A Rich Bank Without A Security Fence

Dear Editor,
May I share with you my op-ed that appeared in BusinessWorld. It is about
building credible deterrence to bring up our country to a state of readiness
like all other self-respecting states that zealously protect their people and
resources from a world fraught with risks and threats.
—Rafael Alunan III

The Philippines is like an extremely rich bank without a security fence; anyone can go in and out carting away the banks’ deposits and even aided by those inside. Why is it like that when all other countries guard their deposits tightly with their lives?

We’re stuck with an internal security mind-set that can’t be achieved without an external defense shield that effectively protects our sovereign rights in our exclusive economic zone (EEZ) or deters a threat to our sovereign territory. External and internal defense are two sides of the same coin. One without the other subverts the country’s overall security.

From the time the US bases left in 1991, every administration should have consistently invested in building our capacities to deter external threats and mitigate internal risks to national security. It’s our constitutional duty to defend ourselves. Except for the Ramos and Aquino III administrations, little was done about external defense. President Duterte is now in a position to credibly secure the country and, furthermore, change our defense partners’ outlook that we are the weakest link. If we can’t defend ourselves, how can we be relied upon?

Next door to Pagasa Island in the Kalayaan Island Group is a militarized artificial island, Subi Reef, 16 nautical miles away. China always challenges the overhead presence of our transport or surveillance aircraft. Two other artificial islands within our EEZ — Fiery Cross and Mischief — are also heavily fortified. China’s presence is also being felt in Ayungin and Recto Bank well within our EEZ. In the past week, we learned of China’s suspicious presence in Benham Rise in our Pacific seaboard, and its intent to build a structure in Scarborough.

Supreme Court Associate Chief Justice Tony Carpio texted me last Friday while I was at WESCOM, which I shared with Defense Secretary Delfin Lorenzana and the AFP’s top brass:

“In 1987, the Chinese erected a weather station on Fiery Cross Reef ostensibly to help UNESCO’s global oceanic survey. In 2014-2015, China turned the weather station into a 250-hectare military base. Now it’s the turn of Scarborough Shoal where it will install an environmental monitoring (or radar) station that will complete its radar coverage of the entire South China Sea. It could then impose an ADIZ or Air Defense Identification Zone. It will use these installations to enforce the 9-dash line and push out China’s national security border that will grab 80% of the Philippines’ EEZ and 100% of its extended continental shelf.”

In 1995, China took advantage of the loss of our defense shield by snatching Mischief Reef in our EEZ. The pretext was to build a shelter for its fishermen caught in stormy weather. Today, it is a forward operating military installation. Immediately, Congress during the Ramos administration enacted the 1st AFP Modernization Act. When China snatched Scarborough in 2012, the 2nd AFP Modernization Act was passed during Aquino III’s term that kick-started the build-up.

Over 21 years, acquisitions were mainly focused on individual combat equipment and counterinsurgency. Those for external defense lacked the underpinnings of a national security strategy to defend the national interest, uphold policy and provide clear guidance on risk reduction. It’s because the government lacks the mind-set to ensure the nation’s total security; the skill sets to integrate and work as a team; and sufficient stock knowledge to think, design and build credible deterrence.

The Duterte administration can change all that. It has already crafted our national security strategy. Its independent foreign policy has expanded the list of defense suppliers. It can count on allies that are now sufficiently motivated to help modernize our defense and law enforcement sectors. It has functioning mechanisms like the National Security Council and the Legislative-Executive Development Advisory Council to reach consensus on funding in the long-run.

Our neighbors spend on average about 3% of GDP on defense. We, on the other hand, consistently average slightly below 1%; yet, wonder why we can’t defend ourselves or bring closure to various armed insurgencies since the end of WW2. We’ve deprived ourselves of the means to challenge, enforce and apply effective force due to self-inflicted obstacles:

  • “We don’t have money” mind-set. We do. We just have to work on it like self-respecting countries with a keen sense of nationhood.
  • Amend the Procurement Act. Quality and reliability should prevail over lowest price. Level the playing field for local and foreign suppliers.
  • The Commission on Audit (CoA) must understand the concepts of defense and law enforcement to craft appropriate rules and regulations that facilitate, and not obstruct.
  • We don’t budget for preventive maintenance, repairs and spare parts. New acquisitions quickly fall into disrepair forcing cannibalization.
  • Corruption and lack of patriotism diverts attention and precious funds away from building credible deterrence.

President Duterte’s patriotic and transformative energies should be channeled to finding the appropriate funding mechanisms to build credible deterrence. Assuming the AFP needs the equivalent of 3% of GDP per year for 15 years over its three planning horizons, adjusted automatically for inflation and foreign exchange fluctuations, the following basket of options should be considered:

  • Patriot Bonds
  • Special Defense Tax (like the road users tax or sin taxes)
  • Leasing arrangements
  • Conversion of military lands into commercial and industrial parks
  • Self-reliance defense manufacturing in G2G joint ventures and PPPs
  • Serious clampdown on corruption and inefficiency in government.
  • Improve taxes and duties collection efficiency
  • Proceeds from Malampaya and GOCC net income.

Budgeted items for veterans’ pensions and civil defense could be carved out and placed under the Office of the President to lighten the load on the DND-AFP’s budget. CAPEX and OPEX could be further reduced by smartly negotiating foreign military sales and transfers with defense partners and allies.

For the nth time, let’s build our security fence once and for all. Let’s become a self-respecting nation. Let’s regain our worthiness in the eyes of both friend and foe. Let’s do so with deliberate speed. For crying out loud, let’s accomplish the mission!

Mabuhay ang Pilipinas!


Rafael M. Alunan III served in the Cabinet of President
Corazon C. Aquino as Secretary of Tourism; and later in the
Cabinet of President Fidel V. Ramos as Secretary of Interior
and Local Government.