NATIONAL DEFENSE EXPENDITURES

As stated earlier, national defense expenditures rank third in the overall expenditure program of the national
government, form level of 148.2 million in FY 1955, this expenditures item increased to 190.1 million in fiscal year
1960 and soared to 296.0 million in fiscal year 1965. It climbed further to 615.1 million in 1970. In fiscal year 1971 it
was estimated at 648.6 million and in 1972 it is projected to be 681.8 million. For the period under review, national
defense expenditures averaged 287.4 million, growing at the rate of 10 percent annually and accelerating its peace
during the last five to six years. From 1955 to 1970 national defense expenditures were estimated as representing some
15.1 percent of total expenditures. Otherwise stated, about 0.15 of every 1.00 spent by the government where devoted
to national defense (See Table 1).

TABLE 14
Expenditure of National Government on National Defense,
All Funds Combined, FY 1955-1972
(In Million Peso)
National Maintenance of
Year Total
Defense Peace and Order
1955 148,166 131,996 16,170
1956 166,150 148,004 18,146
1957 156,979 137,937 19,042
1958 181,109 153,734 27,375
1959 183,634 152,373 31,261
1960 190,093 153,362 36,731
1961 196,668 156,219 40,449
1962 206,341 160,342 45,999
1963 272,688 208,869 63,819
1964 297,792 229,596 68,196
1965 295,995 224,518 71,477
1966 323,933 249,242 74,691
1967 379,975 290,339 89,635
1968 458,840 345,185 113,655
1969 524,952 384,757 140,195
1970 615,058 458,074 156,984
1971 648,645 444,564 204,081
1972 681,842 455,588 226,254
Average rate of growth
(1955-1970) 10.1 8.7 16.4
Average annual expenditures
(1955-1970) 287,398 224,054 63,344
Percent distribution 100.0 78.0 22.0
a
Budget Estimates.
Source: budget of the national government for the fiscal year 1957-1972.

A. The Armed Forces of the Philippines

The Armed Forces of the Philippines (AFP) is the guardian of the nation’s security. It is charged with the
important function of providing maximum defense and security to the country, both internal and external. It is divided
into four major commands: the Philippines Army (PA), the Philippine Constabulary (PC), the Philippines Air Force
(PAF), and the Philippine Navy (PN). The Philippines Army has the mission of defending te country from the possible
external aggression whereas the Philippines Constabulary is assigned the task of maintaining internal peace and
security. The PC acts as the country’s national police force. The Philippine Air Force is charged with the responsibility

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of defending the country against possible air attacks and the Philippines Navy has the function of manning the naval
defenses.
Overriding importance – No one would dispute the fact that the existence of the military as the guardian of the
nation is an indispensable necessity. To repeal a hackneyed expression, “eternal vigilance is the price of liberty.”
Although a country like the Philippines renounces war as an instrument of national policy, at least a part of its
resources must be devoted to national defense. The Constitution of the Philippines ordains that “The Defense of the
State is the prime duty of the government; and in the fulfillment of this duty all citizens may be required by law to
render personal military or civil service.” As a substantive follow-up to this constitutional mandate, the first act passed
by the National Assembly when this country assumed Commonwealth status was Commonwealth Act No. 1, otherwise
known as the National Defense Act 1935. Among other things the law provides an army of two major grouping: a
small regular army and a large reserve force or citizen army, its rationale being the provision of a regular nucleus of
trained professional army men and stand-by reserve or citizen army capable and ready to be drafted into the regular
force when the need arises.
The Constitution of the Philippines sets forth two national aspirations as absolute “must.” One, the promotion
of the general welfare and, two, the security of the state and its people.

B. Effects of Defense Expenditures

These are two effects of defense or war expenditures:
1. Opportunity cost – this pertains to what the state could have provided had the expenditures for national
defense been channeled to non-military (or civilian) expenditures. Stated in another way, the allocation of
public funds for military expenditures means denying the non-military of the access to such expenditures.
Thus, to the extent that public funds are spent on defense expenditures, to that extent are the people denied the
opportunity to have more schools, roads and bridges, hospitals and health centers, agricultural services etc. the
crucial issue of national defense expenditures boils down to whether the government should spend more on
guns or on butter – that is, whether limited funds should be used to kill or to feed people.
2. Fiscal effects – There are also some beneficent effects of defense expenditures which are not easily understood
by the layman. First, defense expenditures generate opportunities. The officers and enlisted men whose duty is
to defend the country and maintain peace and order are government employees. As such, they and their
immediate dependents are direct beneficiaries of defense expenditures. Also, since the bulk of these
expenditures goes to the compensation, pension, gratuities, living allowances and insurance premiums of the
officers and enlisted men, to that extent defense expenditures have a redistributive effect. But, it may be asked
would it must be better for the government to attack the chronic problem of unemployment more directly by
channeling more of its budget to non-military uses?

