Setback and Replanning

The expanded military expansion program isn't taken well by almost everyone. As it turned out the other departments' budgets will be slashed by varying degrees based on how important the department is to the present state of affairs.

On the budget proposal, some departments got massive budget cuts like the newly created Kagawaran ng Pagkalinga sa Kalikasan. Once part of the Kagawaran ng Interyor, the renamed Department of the Interior, will have their budget slashed to the point where they will only have the budget to pay their employees.

Enforcement of environmental laws will be extremely difficult if the budget pushes through, thus the department head is fiercely arguing against the budget cut.

The Kagawaran ng Yamang Tubig got the same treatment. They argued that all of their projects will have to be put on-hold. Expansion plans will get delayed, which may affect supply capacity across the country especially in the cities.

The Kagawaran ng Edukasyon and Kagawaran ng Pagsasaka aren't spared potential budget cuts, not as large as the other departments, but will still have a negative effect on their annual programs.

Daily meals for students will have to be downsized. Routine maintenance for schools will have to be lessened or be prioritized only for major to critical repairs. Salary increases for teachers may have to be delayed for 5 years.

For the agriculture department, this will mean less subsidies for farmers as well as delayed support for acquiring motorized equipment to increase the nation's agricultural productivity.

Only two departments aside from the Defense Department have not only been spared from potential cuts but got hefty increases, the Kagawaran ng Pagawaing Bayan and Kagawaran ng Industriya.

The military recommended the increase in order to fast-track infrastructure projects the military deems important like inter-state projects such as the Luzon and Mindanao railways, and the Federal motorways.

As well as give subsidies and assistance for expansion projects across the country's heavy industry sector.

----------

Even the windfall of funding, the industrial sector raised concerns with regards to the feasibility of the military's project.

The first to report is the maritime sector. They reported that only two of the current privately owned dockyards have the capacity to build the required specifications for the aircraft carriers.

Furthermore, the country only has 6 dockyards capable of producing the ships the navy needs, including the two already mentioned.

2 of the smaller yards, the Felipe Salvador Shipyard in Davao and Puerto Ishmael in Zamboanga, had already been contracted by the navy for constructing and maintaining the destroyers and submarines from the first naval expansion program so adding more to the queue will not be a problem.

The other dockyards however already have orders that will keep them occupied for 3-5 years, especially the two largest ones the Astillero Naval ng Bacoor located in Sangley Peninsula and the Barador Cebuano located in Cebu.

These two premier shipyards are responsible for constructing some of the finest ocean liners in the country like the Mayon and Apo and large cargo liners like the Kamahalan. 

However, they reported that they could only put the navy's orders on queue. They could not give priority for the navy as it will severely affect their standing with their customers. Furthermore, all their contracts have specific timelines they are obliged to fulfill.

Not to mention, their contracts also includes routine maintenance of their customer's ships.

But they assured, that once construction start for the navy's ships, that they will put the utmost effort in ensuring the ships are of the best quality and completed on the soonest time possible given the government assist in getting the expertise for building the carriers.

They don't have a problem building the destroyers or submarines as they had done it for the government at least once, but aircraft carriers are different.

As for the country's mining and mineral processing industries

The country's current mining output cannot meet the projected demand caused by the military's program. The country will need to import huge amounts of raw materials for at least five years as the mining sector expands capacity and prospect new mining sites, which is a problem on itself as some of the potential mining sites sit on ancestral lands and are heavily regulated by their state governments.

The mineral processing sector, like the steel industry, also do not have the capacity, but unlike the mining industry, they can expand production much faster.

However, their concern is with their inputs as they currently rely mostly on the local mining sector to supply their needs and only use imports to augment their supply.

If the military proceeds with its project, they estimate that they need to double or probably triple raw material imports once they expand their production should the mining sector fail to expand on time.

One of their conditions for expansion, however, is that the government will have to give enough support. While they did have plans to expand due to foreseen demand as the world slowly recovers from the great depression, it did not include doubling of capacity in just 3 years.

The same problem is also present in the construction industry. They get almost all their inputs from local companies, and they expect that they will have to compete for resources for a year or 2 before supply eventually catches up to demand, which will drive up construction costs.

The manufacturing industry meanwhile had mixed opinions with only the arms industry having a positive outlook as not only will they get a lot of funding and subsidies to research and manufacture military hardware, but they will also have guaranteed sales for the next few years owing to the army and air force.

The rest in the industry criticized the plan as it called for the majority of the consumer goods factories to augment the capacity of the arms industry to meet the army and air force's deadlines. Basically, telling them to switch a part of their operations for wartime production in peacetime.

----------

With pushbacks almost across the board, the military and finance departments had no choice but to revisit the plan.

Due to the conflicts with the budget proposal, they went for another plan that called to take loans from foreign banks and most likely have foreign countries construct some of the navy's required ships, including all carriers.

This will help alleviate potential material shortage as the ships and submarines use a lot of materials, especially steel.

Construction can start as soon as possible as well, especially if they contract with major industrial powers, with the exception of Japan, the British, the French, and Dutch as the military is wary of these countries.

Their main contenders being either the Americans, or the Soviets.

For tanks, they opted split their sources, half of the tank fleet will be the Victoria tanks, the design based off of the British Vickers Mk2. This affected relations with the British negatively as the design was stolen through espionage.

The other half consisting of ordering modified BT-5s from the Soviets, by trading gold and agricultural products for the tanks and the design.

The artillery, the 120mm PH-120 Howitzers are to be produced locally along with ammunition.

As the aircraft is envisioned to be a major pillar in the country's defense, the military highly recommended that the aircraft be researched, developed, and produced in the country with some specifications being highly confidential.

With the new plan in place, the government didn't need to implement drastic budget cuts on a number of executive departments, alleviating the concerns of the other departments, and the public.

As for the heavy industry sector, although the government didn't need to pressure the sector to expand, they still allotted funds to assist in the sector's expansion albeit with a more flexible time frame.

Meanwhile, the other projects from the previous version of the military expansion program proceeded as previously planned like the construction of airbases, and submarine bases.