Heidi L Mendoza’s scientific contributions

The tight fiscal space in the national government's budget remains to be a challenge for all agencies. This has been exacerbated by the ongoing COVID-19 pandemic. This paper is the first phase of the research on increasing and sustaining investments in national security and focuses on how the Armed Forces of the Philippines (AFP) has appropriated and utilized its budget to achieve its goals and comply with its mandate. Not covered in this paper are the recommended reforms to sustain national defense investments; this will be taken up in the second phase. While the budget allocation for the military has increased through the years, these investments remain insufficient. There is a large disparity between what the AFP requests and what the government provides through the General Appropriations Act (GAA). Research findings reveal that the government-appropriated budget is not enough for the military to meet its needs year-on-year. The FY 2022 budget is also significantly larger than the capital budget, with the allotment for personnel services (PS) getting the largest share. The AFP's budget is skewed towards supporting the counterinsurgency campaign to address various internal security challenges. The Philippine Army (PA), among other major services, benefited from this arrangement due to its mission and manpower requirements. This is true in terms of the annual appropriations and the annual average budget increases. Also, budget sensitivity to economic shocks, such as the 1997 Asian Financial Crisis and the COVID-19 pandemic, resulted in budget reversions to the national government. It affected the AFP expenditure program, with the defense modernization suffering the most when it needed to tighten its belt due to these external shocks.

This paper documents the second phase of the study on national defense spending in the Philippines. The discussion is set within the context of global and regional patterns in defense spending; the available fiscal space in the Philippine government's current budget; and defense-related policy pronouncements of President Ferdinand Marcos Jr., among others. The study employed a multi-method approach, which included the conduct of a survey to surface perceptions of senior AFP officers (N=54) on three aspects of national security, namely organizational arrangement, bureaucratic behavior, and legal frameworks. An exhaustive review of financial and audit reports meanwhile aimed to gauge financial management within the AFP, particularly in terms of budget credibility, allocative efficiency, and expenditure quality. The findings support the need for (1) a more responsive AFP budget; (2) improved internal efficiencies; and (3) organizational reforms that will allow the organization to cope with current and emerging security challenges. Without additional funding, the AFP cannot be expected to develop new capabilities effectively. The study offers four potential approaches to cost management: rightsizing, rationalization, and streamlining reforms; traditional cost management; structural cost management; and next-generation (NextGen) cost management. The study also suggests long-term legislative actions, including the development of a new National Defense Act in place of the decades-old NDA. Legislation on institutional reforms in defense agencies would also welcome developments to strengthen national security investments in the country.