THE Philippine government has renewed its call for China to pay for damages over the June 17, 2024 Ayungin Shoal incident, where China Coast Guard (CCG) personnel allegedly impaired Philippine property and unlawfully seized military equipment and personal belongings.
Meanwhile, The Heritage Foundation, a prominent American think tank and lead organization for Project 2025, urged the Philippines to strengthen its defense posture and capabilities in light of recent Chinese aggression at Bajo de Masinloc.
In another development, the proposed 2026 national budget allocates ₱430.87 billion to the defense sector, up nearly 14 percent from this year’s ₱378.89 billion, the Department of Budget and Management (DBM) announced.
In a statement released Friday through Malacañang, Foreign Affairs Secretary Ma. Theresa Lazaro said the country “reiterates its demand to China for compensation for the damage caused to Philippine vessels and equipment… as well as the return of its firearms and equipment, and the personal effects of its personnel that were illegally seized on that date.”
To recall, the confrontation involved CCG personnel obstructing a humanitarian rotation and resupply mission of the Armed Forces of the Philippines (AFP) to the grounded BRP Sierra Madre at Ayungin Shoal. The incident left several personnel injured, including a Philippine Navy trooper who lost a finger.
The renewed demand comes shortly after a recent maritime collision between two Chinese vessels in Bajo de Masinloc (Scarborough Shoal), which Beijing has blamed on Manila, but strongly denied by the Philippine government.
The AFP earlier announced its intention to demand ₱60 million in compensation from China for damages sustained during the operation. Beijing has previously rejected similar demands.
In a press briefing last year, the Chinese Foreign Ministry dismissed the AFP’s compensation request, made before the signing of a temporary arrangement concerning Ayungin Shoal.
Speaking at a Stratbase Institute roundtable discussion dubbed “Prospects for the Philippines–United States Alliance in a Complex Geopolitical Landscape”, Heritage Foundation senior policy advisor for defense budgeting and NATO Policy expert Wilson Beaver stressed that Washington’s priority is for allies like the Philippines to build self-defense capacity, regardless of the source of their military equipment.
“We don’t have a strong preference for whether the Philippines buys American, Japanese, or Korean equipment. We just want the Philippines to have more military capabilities to defend itself so that there’s more we can both do for each other in the region,” Beaver said.
He added that such investments should also generate socio-economic benefits, including job creation through industries like shipbuilding and defense manufacturing.
Beaver noted that the Philippines and Taiwan were the only nations exempted from a recent U.S. foreign military assistance review, underscoring Washington’s commitment to regional security. “This shows the current administration is taking this region extremely seriously and prioritizing our relations with our closest friends in the region,” he said.
Robert Peters, senior research fellow for Strategic Deterrence at The Heritage Foundation, highlighted the importance of public awareness in driving defense modernization.
“If you don’t have that popular support, you are simply not going to get the political direction that you need to get those capabilities,” Peters said.
“The goal is not to fight a war with China, the goal is to deter them from taking out aggressive actions against sovereign nations within the theatre,” he added.
Stratbase Institute president Victor Andres Manhit underscored that the U.S.–Philippines alliance remains a cornerstone of regional stability and a model for nations upholding the rule of law. “As both nations invest in each other, their partnership grows stronger, more agile, and more meaningful,” Manhit said.
Beaver and Peters are visiting the Philippines as part of a two-week tour across Asia to meet with U.S. allies, assess security concerns, and identify priority capabilities and resources. Their findings will be included in a forthcoming report aimed at strengthening U.S. relations with the Philippines and enhancing regional security.
Under the National Expenditure Program (NEP) for fiscal year 2026, most of the funds will support defense programs for the Armed Forces of the Philippines’ (AFP) land, air, and naval units. The package includes ₱40 billion for the Revised AFP Modernization Program.
“The Defense sector will receive ₱430.87 billion, reflecting a ₱51.98 billion or 13.72-percent increase from the FY 2025 GAA level to strengthen our defense capabilities,” the DBM said, noting that the allocation covers ₱116.31 billion for land forces, ₱54.10 billion for air forces, and ₱53.73 billion for naval forces.
AFP spokesperson Col. Francel Margareth Padilla said the 2026 modernization budget “is a clear statement of our nation’s resolve to protect its sovereignty amid escalating geopolitical tensions.” She added that the funds will accelerate the Comprehensive Archipelagic Defense Concept and strengthen AFP capabilities on land, sea, air, and cyberspace.
“Every peso will be spent with transparency and purpose to ensure our forces are mission-ready to safeguard our maritime domains, defend our territories, and uphold peace and stability,” Padilla said.
The DBM submitted the ₱6.793-trillion NEP to the House of Representatives on Wednesday.
President Marcos recently confirmed that the Philippines is acquiring additional BrahMos missiles from India as part of ongoing military modernization. “We are not gearing up for war; we are simply reacting to the challenges we are facing,” Marcos said.
The budget proposal comes amid heightened tensions in the West Philippine Sea. On Wednesday, a Chinese fighter jet reportedly intercepted a Philippine Coast Guard aircraft near Bajo de Masinloc. Two days earlier, Chinese vessels used water cannons, performed dangerous maneuvers, and shadowed Philippine ships in the same area.
The West Philippine Sea refers to the maritime areas on the western side of the Philippine archipelago including Luzon Sea and the waters around, within and adjacent to the Kalayaan Island Group and Bajo de Masinloc.
