KUALA LUMPUR – Growing security developments in the region, including increased military activity on islands near Sabah, have underscored the need for Malaysia to further strengthen its defence capabilities, Prime Minister Datuk Seri Anwar Ibrahim said.
Anwar, who is also Finance Minister, said Malaysia requires additional defence allocations, which could range from hundreds of millions to billions of ringgit, to ensure the country has adequate assets and capabilities to respond to an increasingly complex security environment, Bernama reported.
He said the need for stronger defence preparedness must be viewed within the broader regional landscape, which has been shaped by shifting geopolitical dynamics, including heightened strategic competition between the United States and China.
Speaking at the closing of the Budget 2027 engagement session here today, Anwar said Malaysia needed an open discussion on its security requirements, including measures to enhance defence capabilities in Sabah.
“The government had increased defence allocations over the past two to three years in response to changes in the regional security environment.
“This is no longer an ordinary region. It is increasingly becoming a focal point of tensions between two major powers, the United States and China,” Anwar said.
He said Malaysia would continue maintaining constructive relations with both China and the United States to safeguard its national interests amid the evolving geopolitical situation.
Anwar also pointed to security developments in the southern Philippines, particularly the construction of military facilities on Balabac Island, which is located close to Sabah, as one of the factors highlighting the need for greater preparedness.
He said Balabac Island, the nearest island in the southern Philippines and about 20 minutes away from Malaysia’s Banggi Island, had been developed by the Philippine government with the United States as a major military base.
“As a close neighbour, and given the issue of the claim over Sabah, naturally we are somewhat concerned, although our bilateral relations with the Philippines are very good,” he said.
Anwar said the development reflected the importance of strengthening Sabah’s defence capabilities, although Malaysia did not have the resources to establish military and air bases on the same scale as those in Balabac.
“Do we have the capacity to develop military and air bases as sophisticated as those in Balabac? My answer is no.
“But at the very least, our basic defence capabilities must be strengthened,” he said.
He said Malaysia must continue enhancing its defence readiness in line with changes in the regional security environment, particularly developments that could have direct implications for national sovereignty and security.
The Budget 2027 engagement session was attended by Finance Minister II Datuk Seri Amir Hamzah Azizan, Deputy Finance Minister Liew Chin Tong, Treasury Secretary-General Tan Sri Johan Mahmood Merican and Bank Negara Malaysia Governor Datuk Seri Abdul Rasheed Ghaffour.
Also present were senior government officials, industry representatives, associations, non-governmental organisations, economists and academics.
Budget 2027 is scheduled to be tabled in Parliament on Oct 9. – August 18, 2026