Duterte Suggests A New Modernization Plan For The Philippine Military

The Armed Forces of the Philippines (AFP) might be allowed to seek new sources of funding that could help wean it off an unreliable annual budget. This was mentioned by President Duterte in his speech at the Philippine Army’s 58th “change of command” ceremony on October 5.

According to Duterte, the AFP can relocate from its offices in Fort Bonifacio and lease the property to commercial establishments. The substantial revenue is then used for buying new equipment. But there’s no indication this is going to happen soon.

More than a year since assuming office Duterte’s administration faces a grave national security landscape. The grueling battle for Marawi against Islamist terrorists hasn’t ended yet while negotiations with Leftist guerillas have fallen apart. The situation in the South China Sea remains precarious as Chinese vessels keep patrolling Philippine waters despite closer ties between Beijing and Manila.

Duterte’s visit to the AFP last week coincided with the arrival of more Chinese small arms. These were a follow-on to an earlier package in July and comprised 3,000 CQ-A5b carbines along with a cache of 5.56mm ammunition. Defense Secretary Delfin Lorenzana, who attended the press conference together with Army Chief of Staff Eduardo Año and the Chinese ambassador, did mention the weapons were going to the police who are familiar with the Norinco CQ.

While his defense minister was all smiles, Duterte was all praises for Filipino soldiers in Fort Bonifacio, whom he reminded had a duty to uphold the constitution. Known for his colorful tirades and populist rhetoric, Duterte delivered a speech to the highest ranking officers in the Philippine Army about his plans for their institution. In a news release from the Presidential Communications Operations Office (PCOO), the President described a program where the AFP can form joint ventures with private companies and “enter into long-term lease agreements.”

Switching between English and the vernacular, Duterte described how the armed forces can generate its own revenue from its bases, an idea he credited to his Finance Secretary Carlos Dominguez.

“I’ll give you this place,” Duterte said, referring to the vast acreage of Fort Bonifacio. “All the earnings go straight to you. Do what you want to modernize–it’s a lot of money.”

“Just start to lease here,” he said. “It will make trillion[s]. [Then] buy all the equipment you need to meet the challenges way, way ahead.”

Duterte also mentioned doubling salaries for members of the AFP and the national police force by January 2018. “I would like to leave the Presidency with a strong army and a strong police,” he said.

But the President didn’t go into specifics on buying advanced weapon systems for the AFP, unlike his assurances of new planes and helicopters during a half dozen morale-boosting trips to Marawi since June.

Duterte’s willingness to open military bases for private sector use isn’t out of the ordinary. The once sprawling US facilities in Clark and Subic Bay, for example, were made into export processing zones once these reverted to the Philippine government during the 1990s. Even Fort Bonifacio, which used to be a huge US Army base until Philippine independence in 1946, had parts of its land area bought by developers and transformed into Metro Manila’s new business district. This succeeded because the government’s Bases Conversion and Development Authority (BCDA) oversaw different projects to commercialize public land.

Creating joint ventures involving the Department of National Defense (DND) and potential contractors isn’t too far-fetched either. A Defense Industrial Estate has been open for business in the province of Bataan since 2015 and its goal is attracting manufacturers who can localize production for military apparel and munitions.

The AFP are still carrying out separate modernization plans for each of its branches. But its immediate needs for counter-terrorism are covered by US assistance. If Duterte’s openness to Filipino generals doing real estate becomes policy it can help with local procurement but also increase the risk of graft and corruption, which aren’t unknown in the armed forces.