Defense budget for 2027 fails to live up to Anutin’s security policy

There appears to be a disconnect between the current Thai government’s stated security policy and what the defence budget allocations for fiscal year 2027 reveal.

Prime Minister Anutin Charnvirakul had announced in Parliament his security policy focused on new transboundary security threats. The actual defense budget plan for FY 2027, however, points to military measures designed to address conventional security challenges of the past rather than those of the future.

The budget bill, which is now under consideration by the House of Representatives, lowers the defense budget for FY 2027 by 0.47 per cent year on year — from 204.4 to 203.4 billion baht. Of the total, 54.8 per cent amounting to 111.3 billion baht is allocated for the salaries and welfare of troops and personnel in the armed forces.

Under the budget plan, the government allocates only 50.4 billion baht, or 24.8 per cent, of the total defense budget for new investment to boost the capacity of the armed forces, documents prepared by the Budget Bureau reveal.

Anutin had told Parliament in April, while declaring his newly elected government’s security policies, that his administration would promote border security and free the country from all forms of threats. Cross-border challenges would be addressed through cooperation with neighboring countries and countries in the region to ensure tranquility for Thai society, he had promised.

Security realities over the past year have been mostly dominated by border flare-ups with Cambodia that consumed billions of baht from the budget for military operation costs and compensation for losses incurred by Thai citizens living along the border.

The border conflict highlighted the growing importance of unmanned aerial systems, real-time intelligence, electronic warfare, secure communications, precision targeting and rapid inter-agency coordination.

Although the 2027 defence budget includes allocations for cybersecurity, satellite capabilities, information technology, space infrastructure, and defence research and development, together they make up just 0.5 per cent of the Ministry of Defence’s total budget of 203.3 billion baht.

The budget document examined by Thai PBS Worlddemonstrates investment in modern military platforms, particularly by the Air Force and the Navy, but the scale of investment remains modest relative to the overall defence budget and the rapidly evolving security environment.

Fighter jets in pipeline

Following the 2025 Thailand-Cambodia border conflict, the last two governments led by Anutin have been approving major procurements for the Air Force and the Navy since last year.

The Air Force signed a contract in August 2025 to procure four Gripen E/F fighter jets valued at 19.5 billion baht under the first phase of the “Peace Burapha 1” program.

The first Thai Gripen E/F aircraft has now entered the production line at SAAB’s facility in Linköping, Sweden, according to a media report.

The first phase of the procurement program runs from fiscal years 2025 to 2029, with deliveries scheduled to begin in 2029.

Funding for the Gripen programme appears in the Air Force’s list of multi-year contractual commitments, rather than as a wholly new investment item in the 2027 budget.

The Air Force plans to acquire four additional aircraft under the second phase in fiscal year 2028, as part of a long-term plan to have a full squadron of 12 Gripen E/F jets.

The new aircraft will replace ageing F-16 A/B fighters currently stationed at Wing 1 in Nakhon Ratchasima province. The fighter jets played crucial roles in airstrike operations during the July and December border skirmishes.

Hot debate over frigate

The Navy failed again to secure approval for its 17.5-billion-baht new frigate proposal in FY 2027 due to a budget crunch.

Having secured a 17.5-billion-baht budget to construct its first frigate in mid-2025, the Navy had sought funding for a second vessel in the current budget.

Security sources said that the Cabinet and the Budget Bureau decided to postpone the procurement to FY 2028, as the proposal for the second frigate was too close to the acquisition of the first frigate.

The government also needed to reallocate the earmarked funding to the central budget to tackle the economic fallout from the escalating conflict in the Middle East, the sources said.

Currently, the Thai Navy has only three frigates in its fleet. The newest frigate, “HTMS Bhumibol Adulyadej”, was commissioned in 2019, while the relatively aging “HTMS Taksin” and “HTMS Naresuan”, were commissioned in 1995.

Opposition member of Parliament Ekkarat Udomumnouy, who chairs the House of Representatives’ Military Affairs Committee, believes that postponing the procurement of the second frigate will create a structural inefficiency in the acquisition programme.

Beyond its impact on naval capability, extending the interval between the two ships could reduce economies of scale, increase lifecycle procurement costs, and ultimately diminish the overall value for money offered by the program, he said.

However, the first frigate project has faced criticism after unconfirmed information that the Navy has decided to pick South Korea’s Hanwha Ocean to build the warship.

Competing bids from five other shipbuilders, including Hyundai Heavy Industries of South Korea that proposed 40 per cent domestic construction, two Turkish shipbuilders and Spain’s Navantia, all of whom offered 100 per cent domestic construction, were reportedly unsuccessful.

Hanwha Ocean, formerly Daewoo Shipbuilding & Marine Engineering (DSME), had previously built “HTMS Bhumibol Adulyadej” for the Navy. In recent years, however, the company has come under criticism following engine problems experienced by the vessel, which reportedly required the replacement of its main engines after approximately a decade of service.

Defense Minister Adul Boonthamcharoen said that the procurement served the best interests of both the Royal Thai Navy and the country. The selection process should proceed in accordance with the terms of reference established by the Navy, he added.

Controversies dog submarines

The Navy’s projects are often under scrutiny due to the long delays and controversies involving the engine that bogged down the submarine program, with the Navy eventually settling for the Chinese S26 Yuan Class vessel.

The Navy had signed a contract with China Shipbuilding & Offshore International Co (CSOC) for the 13.9-billion-baht submarine project in May 2017. The sub was supposed to be delivered to the Navy by 2023 but got delayed amid an impasse over installation of the engine.

The CSOC could not procure the MTU 396 engine, as stipulated in the agreement, for the submarine due to a European embargo on sale of the engine to China after the Tiananmen bloody incident in 1989.

After prolonged negotiations, the Navy agreed for installation of the Chinese CHD 620 engine, bargaining for an extension of the warranty period from 2 to 8 years, plus 200 million baht in compensation for the delay and alteration in contract terms.

At present, the Chinese company has already completed 64 per cent of the warship, and the Thai military has paid 7.7 billion baht, or about 63 per cent of the total cost.

The shipbuilding work is expected to be completed by July next year and delivered to Thailand in the middle of January 2029, according to testimony by senior naval officials on June 25 to the House military committee.

The Navy has not sought a budget for the submarine project in FY 2027 but will need to pay the balance amount of 5.5 billion baht from FY 2028 onward, the officials said.

Meanwhile, construction of the submarine pier has run into problems as the contractor, Port and Marine Company, abandoned the project after doing 50 per cent of the work. The Navy is now looking for a new contractor to complete the construction before the arrival of the submarine in the next three years.

By Thai PBS World’s Political Desk