The Philippines is nearing a breakthrough in negotiations to buy fighter jets from Sweden after two decades of efforts to refresh its fleet.

The two governments are now ironing out the final terms of defense cooperation based on a memorandum of understanding signed in June and ratified in September, the Philippines’ Defense Department explained in a Feb. 16 news release.

The arrangement is key to Sweden’s participation in the Philippines’ multirole fighter jet program, the department said, and the governments are to ink a deal at a meeting next month.

Negotiations had stalled while the Philippine military finalized its new defense acquisition program, dubbed Horizon 3 — the last phase of the government’s massive push to modernize its armed forces. In January, President Ferdinand Marcos Jr. approved a 2 trillion peso (U.S. $35 billion) budget for the decade-long plan.

The Defense Department has not shared a specific list of assets and platforms it wants under the program, but Defense Secretary Gilberto Teodoro told reporters last month the budget will focus on building assets and capabilities to address threats to Philippine resources and vessels. Capabilities will focus on raising domain awareness; connectivity; maritime and aerial deterrence; command and control; communications; computer technology; and intelligence, surveillance, target acquisition and reconnaissance.

The military previously told Defense News most of its assets and platforms are deployed to the country’s western and northern borders.

Following the approval of Horizon 3, the department said it had changed its requirements for the fighter jet and had not disclosed the total number it planned to acquire, nor the price tag.

The Philippines retired its fleet of Northrop F-5 fighters in 2005, and in 2013 it spent 18.9 billion pesos for 12 FA-50 light attack aircraft from Korea Aerospace Industries as fighter jet negotiations continued.

While the government has not identified the final choice for the fighter jet, the Swedish firm Saab’s JAS 39 Gripen was reportedly among the top choice.

The country had its eyes set on Lockheed Martin’s F-16 Fighting Falcon in the 1990s, but economic troubles and a lack of prioritization stalled negotiations.

In 2021, the U.S. approved the sale of 10 F-16C Block 70/72 and two F-16D Block 70/72 aircraft in a $2.43 billion package. However, the Philippines has only earmarked $1.1 billion for the acquisition.

Sweden instead proposed the JAS 39 Gripen in 2022.

Saab has not participated in negotiations thus far, according to Andrew Wilkinson, the company’s Gripen campaign director. Speaking to Defense News during the Singapore Airshow this week, Wilkinson said Saab will join the discussions once the bilateral agreement is signed and after the Philippines reaches a decision on its preferred fighter jet.

“We are at the very first phase, but right now there is no official decision, no requests,” he added.

Previous negotiations were over the aircraft, but Saab officials said there is an array of systems to provide a “holistic defense solution,” like the GlobalEye airborne early warning and control plane that can provide long-range air, sea, and land surveillance in real time.

“We have ground radars, airborne radars, other types of sensors, and you can fuse all this information to provide one aviation awareness picture that you can distribute to the navy, to the army, even to the coast guard,” Anders Dahl, who leads Saab’s branch in the Philippines, told Defense News.

The company has a history in the region. In 2008, Saab signed a $309 million deal to supply aircraft and surveillance systems to the Royal Thai Armed Forces.