Indonesia and Philippines commit to 2013 budget growth

Neighbours Indonesia and the Philippines have proposed strong increases in defence and related expenditure for Fiscal Year 2013 (FY13) as the two South East Asian nations reinforce a commitment to enhance national security across their respective archipelagos and exclusive economic zones.

Indonesia's Cabinet Secretariat announced on 18 May a Ministry of Defence (MoD) budget of IDR76.54 trillion (USD8.1 billion), an 18 per cent increase on FY12. The Philippines' Department of Budget and Management (DBM) said on 19 July that it has allocated the Department of National Defense (DND) with a FY13 budget of PHP121.6 billion (USD2.9 billion), a growth of 12.5 per cent.

The planned defence expenditures represent a continuation of both countries' strategies to allocate a low proportion of gross domestic product (GDP) to defence in light of pressing requirements to improve social welfare and infrastructure. Indonesia allocates about 0.8 per cent of GDP to defence, while the Philippines earmarks about 1.1 per cent. The countries have shown a tendency in the past to offset shortfalls in defence spending through off-budget resources.

The DBM said that the DND budget includes PHP47.2 billion for "internal security activities" and PHP2.1 billion for "territorial defence initiatives". The Armed Forces of the Philippines (AFP) Capability Upgrade Programme (CUP) will also receive PHP5 billion, which the DBM said will be directed at "critical upgrades in AFP equipment, seacraft and aircraft".