The acquisition of P18.9 billion fighter jets has been hindered by disagreements between the Philippines and South Korean aircraft maker Korea Aerospace Industries Ltd, a defense official said.
Defense Undersecretary Fernando Manalo said in a press briefing on Monday (Dec. 3), that both sides are still “trying to hurdle major issues.”
“KAI is asking for a 52 percent initial payment but the defense department can only pay 15 percent under the law,” Manalo said.
The decision will be up to President Benigno Aquino III if DND can agree with KAI’s terms, Manalo said.
The “turnaround time” or the period required for KAI to deliver spare parts under warranty has also been another issue, Manalo added.
The defense department requires the supplier to deliver spare parts within 30 to 45 days, while KAI wants it delivered within a 180-day period.
The DND targets to determine by yearend if it will go on with the acquisition from the Korean aircraft maker.
“We are already preparing our firm position and then we are going to submit it to KAI for them to determine whether that is acceptable,” Manalo said.
“The country has long been in need of fighter jet capability, which takes at least five years to develop,” he added.
Negotiations between the Philippines and KAI started early this year to procure 12 FA-50 lead-in fighter jets, seen to boost the military’s modernization. Some of the jets are targeted to be delivered before Aquino’s term ends in 2016.
In the same briefing, Patrick Velez, vice chairman of the defense department’s bids and awards committee, also bared plans to buy a shore-based missile system.
It will be given to the Army and has a P6.5 billion budget.
The acquisition is still in the planning stage and will be acquired through “limited source bidding,” a process where selected companies are invited to submit bids.
The Army will also be given 744 units of light rocket launchers worth P408 million. The Air Force, meanwhile, will be given three air surveillance radars worth P825.5 million. Two long-range patrol aircraft worth P5.976 million are also being acquired for the PAF.
Bases in Palawan, Batangas and Zamboanga will be developed at a cost of P187.43 million to support these air assets.
