Lorenzana ‘Almost Certain’ Australia Loan for Ships Exempted from Duterte Memo

23 Oktober 2019

A scale model of Austal’s offshore patrol vessel for the Philippine Navy (photo : Inquirer)

MANILA, Philippines — Defense Secretary Delfin Lorenzana has expressed confidence that the procurement of  offshore patrol vessels (OPV) from Australia for the Philippine Navy would be excluded from the government’s foreign loan ban.

President Rodrigo Duterte earlier ordered all government agencies to suspend all negotiations for loans and grants from 18 countries, including Australia, which supported the United Nations resolution that sought a review of his war on illegal drugs.

“I still have to make the formal request, but I am almost certain that he will approve it,” Lorenzana told reporters Thursday night on the sidelines of Australia’s exhibit on the history of Philippine-Australia defense ties.

A scale model of the OPV being proposed by Australian shipbuilder Austal was on display at the exhibit.

The defense establishment is currently in talks with the Australian government for a soft loan to finance the purchase of six OPVs for the Philippine Navy. It would be built at Austal’s Cebu shipyard.

The P30 billion OPV acquisition project is part of the Horizon 2 of the Armed Forces of the Philippines modernization program. The ships are expected to boost the Navy’s patrol duties, especially in the West Philippine Sea.

“It’s very possible, almost sure that the OPVs of the Navy will be built by Austal in Balamban, Cebu. It’s one plus again for cooperation. It will create more jobs for Filipinos. It’s good for both sides,” Lorenzana said.

The defense chief said he spoke to Duterte about the exemption during their recent trip to Russia.

“He just nodded. ‘Okay’,” he said.

“The [ships are] not being built outside (of the country). One of his marching orders at the start of his presidency was to develop our capability in-country,” he added.

Lorenzana said he was looking forward to the signing of the contract, but said there was only a “60 percent” chance that it could happen within the year.

The start of delivery is expected 18 months after the deal is formalized.

(Inquirer)