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EJ Macababbad - The Philippine Star
February 21, 2026 | 12:00am
MANILA, Philippines — The Philippines missed its chance to receive a $1-billion defense loan from the United States through a bipartisan defense bill last year due to bureaucratic hurdles and restrictions imposed by domestic law.
Philippine Ambassador to the US Jose Manuel Romualdez said American officials had already offered $1 billion to strengthen Manila’s defense capabilities with “lenient” terms attached.
According to the draft version of the National Defense Authorization Act (NDAA) for 2026 signed by US President Donald Trump on Dec. 18, 2025, the US proposed a direct loan of $1 billion for the Philippines, to be made available by the State Department between fiscal years 2026 and 2030.
Domestic loan processing and a $300-million cap on external defense loans under Presidential Decree 415 (signed in 1974), however, compelled the US to redirect the funds to Poland.
“We were not ready for it,” Romualdez told “Storycon” on One News on Thursday, adding that he is “frustrated” that such an opportunity had slipped away.
“We could be the ones to dictate where to put the $1 billion, but we have a (loan) process that would take something like four to five months,” he said.
“They could not wait. It needed to be approved in less than a month or one and a half months, if I remember correctly,” he added.
Citing Defense Secretary Gilbert Teodoro, Romualdez said external defense loans must undergo a “rigorous process” involving agencies like the Department of Finance and the Department of Economy, Planning and Development.
Teodoro already pushed to raise the limit on external defense loans the government can obtain to support the Armed Forces of the Philippines Modernization Program. He said the current cap hampers the agency’s ability to acquire necessary assets for the program’s implementation.
Ultimately, the Philippines received $2.5 billion in security assistance under the Philippines Enhanced Resilience Act – part of bills included in the NDAA – to be doled out over five years, focusing on command and control and cybersecurity.
