INSIDER VIEW | Modernizing National Defense through strategic PPPs

Public-Private Partnerships (PPPs) are traditionally associated with transport, water, energy, and social infrastructure. 

However, the evolving security landscape—and the modernization agenda of the Department of National Defense (DND) and Armed Forces of the Philippines (AFP)—show that defense institutions can also harness PPPs to strengthen readiness, improve facilities, and optimize resources, all without privatizing core military functions.

Properly designed, PPPs can supplement state capability by mobilizing private capital, technology, and management expertise while safeguarding national security and sovereign control.

Alberto Agra

"PPPs for national defense represent a strategic pathway for the Philippines to modernize military infrastructure, expand support systems, and optimize land and assets—without compromising sovereignty or security. "

Where PPPs can support defense infrastructure

PPPs for defense must focus on non-combat, non-governmental, and non-sovereign functions, as these are non-delegable. 

These include: 

• Military bases and buildings: construction, rehabilitation, expansion, and maintenance of barracks, classrooms, training centers, administrative buildings, warehouses, hangars, armories (as structures only), and command-and-control centers (excluding operation of systems).
  
  
• Housing and welfare facilities: Soldier and civilian employee housing, hospitals, clinics, wellness centers, recreation facilities, and family support infrastructure.
  
  
• Logistics, supply Chains, and support Systems: Warehousing, cold storage, fleet maintenance depots, ICT infrastructure, cybersecurity buildings (excluding core cyber defense functions), and inventory management systems.
  
  
• Ammunition and equipment manufacturing buildings: Design, finance, and building of manufacturing plants or storage structures, provided the operation, handling, and use of ammunition remain under full government and military control.
  
  
• Training facilities: Simulation centers, shooting ranges, academies, skills centers, obstacle courses, and multipurpose complexes, with the private sector providing construction and facility management (but not military instruction or operational training).
  
  
• Management but not operation of assets: Private partners can manage maintenance, property management, estate development, utilities provision, ICT network upkeep, and procurement support, as long as they do not operate weapons, ammunition, or combat systems.

Legal framework and limits 

The PPP Code shall be the governing law for these infrastructure and development projects and services. 

Under said law, DND and AFP can enter into build-transfer arrangements, joint ventures, and leases, and although not stated, build-maintain-transfer and build-transfer-maintain schemes can be pursued.

However, core sovereign defense functions cannot be delegated or shared with the private sector such as:

• Active defense operations
• Military strategy, troop deployment, command and control
• Use, operation, and firing of weapons and ammunition
• Intelligence and surveillance operations
• Combat training and military decision-making

These functions require exclusive state control under constitutional and national security principles.

Commercial opportunities in defense properties

The vast real estate holdings of the DND and AFP present opportunities for commercial arrangements that generate revenue, reduce fiscal burden, and support modernization.

Through joint ventures, leases, usufruct, and co-development, the government can unlock the value of:

• Underutilized camps or buffer zones
• Perimeter properties suitable for business parks, logistics hubs, or housing developments
• Idle lands convertible for renewable energy projects or telecommunications towers 
• Airstrips and ports that can host commercial aviation, logistics, or maritime support services

These projects strengthen the financial sustainability of defense institutions. Revenues can be earmarked for modernization, welfare programs, and capability enhancement.

For purely commercial or asset monetization schemes, like hotels and malls on government land, the DND and AFP can adopt their own guidelines. 

For hybrid arrangement of core and commercial, the PPP Code must be followed.

The promise of PPPs for national defense

PPPs for national defense represent a strategic pathway for the Philippines to modernize military infrastructure, expand support systems, and optimize land and assets—without compromising sovereignty or security. 

The defense sector can benefit from innovation and efficiency while preserving its constitutional mandate.