Key Points
—Peru’s foreign and defence ministers resigned on April 22 after accusing interim president José María Balcázar of lying to the country about whether the US$3.5 billion F-16 contract had been signed.
—The first contract phase — twelve F-16 Block 70 aircraft worth US$1.54 billion — had already been signed at Base Aérea Las Palmas on April 20 in a reserved ceremony that Balcázar said was not happening.
—Peru’s finance ministry transferred the first payment of US$462 million on April 23 against Balcázar’s stated position. Lockheed Martin confirmed the acquisition the same afternoon.
—US ambassador Bernie Navarro warned on X that Washington would use “every tool available” to protect American interests — the most direct US diplomatic pressure on Peru in years.
An 83-year-old interim president tried to stop Peru’s biggest-ever defence contract. His own ministers signed it anyway, his finance ministry paid for it, Congress confirmed the transfer, and the US ambassador publicly backed the deal. Peru now has, in effect, two governments — and the one with money just closed.
The Rio Times, the Latin American financial news outlet, reports that the Peru F-16 crisis has escalated from a postponed signing ceremony into a full institutional rupture, with the interim president isolated inside his own cabinet and publicly contradicted by his foreign minister, defence minister, prime minister, finance minister, and the US embassy in Lima.
The US$3.5 billion contract with Lockheed Martin for 24 F-16 Block 70 aircraft was approved under former president José Jerí in February 2026. Its financing was locked into two legislated debt laws — 7.58 billion soles authorised in the 2025 public-sector borrowing law and 5.7 billion soles authorised in the 2026 budget.
According to former defence minister Carlos Díaz Dañino, Balcázar himself signed Decreto Supremo Nr. 01 in March that formally authorised the funding mechanism. The defence ministry has said so publicly; the presidency has not directly denied it.
The week the Peru F-16 crisis became public
The timeline matters. On Friday April 17, Balcázar announced on television that Peru would not sign the F-16 contract and that the next government, due to take office on July 28, should make the decision. The signing ceremony scheduled for that same day was cancelled.
On Monday April 20, while Balcázar was repeating the postponement line in radio interviews, the Peruvian Air Force and Lockheed Martin signed the first-phase contract in a reserved ceremony at Base Aérea Las Palmas. Defence minister Carlos Díaz had authorised the signing.
On Tuesday April 21, Balcázar insisted in multiple interviews that no contract had been signed. Foreign minister Hugo de Zela and defence minister Díaz had been in the room for the signing.
On Wednesday April 22, US ambassador Bernie Navarro met with prime minister Luis Arroyo at a breakfast in Lima. Hours later, Navarro posted a warning on X that Washington would use “every tool available to protect and promote the prosperity and security of our country and the region” if Peru negotiated in bad faith.
That same afternoon, De Zela and Díaz resigned. In his resignation letter, Díaz said he “fundamentally disagreed” with the strategic direction being taken. De Zela told local radio that the president had lied to the country.
On Thursday April 23, Peru’s Ministry of Economy and Finance transferred the first payment of US$462 million to Lockheed Martin. Lockheed Martin executive vice president Mike Shoemaker confirmed the acquisition in a company statement that same afternoon.
Why “two governments” is the right frame
The Lima daily La República published the starkest summary this week: Peru has two governments. One is led by Balcázar from the presidential palace. The other is led by prime minister Luis Arroyo, a retired army general, and includes defence minister Díaz, foreign minister De Zela, and — crucially — finance minister Rodolfo Acuña Namihas.
Acuña is the one who made Thursday’s payment possible. A former vice-minister of defence resources between 2022 and 2024, he controls the ministry that physically disburses funds. The fact that the transfer to Lockheed Martin went through is the clearest institutional signal that Arroyo’s side of the government holds the operational levers.
Congress also confirmed the transfer, effectively endorsing the cabinet’s position over the presidency’s. That is extraordinary in a country where, as the Rio Times analysis of Peru’s political instability documented, Congress has been the instrument through which presidents are removed, not the instrument through which they are overruled.
What was actually signed, and what it includes
The April 20 contract covers the first phase of the F-16 programme. It includes 12 aircraft — 10 F-16C single-seaters and 2 F-16D twin-seaters — for US$1.54 billion, plus US$460 million for logistical support, training, documentation, a flight simulator, and an initial weapons package.
The deal bundles in a Boeing KC-135R Stratotanker refuelling aircraft free of charge, valued between US$40 and US$50 million. It also includes an Industrial and Social Compensation offset programme covering technology transfers, co-production of medium-range “Vulture” UAV drones, and certification of Peru’s national aircraft maintenance company SEMAN for F-16 and KC-130 servicing.
First aircraft delivery is scheduled for 2029, with full fleet delivery by 2030. Lockheed Martin beat Saab’s Gripen from Sweden and Dassault’s Rafale from France for the contract.
Phase two, covering the remaining 12 aircraft for US$1.5 billion, has its financing authorised by the 2026 budget but has not yet been formally signed.
The US ambassador’s role in the Peru F-16 crisis
Ambassador Bernie Navarro, a Cuban-origin businessman appointed under the Trump administration, has played a role in the F-16 episode that is unusually public for a US envoy in Lima. His April 22 post on X — warning of “every tool available” — was not a private démarche. It was a visible signal to Peruvian ministers, Peruvian media, and the Peruvian public.
Navarro went further on April 23. The US embassy in Lima issued a statement saying that a “technical signing took place on April 20, 2026, with full knowledge of the highest levels of the Peruvian government,” and that Washington learned of the initial postponement “through national radio.”
The subtext of that statement is not subtle. The US government is saying, on the record, that Balcázar‘s public postponement did not reflect what the Peruvian state had actually committed to. That is a direct challenge to an interim head of state by a foreign power — and the Peruvian cabinet has aligned with the foreign power rather than with its own president.
What to watch next in the Peru F-16 crisis
Three things now matter. The first is whether Congress moves to impeach Balcázar. He is Peru’s eighth president in a decade, and impeachment proceedings against sitting presidents have become a routine part of the constitutional system.
Calls for his removal began in Congress on April 23 itself.
The second is the June 2026 runoff election. A new president takes office on July 28. The F-16 programme is now effectively beyond that transition point, given the binding first-phase contract, but phase two still needs a signing that the next president will be politically asked to endorse or reject.
The third is the market and sovereign-credit impact. Peru’s economy, as the Rio Times 2026 elections guide documented, has historically absorbed political shocks without flinching.
This one is different: it involves US$3.5 billion in sovereign-backed debt, a visible US diplomatic intervention, and a public split between the president and the finance ministry that actually pays Peru’s bills. Markets typically reprice when institutional predictability collapses at the level of who actually controls disbursements.
For investors reading Peru from New York, London, or Frankfurt, the message is sharper than any single transaction. The country’s institutional arrangement has mutated. A sitting president can be publicly contradicted, operationally bypassed, and diplomatically overruled by his own cabinet acting in concert with a foreign embassy.
Whether that is stability or crisis depends on which side of the signing table you were on.
Related coverage: How Peru’s interim president stopped the F-16 signing on April 17 • Peru’s presidents keep falling, its economy doesn’t • Peru elections 2026 guide