Philippine media recently reported two significant developments that imply the Philippine Navy (PN) is on the verge of a major technological leap. These developments—the PN’s test firing of a short-range surface-to-surface missile and the announcement that it is considering acquiring submarines from Russia—could bring the PN fleet, currently just six modern naval vessels with guns and some World War II-era ships, up to parity with other navies of Southeast Asia.

On August 9, a PN Mark III multipurpose attack craft successfully tested its newly acquired Rafael Advanced Defense Ltd. Spike-ER surface-to-surface missile against a floating target six kilometers away. The Spike-ER—the PN’s first ship-borne missile system—was purchased from Israel for $11.6 million, and is capable of penetrating one meter of rolled homogeneous armor from a range of eight kilometers. A navy spokesperson proudly announced that the PN now “has a significant capability against surface targets,” and called the achievement “a milestone” as the PN prepares to acquire more sophisticated and powerful missile weapon systems. The platform the missile was tested from is one of nine such craft, three of which will be armed with the new system. They will be deployed to the Zamboanga Peninsula in Mindanao and to Palawan, sites of critical importance for Philippine maritime security. Secretary of National Defense Delfin Lorenzana announced after the Spike-ER demonstration that the Philippines would be acquiring more missile weaponry to arm its new and bigger ships.

The PN is also eyeing the purchase of two conventional diesel-electric submarines. The submarines included under consideration are from France, South Korea, Germany, and Russia—although Secretary Lorenza recently revealed that President Rodrigo Duterte has a preference for the latter. Since 2015, the PN has operated a submarine program office that is in the process of reviewing contemporary submarine designs and drawing up concepts for its operational use. Last month, President Duterte approved a $6 billion budget for the revised Second Horizon stage of the Armed Forces of the Philippines modernization program that could include submarine acquisition for the PN. The Department of National Defense reasoned that the acquisition of the submarines would boost the morale of the armed forces and improve the PN’s capability to defend Philippine-occupied land features in the South China Sea.

Aware that the Philippine government has limited funds for the acquisition and eager to make a sale, Russia has offered soft loans for the PN to purchase two second-hand Kilo-class submarines. In addition, in early August 2018 the PN and the Russian Navy started discussion on a draft memorandum of understanding that would see Russia provide the PN with submarine training to support military operations, maintenance, and sustainability. The Philippines will decide whether or not to acquire its submarines, including a final decision on which nation to buy from, within the next year.

Since becoming president in June 2016, President Duterte has supported the military modernization program that President Benigno Aquino III relaunched in response to China’s maritime expansionism in the South China Sea. Duterte has increased the 2017 defense budget by 15 percent and the supplemental allocation for the modernization program from $400 million to $500 million, approved the acquisition of two guided-missile frigates from South Korea, and received five TC-90 reconnaissance aircraft from Japan for the PN. Interestingly, President Duterte is bankrolling this expensive build-up of his military’s territorial defense capabilities at the same time that he is spearheading a rapprochement with China.

Even with President Duterte’s support for the PN to take its big step into the 21st century, the PN faces several major obstacles. Firstly, the PN is actually in a tight financial spot. It still needs to replace part of its fleet that dates back to World War II, overhaul its few modern, overworked surface combatants, and more importantly, build proper naval bases capable of housing its recently acquired Hamilton class cutters. Currently, the PN’s newest surface combatants are forced to use civilian piers all over the country.

Secondly, the PN will have to compete with the other services, especially the Army, for its rightful share of the defense budget. The 2017 siege of Marawi City and an ongoing communist insurgency have enabled ground forces to claim the lion’s share of the defense budget, and the army has been given a green light to recruit an additional 20,000 soldiers for counterinsurgency operations and for acquiring towed and self-propelled howitzers, light tanks, and multiple launch rocket systems to develop its conventional capabilities.

Lastly, Secretary Lorenzana and the Armed Forces Philippines will have to convince President Duterte and his economic officials to further increase the defense budget in the face of more pressing domestic priorities. Chief among these are Duterte’s ambitious and expensive “Build, Build, Build” infrastructure program that will cost $168 billion over the next four years, and the plan to move the Philippines from a unitary to a federal system of government that is anticipated to cost $33 billion before the end of Duterte’s term in 2022.

Header image courtesy of Wikimedia Commons user Rhk111.