Philippines modernizes military amid escalating South China Sea crisis

The Philippines is embarking on an ambitious Re-Horizon 3 military modernization initiative amidst the escalating territorial disputes in the South China Sea. Despite financial constraints, the country aims to bolster its defense capabilities through strategic acquisitions. 

With an anticipated increase in defense expenditure, reaching US$6.2 billion in 2029, the Philippines seeks to enhance maritime and air defense capabilities to navigate regional complexities and safeguard its interests, according to GlobalData, a data and analytics company.

China claims 90 percent of the South China Sea, some of it 500 miles (804 km) from the coast of China, in waters surrounding Vietnam, Malaysia, Brunei, Indonesia and the Philippines. The Chinese Communist Party (CCP) has militarized the Paracel and Spratly Islands by building military outposts and airstrips. Chinese coast guard and militia fishing fleets have swarmed these waters and there were frequent clashes with Philippine fishing and supply boats in recent months.

In a latest incident on March 23, Chinese coast guard ships hit a Philippine supply boat with water cannons near the disputed Second Thomas Shoal, causing injuries to its navy crew members and heavy damage to the wooden vessel.

According to an international tribunal’s legally binding decision issued in July 2016, China has no lawful maritime claims to the waters around Second Thomas Shoal, also known as Ayungin Shoal, a low tide reef in the Spratly Islands within the Philippines exclusive economic zone. As provided under the 1982 Law of the Sea Convention, the 2016 arbitral decision is final and legally binding on China and the Philippines. However, this ruling has not stopped the CCP from aggressively staking sovereignty.

GlobalData’s report revealed that the Philippines’ defense acquisition expenditure is anticipated to grow at a steady compound annual growth rate (CAGR) of 4.9 percent during 2025 to 2029. During the same period, defense expenditure is anticipated to grow at a CAGR of 6.2 percent.

As part of the PHP2 trillion (US$35 billion) Re-Horizon 3 initiative, slated for implementation over the next decade, plans are in place to progressively enhance the procurement of modern weaponry while phasing out obsolete ones.

Rouble, aerospace and defense analyst, GlobalData, commented: “The execution of the Re-Horizon 3 phases hinges on the performance of the Philippine economy. The funding constraints compelled a review and adjustment of the weapons wish list of the initial Horizon 3 plan, emphasizing a practical approach to align the objectives with the available resources. Despite these challenges, the revised version maintains its commitment to bolster the Philippine military, recognizing the need to strengthen its defense posture.”

In line with its defense modernization strategy, the Philippines is enhancing its defense capabilities in the maritime and air domain. Some of the major ongoing programs include the acquisition of Wonhae-class offshore patrol vessels (OPVs), missile corvettes, fast attack interdiction boats, and S-70 Black Hawk helicopters. These acquisitions address the key areas of maritime security, enabling rapid response, and improving reconnaissance and surveillance, aligning with the broader defense modernization initiatives undertaken by the Philippine government.

Rouble concluded: “The focus on enhancing the naval assets underscores the country’s commitment to safeguard its maritime interests and maintain a robust defense stance in the face of the evolving regional complexities, especially in the South China Sea. The road ahead for the Philippines involves overcoming economic constraints, strengthening the defense industrial base, and navigating the complexities of international alliances to achieve the desired modernization goals.”

In a statement on March 23 in a show of support for the Philippines, U.S. State Department spokesperson Matthew Miller said: “The United States stands with its ally the Philippines and condemns the dangerous actions by the People’s Republic of China (PRC) against lawful Philippine maritime operations in the South China Sea on March 23.  

“PRC ships’ repeated employment of water cannons and reckless blocking maneuvers resulted in injuries to Filipino service members and significant damage to their resupply vessel, rendering it immobile.  The PRC’s actions prevent normal personnel rotations and deprive Filipino service members at Second Thomas Shoal of necessary provisions.  This incident marks only the latest in the PRC’s repeated obstruction of Philippine vessels’ exercise of high seas freedom of navigation and disruption of supply lines to this longstanding outpost.

“The PRC’s actions are destabilizing to the region and show clear disregard for international law.  According to an international tribunal’s legally binding decision issued in July 2016, the PRC has no lawful maritime claims to the waters around Second Thomas Shoal and Second Thomas Shoal is a low tide feature clearly within the Philippines exclusive economic zone.  

“As provided under the 1982 Law of the Sea Convention, the 2016 arbitral decision is final and legally binding on the PRC and the Philippines, and the United States calls upon the PRC to abide by the ruling and desist from its dangerous and destabilizing conduct.

“The United States reaffirms that Article IV of the 1951 U.S.-Philippines Mutual Defense Treaty extends to armed attacks on Philippine armed forces, public vessels, or aircraft – including those of its Coast Guard – anywhere in the South China Sea.”

Photo credit: iStock/ h3k27. Philippine Military Academy cadets performing silent drill during the celebration of Philippines 114th Independence Day in Quirino Grandstand.

The best maritime news and insights delivered to you.

subscribe maritime fairtrade

Here's what you can expect from us:

  • Event offers and discounts
  • News & key insights of the maritime industry
  • Expert analysis and opinions on corruption and more