The secretary of Finance has been granted new authority under the 2026 national budget to negotiate loans and grants to fund the modernization of the Armed Forces of the Philippines (AFP), House Minority Leader Marcelino Libanan said Sunday.

Libanan disclosed that Congress introduced a special provision in the 2026 General Appropriations Act allowing the finance chief to enter into domestic and foreign financing arrangements. The provision aims to provide the government greater flexibility in funding long-term defense acquisitions.

“In addition to the annual appropriations for the AFP Modernization Act Trust Fund, the Secretary of Finance... is authorized to negotiate, contract, and enter into foreign and domestic financing arrangements,” the provision reads.

Any financing, including credit facilities and blended mechanisms, must be approved by the president with the concurrence of the Monetary Board.

The move comes as the government seeks to speed up the delivery of advanced weapons systems and surveillance technology.

Defense contracts are often highly technical and expensive; Libanan noted that accessing various financing options, such as concessional loans, can significantly reduce costs.

Under the 2026 budget, Congress allocated P40 billion in capital outlays for military modernization, an increase from P35 billion in 2025. An additional P50 billion was authorized under unprogrammed appropriations, which are contingent on excess revenue collections or new loan approvals.

Libanan urged Congress to pass a new military modernization law this year, as the current 15-year program enacted in 2012 is scheduled to expire in 2027 as he stressed that long-term planning is essential as the military shifts its focus toward external defense capabilities.