As tensions rise in Southeast Asia, the US has approved a $5.58 billion deal to sell 20 F-16 Block 70/72 fighter jets to the Philippines. The US State Department announced this on April 1, 2025. The goal is to strengthen a key ally in the area.
The Defense Security Cooperation Agency told Congress that the deal, which includes advanced weapons and support systems, was legal. This is a big step toward modernizing the Philippine Air Force. At first glance, the transaction looks like a normal sale of military equipment to a partner to help with defense, especially in the disputed South China Sea.
However, a closer examination reveals an intriguing disparity: the total cost of an F-16, approximately $279 million, is nearly equal to that of the advanced F-35. This makes us contemplate value, economics, and how the global arms markets are changing. The Philippines wants to improve its old air force, which has been using a mix of old planes for decades.
This deal comes at a good time for them. The package comes with a strong arsenal that includes 16 single-seat F-16C models and 4 two-seat F-16D models, as well as 112 AIM-120C-8 Advanced Medium Range Air-to-Air Missiles, 40 AIM-9X Block II Sidewinders, 60 MK-82 500-pound bombs, 60 MK-84 2,000-pound bombs, and 36 Small Diameter Bombs.
It also offers high-tech features like the AN/APG-83 Active Electronically Scanned Array radar and Sniper targeting pods, which make these jets much stronger than anything Manila has flown before.
Philippine Air Force
The Korea Aerospace Industries FA-50PH, which is the Philippine Air Force’s current frontline combat aircraft, is a light attack jet with limited range and payload that can’t do the maritime deterrence missions the country needs more and more. So, this sale is a big step forward, but it comes at a high cost, which has led to questions about why a design that is decades old now costs as much as a fifth-generation stealth fighter.
To understand this paradox, it helps to look at the F-16 itself. Since its first flight in 1974, air forces around the world have relied on the Lockheed Martin F-16 Fighting Falcon as a mainstay. Since then, Lockheed Martin has built over 4,500 of these aircraft.
The newest version, the Block 70/72 variant, blends a proven airframe with innovative features. The AN/APG-83 radar, which is based on technology used in the F-35, is excellent at tracking targets at long ranges, and the Viper Shield electronic warfare suite makes it easier to survive against advanced threats.
China’s J-10C
The jet can do air superiority, ground strikes, and maritime patrols. Its top speed is over Mach 2, and its combat radius is over 500 miles. The Philippines, which has over 7,000 islands and faces internal and external threats, has many important missions. Russia’s Su-35 has better maneuverability and a larger payload, and China’s J-10C is a quick single-engine fighter with built-in stealth features.
However, the F-16 Block 70/72 maintains its competitiveness due to its reliability and compatibility with U.S. systems. Its high price, on the other hand, suggests that there is more going on than just new technology.
The global economy has been in a state of chaos since 2022, and the defense industry isn’t immune. The war in Ukraine messed up supply chains, which made raw materials like titanium and aluminum pricier; airplanes require these materials.
$5.58 Billion Price Tag
Because of the pandemic, there are still problems with semiconductors. These problems have affected older platforms like the F-16 more than the F-35, which has a more efficient, high-volume production line. Inflation peaked at over 9% in mid-2022 and has since dropped, but costs are still rising in the U.S.
The $5.58 billion price tag for the F-16 deal with the Philippines doesn’t just include the jets; it also includes engines, weapons, training, and spares. This all-around package brings the price per unit to $279 million.
The F-35A, on the other hand, is the stealth fighter’s least expensive version. Despite having over 1,000 orders around the world, its price has dropped to about $78 million per unit in recent U.S. contracts, thanks to economies of scale.
The Accountability Office will examine the F-35 program in 2024. The base price of the F-16, without any extras, is probably between $60 and $80 million. However, Manila’s deal blurs this line, making it appear significantly pricier.
Lockheed Martin, the main contractor based in Greenville, South Carolina, is crucial to this equation. As production of the F-35 ramps up, the company has kept the F-16 line going. This dual strategy keeps jobs and skills in the U.S. defense industrial base.
Lockheed Martin said in 2023 that Block 70/72 “extends the structural life of the aircraft by more than 50 percent beyond previous models.” “This is a selling point for countries like the Philippines that want their investment to last for a long time. But living so long costs something.
Exclusive Economic Zone
The upgrades—new electronics, longer airframe life, and integration with precision weapons—need a lot of engineering work, which drives up costs. Unlike the F-35, the Philippines’ order of only 20 jets prevents the spread of fixed costs over a larger fleet.
The fact suggests that Lockheed Martin is positioning the F-16 as a high-end product for specific markets. This is different from its historical role as an affordable workhorse in the sky. From Manila’s perspective, the deal is both necessary and limited. The Philippine Air Force got rid of its last dedicated fighter, the Northrop F-5, in 2005.
This incident left a hole that the FA-50PH, which was bought in 2014, could only partially fill. The FA-50 has a range of about 300 miles and a payload that is better for fighting insurgencies than scaring people away. This limitation makes it difficult for the FA-50PH to effectively patrol the vast Exclusive Economic Zone, where Manila and China dispute ownership of reefs they both claim.
