TAIPEI (CNA) — Taiwan’s Cabinet passed a NT$246.7 billion (US$8.04 billion) special budget Thursday to be spent on the purchase of a new fleet of F-16 fighter jets from the United States amid the rising tensions across the Taiwan Strait.
The budget was adopted after the Legislative Yuan first passed a bill Tuesday authorizing the Cabinet to allocate a special budget of no more than NT$250 billion to cover funding for the 66 advanced aircraft in a purchase plan that will stretch until Dec. 31, 2026.
Following the special budget’s passage, Premier Su Tseng-chang (蘇貞昌) said the purchase is of vital importance for Taiwan as it will largely boost the nation’s defense capabilities.
The purchase will also boost Taiwan’s defense industry if the U.S. agrees to transfer some of the key technologies for the fighter jets to Taiwan, he said.
Su praised the U.S. for granting the possible sale of F-16 C/D Block 70 fighter jets, known as the F-16V, to Taiwan on Aug. 20, a move that shows “better than ever” bilateral ties since the two ended official diplomatic relations 40 years ago.
The premier hoped that the special budget will be passed by lawmakers soon.
Lee Kou-hsing (李國興), a section chief of the Directorate General of Budget, Accounting and Statistics (DGBAS) of the Executive Yuan, said that since the 2020 fiscal year government budget has already been sent to the Legislative Yuan pending its approval, the government had to come up with the special budget to cover the funding for the F-16 purchase.
He said the special budget will be covered by public debt as well as revenue from the previous fiscal year.
The purchase would otherwise create too heavy a financial burden for the country, he went on, explaining that the deal is estimated to raise the nation’s outstanding public debt to NT$7 trillion, which is still NT$1.6 trillion short of the government’s debt ceiling.
Taiwan’s military said a week earlier that it had recently received a draft letter of offer and acceptance (LOA) — a contract between the U.S. military and a foreign military sale customer — detailing its offer to sell the fighters to Taiwan.
The military is now confirming the details of the draft LOA before sending it back to the U.S. side.
The U.S. side will later send the official version of the LOA to Taiwan to be signed and returned to Washington, which will officially seal the deal, it added.
The military has estimated that the U.S. will take two years to make preparations before officially beginning mass production of the jets.
Taiwan is scheduled to take delivery of all 66 fighter jets between 2023 and 2026, it noted.
The last time the U.S. sold Taiwan fighter jets was in 1992, when then-President George H.W. Bush announced the sale of 150 F-16 A/B jets.
Since then, the jets have served as the backbone of the nation’s air force.
By Ku Chuan and Joseph Yeh