It was supposed to be the crown jewel of the Philippine Air Force. The Lockheed Martin F-16 Block 70/72 Viper, a world-class multirole fighter, was meant to finally give Manila the teeth it needs in the increasingly tense South China Sea. But as of early 2026, the hangars remain empty.
Money. It always comes down to the money.
The Philippines has officially hit the "pause" button on its plan to acquire 20 of these advanced American jets. While the U.S. State Department greenlit the potential $5.6 billion sale back in 2025, the reality of the Philippine national budget has crashed into those ambitions like a bird strike.
The $5.6 Billion Chokepoint
Let’s be honest: $5.6 billion is a staggering amount of money for a developing nation. To put that in perspective, that single purchase is nearly equivalent to the Philippines' entire annual defense budget for an entire year.
Philippine Ambassador to the U.S. Jose Manuel "Babe" Romualdez hasn't minced words about it. He’s repeatedly called the funding the "choke point" of the whole deal. It’s not that Manila doesn't want the planes—they definitely do. It’s just that the math doesn't work. Not yet, anyway.
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The proposed deal included:
- 16 single-seat F-16C Block 70/72 models.
- 4 twin-seat F-16D trainers.
- A massive suite of sensors, including the APG-83 AESA radar.
- A hefty stockpile of missiles and advanced munitions.
But a 15% downpayment on a deal this size would eat up almost the entire 2026 allotment for the Revised AFP Modernization Program (RAFPMP). Defense Secretary Gilberto "Gibo" Teodoro has been practical. He knows he can’t spend the entire modernization budget on one shiny object while the Navy still needs ships and the Army needs land-based missile systems.
Strategy Shift: Land and Sea First?
Manila is currently pivoting. While the F-16 is "on hold," the government is looking at "other priorities." You’ve probably seen the news about the BrahMos missile systems from India or the new frigates coming in from South Korea’s HD Hyundai Heavy Industries.
These are arguably more "bang for the buck" in a literal sense. A land-based missile system can deter a ship for a fraction of the cost of maintaining a fleet of high-end fighter jets.
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The Philippine Air Force isn't sitting idle, though. Instead of the pricey Vipers, they are doubling down on what they already know. In late 2025, Manila moved toward an upgrade project for their existing fleet of KAI FA-50PH light fighters. It’s a smart, if less glamorous, move. By installing AESA radars and increasing the range of these South Korean "Fighting Eagles," the PAF gets a "mini-MRF" capability without the $5 billion price tag.
The "Gripen" vs "KF-21" Elephant in the Room
The F-16 pause has blown the door wide open for competitors.
For years, the Swedish Saab JAS-39 Gripen has been the F-16’s biggest rival in the Philippines. It’s cheaper to fly, easier to maintain, and can take off from provincial highways. But there’s a new player: the South Korean KF-21 Boramae.
KAI (Korea Aerospace Industries) has a massive advantage in the Philippines because of the FA-50's success. There’s already a logistical pipeline. There’s trust. And recently, the Philippine government signed the 2026 General Appropriations Act, which includes a special provision allowing the military to secure loans and Official Development Assistance (ODA) from "friendly" nations.
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South Korea is very good at offering these kinds of soft loans. The U.S., historically, prefers Foreign Military Financing (FMF) grants, but those grants rarely cover the cost of 20 brand-new Block 70 Vipers.
What Happens Next?
Is the F-16 deal dead? No. But it is in a coma.
For the F-16 to move forward, one of two things needs to happen. Either the U.S. offers a financing package so generous it’s basically a gift, or the Philippine economy grows fast enough to support a massive increase in the 2027-2028 defense budgets.
Currently, the Philippines is focused on "Horizon 3" (now Re-Horizon 3), a ten-year plan that seeks to spend roughly $35 billion on defense. But as any homeowner knows, the "wish list" and the "bank account" are rarely in sync.
Actionable Insights for the Near Future:
- Watch the FA-50 Upgrades: This is the most reliable indicator of air power progress. If the upgrades happen fast, the need for a high-end MRF becomes less "desperate" and more "long-term."
- Monitor ODA Loans: The new 2026 budget rules mean the Philippines can now borrow specifically for weapons. Keep an eye on which country (likely South Korea or Sweden) offers the best interest rates.
- U.S. Defense Diplomacy: Secretary of Defense Pete Hegseth has been pushing for stronger ties. If the U.S. wants the F-16 in the Philippines for "interoperability" reasons, they might have to subsidize the sticker price.
The Philippines is playing a high-stakes game of "budget tetris." They need to defend their borders today, but they can't afford to go bankrupt doing it. For now, the Fighting Falcon will have to wait on the tarmac.