Philippine Air Force Discussions and Updates

[koxinga]

It doesn't matter which MRF they select, because Philippines have a structural issue in buying.

Republic Act No. 7898 in 1995 set a $300 million limit on specific military modernization loans. So even if the seller wants to activate financing lik EXIM loans, they cannot do the deal. This has been the main reason why we don't see anything moving forward, despite multiple rounds of evaluation

They either have to have the full budget to pay for it using multi-year payments or they have to amend the law, which they are trying to do. For the MRF program, they have the money for the downpayment but would need financing if want to buy at those quantities.

PRESIDENTIAL DECREE NO. 415, (1974-03-19)

AUTHORIZING THE SECRETARY OF NATIONAL DEFENSE TO ENTER INTO DEFENSE CONTRACTS TO IMPLEMENT PROJECTS UNDER THE SELF-RELIANT DEFENSE PROGRAMS AND FOR OTHER PURPOSES

lawyerly.ph

SECTION 3. For the purpose of this Decree and any provision of law to the contrary notwithstanding, the President of the Philippines is hereby authorized in behalf of the Republic of the Philippines, to contract such loans, credits or indebtedness including supplier's credit, deferred payment arrangements upon such terms and conditions as maybe agreed upon with any local or foreign source or lender not exceeding Three hundred million United States dollars, or its equivalent in other foreign currencies at the exchange rate prevailing at the time of the contracting of the loans, credits, or indebtedness, suppliers credits and deferred payment arrangements and at terms of payment of not less than ten years

 

[Ananda]

Multi-Year payments can be tweek to multi year installment for credit line. That's what Indonesia did for years. What they change is to get multi-years budgeting. In sense they ask budget for one period allotment and use that in early period to secure financing and procurement contracts.

That's why in his first year of Presidency, Prabowo's administration conduct multiple contract, MoU, LoI to secure the deals and credit line. My understanding from Pinoy forums and media, Marcos Administration want to do similar thing with what Indonesia done. In such having multiple years budget being sum-up to increase credit line allotment.

Either way there will be ceiling level that either administrations that limitted the amount of multi-years budget can be sum-up. Seems it is what Phillipines defense minister try to gather first.

 

[koxinga]

Multi-Year payments can be tweek to multi year installment for credit line. That's what Indonesia did for years. What they change is to get multi-years budgeting. In sense they ask budget for one period allotment and use that in early period to secure financing and procurement contracts.

Their multi-year payment is tied to government allocated (Dept. Budget & Mgmt) budget, not credit line. Even if it is, the cap of 300 million is on a per project level. They can't do what is being done in Indonesia. Hence there is zero movement on those large deals (MRF, submarines) despite of multiple visits or even offers for financing by the suppliers.

The main change they are trying to do is to remove that cap.