The allocation of funds for three big-ticket modernization projects for the military has been delayed due to the government’s move to focus on the COVID-19 pandemic response, the country’s defense chief said on Thursday.
Defense Secretary Delfin Lorenzana, in an online press briefing, said this when asked if there is a chance of any modernization contracts being signed before the end of President Rodrigo R. Duterte’s term next year.
“These are delayed as the funding meant for this was used in the COVID-19 response,” he added.
Lorenzana said these include the signing of the Philippine Navy’s corvette (small warship) acquisition program, which provides for the acquisition and construction of South Korean shipbuilder Hyundai Heavy Industries of two modern corvettes equipped with missiles and other high-tech weapons and sensors.
Also set for signing are the contracts for the acquisition of six offshore patrol vessels supposed to be built by Australian defense manufacturer Austal, which has a shipyard in Balamban, Cebu, and the multirole fighter project of the Philippine Air Force.
“So these are the big-ticket items now waiting for funding,” Lorenzana said.
He expressed hope that funds will be provided for these projects as these are all under the so-called “multi-year financing” and only requires down payment to push through and can be paid within a five- to-10-year period.
This payment procedure is also called soft financing and can be offered by the host governments of the manufacturers, Lorenzana said.
Meanwhile, it is up to the Department of Finance to consider whether it is amenable to this kind of financing scheme, he said.