Teodoro: PH seeking offers in procurement of 40 multi-role fighter jets

The Philippines has started soliciting offers as it plans to procure 40 new multi-role fighter aircraft to boost its territorial defense, Defense Secretary Gilberto Teodoro said Thursday.

Bidders must submit a proposed financing package where payment can be spread out, Teodoro told a congressional budget hearing.

“This is because also we have decided that acquisitions shall be for capabilities that can make a real difference,” Teodoro said.

“Just to get, for example, multi-role fighters, one dozen of those will not make any difference at all. So, the minimum for us will be 36 aircraft, which only a squadron and a half. But that would be credible. Plus four in reserve because 80 percent in service rate is a good standard,” he added.

He did not specify which models the Philippines was seeking to procure, or potential bidders. It was not immediately clear the time frame for the planned procurement.

The Philippines, a defense ally of the United States of America, is seeking to modernize and beef up its military inventory and its air force currently has few fighter jets.

The military chief has said the country needed "faster and more lethal" multi-role jet fighters on top of its South Korean FA-50s.

The government is looking at reasonable financing schemes to fund its modernization program, including tapping syndicated loans from private lenders, Teodoro said.

He pointed out that the General Appropriations Act budget alone would not be enough to fund military modernization projects.

“Until we find those kinds of creative financing, we have to work within the confines of the revised AFP modernization program,” he said.

“But then we're closely coordinating with your honors regarding whatever financial schemes we can get, because it's really important that everybody pitches in for national sovereignty and territorial integrity,” he added.

Teodoro said he coordinated with the Bankers Association of the Philippines, Bangko Sentral ng Pilipinas (BSP), and Department of Finance (DOF) to allow his agency to seek creative financing methods that will be under the Multi-Year Contractual Authority (MYCA) for “big ticket items.”

“To secure syndicated loans for it, divide the amortizations to engage a term of the loan to a long period as possible given the useful life of whatever equipment is going to be purchased and to chop up the amounts into digestible amortizations that we can afford,” he said.

However, there has been no commitment yet from the BSP and DOF about the matter.

According to Teodoro, the DND may also need legislation to support the move because existing law in external loans provides that any defense acquisition is limited to only $300 million.

President Ferdinand Marcos Jr has approved "Re-Horizon 3," an acquisition plan for new military weaponry and equipment worth 1.89 trillion pesos ($33.64 billion) to boost defenses. — Reuters with Joviland Rita/RSJ, GMA Integrated News