GENERAL GOVERNMENT EXPENDITURES

As stated earlier, general government expenditures from FY 1955 to FY 1970 ranked fourth, accounting for
some 11.5 percent of the expenditures of the national government. this items of expenditures averaged some 218.5
million annually for the same period, rising at an annual average rate of 11.7 percent (See Table 1).
Table 15 shows the rising trend of general government expenditures. Except for FY 1956, (where they dropped
slightly), general government outlays have consistently increased. In FY 1955, they amounted to 94.2 million, rising to
10.6.2 million in FY 1958, these further went up to 129.5 million in FY 1960. In FY 1962, these further went up to
165.2 million in FY 1963, to 188.7 million; and in FY1964, to 242.8 million. In FY 1965, THESE ROSE TO 284.0
million and in FY 1970 to 494.4 million. For FY 1971, these are estimated at 462.4 million and for FY 1972, at 521.6
million. Thus, for the period under review, general government expenditures have increased almost six-fold.
The same table shows the breakdown of general government expenditures as follows: 64.3 percent for general
government proper, 16.2 percent for legislative services, 14.4 percent for administration of justice, and 5.1 percent for
pension and gratuities.
Employment in the Government – As June 30, 1970, there were some 531,615 employees in the government
services if to this figure would be added the officers and men of the Armed Forces of the Philippines, then the
conclusion could be drawn that the government is indeed the single most important employment agency in the country
today.
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 TABLE 15
Expenditure of the National Government on General Government,
All Funds Combined
(In Thousand Pesos)
General Legislative Administration Pensions and
Year Total
Government Services of Justice Gratuities
1955 94,160 50,799 7,942 10,096 25,423
1956 73,083 49,350 8,418 10,938 4,377
1957 84,608 58,357 8,913 12,846 4,492
1958 106,199 78,521 10,663 13,569 3,446
1959 101,172 69,803 13,272 14,532 3,585
1960 129,511 79,333 17,031 15,427 17,720
1961 130,188 84,943 16,673 19,072 9,500
1962 188,684 112,485 28,660 21,626 2,461
1963 242,798 112,199 40,362 25,977 10,146
1964 284,049 153,112 52,041 33,722 3,923
1965 319,964 186,195 55,227 40,066 2,561
1966 319,815 204,720 54,300 47,656 13,288
1967 355,784 207,664 45,095 50,753 16,303
1968 405,509 231,657 51,651 54,060 18,416
1969 494,429 251,232 69,803 63,771 20,703
1970 462,379 318,453 85,657 67,982 22,338
1971a 521,521 288,890 56,676 94,969 21,844
1972a 355,784 337,046 56,679 107,000 20,896
Average rate 11.7 13.0 16.0 13.6 (15.6)
of growth
(1955-1970)
Average 218,450 140,551 35,351 31,382 11,168
annual
expenditure
(1955-1970)
Percent 100.0 64.3 16.2 14.4 5.1
distribution
a
Budget Estimates.
Source: Budget of the National Government for the fiscal year 1957-1972.

To this should be added the employees of the provincial, municipal and city government and public school
teachers. This latter group of employees would present almost 60 percent of all employees in the government service,
the must numerous in this group being the public school teachers.
Table 16 shows the absolute and percentage distribution of government employees by the type and branch of
service for FY 1968-1970. This table sufficiently shows the composition of government and employee’s branch for
service (levels of government and teachers) and work category that is whether they are holding classified or
unclassified positions, and whether employed as permanent, provisional or temporary.

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 TABLE 16
Percent to Total Number of Government Employees by Branch and
By Type of Service, FY 1968-1970.
Classified Unclassified
Branch of service Total Percent Permanent Provisional Temporary Permanent Temporary
Number Percent Number Percent Number Percent Number Percent Number Percent
1968 481,320 100.0 132,027 48.0 123,294 25.6 34,944 7.3 37,896 7.9 54,159 11.3
National 224,651 100.0 96,146 42.8 34,990 15.6 20,695 9.2 26,023 11.6 46,797 20.8
Provincial 18,832 100.0 9,531 50.6 4,053 21.5 1,665 8.9 2,434 12.9 1,145 6.1
Municipal 34,276 100.0 9196 26.8 12,066 35.2 6,643 19.4 2,733 8.0 3,638 10.6
City 30,906 100.0 14,419 46.7 7,487 24.2 1,325 4.3 5,404 17.5 2,271 7.3
Teachers 172,655 100.0 101,735 58.9 64,698 37.5 4,612 2.7 1,302 0.8 308 0.2

1969 516,557 100.0 258,210 50.0 133,605 25.9 32,810 6.4 35,931 7.0 56,001 10.8
National 221,915 100.0 96,711 43.4 37,187 16.8 20,086 6.1 23,471 10.6 44,800 20.2
provincial 21,877 100.0 10,377 47.4 5,238 23.9 1,486 6.8 1,939 8.9 2,834 13.0
Municipal 35,730 100.0 10,463 29.3 12,859 36.0 6,076 17.0 2,676 7.5 3,656 10.2
City 34,249 100.0 14,441 42.2 9,795 28.6 1,491 4.4 5,568 16.3 2,954 8.6
Teachers 202,786 100.0 126,558 62.4 68,526 33.8 3,668 1.8 2,227 1.1 1,757 0.9

1970 531,615 100.0 270,577 50.9 126,034 23.7 50,823 9.6 37,042 7.0 46,583 8.8
National 226,957 100.0 101,251 44.6 34,933 15.4 29,419 13.0 24,949 11.0 36,405 16.0
provincial 20,208 100.0 9,551 47.3 3,918 19.4 1,910 9.5 1,947 9.6 2,882 14.3
Municipal 35,693 100.0 10,568 29.6 11,473 32.1 7,267 20.4 2,646 7.4 3,739 10.5
City 34,596 100.0 14,885 43.0 9,062 26.2 1,720 5.0 6,056 17.5 2,867 8.3
Teachers 213,615 100.0 134,322 62.9 66,648 31.2 10,507 4.9 1,448 0.7 690 0.3
*Teaching force of 9,7 and 12 state colleges and universities in FY 1964,1966 and 1967-1968, respectively.
Source: Annual Reports of the Civil Service Commission for the fiscal year 1964-1970.

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