President Lai Ching-te (賴清德) announced Wednesday, September 2, that Taiwan’s defense budget for next year will exceed NT$1 trillion (US$31.45 billion) for the first time. 

Speaking at a ceremony ahead of Armed Forces Day on Thursday, September 3, Lai said the 2027 defense allocation will be NT$ 1.1225 trillion, more than 3% of GDP. Lai said this shows Taiwan’s resolve to defend itself. He said: “Therefore, next year’s overall defense budget will exceed 1 trillion yuan for the first time, reaching 1.1225 trillion yuan, continuing to exceed 3% of GDP. We want to show the international community Taiwan’s determination to strengthen its self-defense capabilities.”

President Lai pledged continued investment in domestic defense industries, which include AI and unmanned vehicles. Lai said these steps will boost Taiwan’s ability to handle future challenges. He also highlighted efforts to improve military morale. Service members will get a 4% pay raise in January, marking the fifth increase in a decade. 

More than 640 brands are offering discounts to military personnel, and six airlines provide priority boarding. Lai said national strength depends on unity. The budget follows recent security moves. Lawmakers approved a major drone program last week, and air-defense upgrades are also underway.