The government has allotted 10.05 billion Singapore dollars (6.2 billion US) for defence in the financial year to March 2007, up 8.5 percent from the previous year, Prime Minister Lee Hsien Loon said Friday during his budget speech to parliament.

Nearly all of the defence budget is allocated for equipment purchases, for maintenance, and for the salaries of soldiers in its conscription-based armed forces, the budget statement said.

Lee, who is also the finance minister, unveiled a national budget Friday totalling 41.21 billion dollars.

Singapore, a tiny Southeast Asian city-state, spends about six percent of gross domestic product on national defence.

In December, the defence ministry signed a contract to buy 12 US-made Boeing F-15 fighter jets for delivery in 2008-2009. The contract also provides an option for the purchase of another eight aircraft in the future.

The ministry declined to reveal the cost of the deal but industry analysts have said it would be worth about one billion US dollars.

Singapore's air force transport planes and naval ships played a key role in humanitarian relief operations after the deadly tsunami that hit Indian Ocean communities in December 2004.