U.S. Foreign Military Financing
With their longer range and heavier weapons, the F-16s promise to change that. Yet, because the country hasn’t used modern fighters much, it doesn’t have the infrastructure to buy a basic model and add to it over time.
According to Defense Secretary Gilberto Teodoro, to reporters in 2024, the military was looking for “flexible financing terms” for a $33.6 billion plan to buy 40 jets as part of the Horizon 3 modernization phase.
The $5.58 billion price tag for 20 F-16s, which was likely partially paid for by U.S. Foreign Military Financing, including a $500 million boost promised by Secretary of Defense Lloyd Austin in 2024, is still putting a strain on Manila’s budget and is drawing criticism in the Philippines for putting defense ahead of poverty and infrastructure.
The deal is important for more than just the economy. China claims almost the whole South China Sea, even though an international court ruled against it in 2016. This has led to more and more fighting between the Philippines and China in this area.
Russia’s Su-35 fighter
Conflicts like the one in June 2024, when Chinese coast guard ships hit Philippine boats, show how weak Manila is. With their air-to-air missiles and precision bombs, the F-16s give the Philippines a real threat that can’t be ignored. This is in line with U.S. efforts to support allies in the Indo-Pacific.
Before the announcement, Defense Secretary Peter Hegseth promised to “re-establish deterrence” against “threats from the Communist Chinese.” The State Department said that the sale strengthens a “strategic partner,” which was a similar message.
Military ties between the US and the Philippines have gone up and down over the years. They were strong during the Cold War, strained after base closures in 1991, and then strengthened by the Visiting Forces Agreement in 1998 and the Enhanced Defense Cooperation Agreement in 2014. On top of that, this sale adds to joint exercises like Balikatan, where more than 5,000 troops trained together in 2022.
Still, the high price makes it easy to compare to global options. Russia’s Su-35 fighter, which is from the 4.5th generation, is faster and costs about $85 million per unit. However, Manila can’t work with Moscow politically.
The Chinese J-10C, which costs between $40 and $50 million, is a cheaper option, but Manila doesn’t trust Beijing, and the J-10C hasn’t been used for exports before. In 2021, the Philippines looked at Sweden’s Saab Gripen, a light fighter who costs between $60 and $80 million. However, the Philippines chose the F-16 instead because it could work with U.S. forces, according to an interview with a defense analyst in the Eurasian Times that year.
F-16s to the Philippines
The development of South Korea’s KF-21 Boramae continues, promising advanced features at a lower cost and a long wait for availability. The F-16 has an advantage because it has been flown by 25 countries before and works well with American systems, which is important for a treaty ally of the United States.
In the long term, the deal points to a bigger change in the market for fighter jets. If the F-16, which used to be the most affordable option, now costs a lot, what other options are there for countries that are short on cash? In the past, older F-16s, MiG-29s, and Mirage 2000s dominated the low-cost segment. But as production costs rise and fourth-generation designs reach the limits of their technology, this segment is losing ground.
The Gripen and KF-21 are modern, easy-to-use, and cheaper than the F-35, so they could meet this need. Next, the Pentagon is pushing for sixth-generation fighters and drones. Programs like the Next Generation Air Dominance suggest that traditional jets may soon have to give way to unmanned systems.
Despite its first flight almost fifty years ago, the F-16 remains useful for the time being. The F-16’s versatility and upgradeability ensure its relevance. The high cost isn’t just about inflation or upgrades—it’s also shaped by urgency and tight resources. This deal is tailored specifically to meet the Philippines’ unique defense needs.
It’s a small example of how economic pressures are reshaping global arms purchases. Selling 20 F-16s to the Philippines is more than a routine arms deal. It shows how old fighter designs now command new, higher price tags. It reflects the tension between strategic needs and economic limits.
Conclusion
The U.S. wants to support allies without flooding them with its priciest technology. This deal helps keep Lockheed Martin’s assembly lines running smoothly. It also strengthens a valuable U.S. partnership in the Indo-Pacific. For Filipino taxpayers, this purchase provides security—but at a significant cost.
The price tag could spark debate in a country already facing internal and external challenges. It proves the F-16 still has global appeal despite its age. But it also hints that the era of “affordable airpower” may be fading.
If the F-16 now costs almost as much as the F-35, something big is changing. Does this mean military aviation is entering a new, more expensive normal? This question matters not only for the Philippines but for defense markets worldwide. What happens next could shape future skies—and future spending priorities.
References
- Defense Security Cooperation Agency – https://www.dsca.mil
- Lockheed Martin F-16 Block 70/72 Overview—https://www.lockheedmartin.com/en-us/products/f-16.html
- Philippine Air Force Modernization (Horizon 3)—https://www.pna.gov.ph
- China-Philippines South China Sea Disputes – https://www.scmp.com
- U.S. Inflation & Defense Budget Impact—https://www.cbo.gov
- Saab Gripen Fighter Jet Specifications – https://www.saab.com/products/gripen
- EurAsian Times Analysis on F-16 vs Gripen—https://eurasiantimes.com
- U.S. Department of State, Foreign Military Sales —https://www.state.gov/bureaus-offices/under-secretary-for-arms-control-and-international-security-affairs/bureau-of-political-military-affairs/
