P30.5 billion), and Joint Force Operations Program (P4.1 billion).

The combined allocation of these five defense programs (P214.2 billion) accounts for 97.3 percent of the entire operations budget of the DND in 2023.

As of June 20, 2022, the CPBRD said the Revised AFP Modernization Program (RAFPMP) under Horizon 1 (2013-2017) had completed 33 out of the 53 projects approved by the President with a total amount of P97.1 billion.

It added that the remaining 20 projects amounting to P46.7 billion are under contract implementation.

“There are 96 approved projects by the President under Horizon 2 [2018-2022] with a total funding requirement of P425.9 billion. Of the 96 approved projects, only 13 projects amounting P28.9 billion have been completed as of 20 June 2022,” the budget note added.

It added that the remaining 83 projects amounting P402.9 billion are in various stages such as contract implementation, procurement, and/or needing funds to start the implementation.

“If an annual allocation of P40 billion for the AFP Modernization Program will not change, it will take eight years to complete Horizon 1 and 2. Given the funding deficiency for Horizon 1 and 2, the implementation of Horizon 3, originally scheduled for 2023 to 2028 is likely to be unfunded in the next several years,” it added.


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