Her proposal to increase the 2019 defence budget by 5.6 per cent to 346 billion Tw dollars (USD 11.3 billion) will go before parliament following the summer recess.
It has staged a string of air and naval exercises, including a live-fire drill in the Taiwan Strait in April, which Chinese officials said were aimed at Taiwan's "independence forces".
"There have been many changes in international and regional situations and our national security is faced with more obvious and complicated threats," Tsai said today as she attended a naval ceremony and announced the defence spending plan.
Up 18.3 billion Tw dollars from the previous year, it would account for 2.16 per cent of the GDP.
The 2018 defence budget was only up 1.9 per cent on the year before, at 327.7 billion Tw dollars.
Around a fifth of the 2019 budget would be spent on "defence self-sufficiency" projects, Tsai said.
Taiwan wants to beef up its homegrown defence systems, particularly its submarines.
Last year, Taiwan also announced its bid to create a new generation of locally built jet trainers by 2026.
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