Teodoro pushes to remove cap on foreign military loans amid China tensions

MANILA – Defense Secretary Gilberto Teodoro Jr. on Tuesday urged lawmakers to remove a statutory cap limiting the Philippines' capacity to borrow from foreign lenders for military modernization, as the country grapples with ongoing tensions in the South China Sea.

During House hearings on the Department of National Defense's 2027 budget, Teodoro emphasized that the existing borrowing ceiling constrains the military's ability to acquire modern equipment and technology needed to protect national interests. He argued that lifting the restriction would provide greater financial flexibility to pursue critical defense programs.

The defense chief's appeal reflects growing concerns about the country's military readiness relative to regional security challenges. The Philippines has faced repeated incidents involving Chinese vessels near disputed maritime areas, prompting calls for accelerated modernization of the armed forces.

Tedoro did not detail specific equipment or programs that would benefit from increased foreign financing. However, the Defense Department has previously outlined multi-year initiatives to upgrade naval capabilities, air defense systems, and overall force modernization.

The proposal now requires congressional action, with lawmakers expected to weigh the security imperatives against broader fiscal considerations during the 2027 budget deliberations.