PH seeks dialogue with Russia to formally scrap chopper deal

FILE PHOTO: An Mi-17 helicopter is seen during the leak test at Kazan Helicopter Plant, a subsidiary of Russian Helicopters, in Kazan, Russia, on Aug. 24, 2020. (REUTERS/Alexey Nasyrov)

MANILA, Philippines —The Department of National Defense (DND) said it would seek a “diplomatic dialogue” with Russia as it moved to formalize the termination of the contract with Sovtechnoexport LLC for the procurement of 16 Mi-17 heavy-lift helicopters worth P12.7 billion.

“We are preparing to initiate a diplomatic dialogue with the Russian side regarding matters arising from the project’s cancellation,” DND spokesperson Arsenio Andolong said on Wednesday, without giving a timetable.

Former Defense Secretary Delfin Lorenzana earlier terminated the deal before the end of then President Rodrigo Duterte’s term on June 30, amid concerns that it may provoke sanctions from Washington following Russia’s invasion of Ukraine in late February.

The possible sanctions, under the Countering America’s Adversaries Through Sanctions Act, include a freeze on the Philippine government’s bank accounts abroad, said Lorenzana, who now heads the Bases Conversion and Development Authority.

“He (Lorenzana) started the process already by serving notice of our intention to cancel the contract. Now we have procedures to formalize it,” Andolong said.

‘Change in priorities’

The DND contract termination and review committee will undertake the proper processes and exercise due diligence in officially terminating the contract, the DND official said.

“This includes the issue of the down payment,” he said, referring to the P1.9 billion already advanced by the Philippine government in January, two months after the chopper contract was signed.

Andolong said the deal was canceled due to “changes in priorities necessitated by global political developments.”

The United States and its allies imposed wide-ranging sanctions on Moscow in the wake of its assault on Ukraine. They are aimed at cutting off Russia from the global financial system and choking off funds available to Moscow to finance the war.

Russian Embassy officials in Manila could not be reached for comment on Wednesday.

US offer

Philippine Ambassador to Washington Jose Romualdez recently told Agence France- Presse (AFP) the decision to cancel was triggered by “the Ukrainian war.”

Romualdez said Manila was wary of falling foul of a US law passed in 2017 that sanctions anyone doing business with Russia’s intelligence or defense sectors.

The United States was offering “alternative helicopters to meet our needs,” he added.

Manila began a modest military modernization program in 2012. Until recently, its equipment featured Vietnam War-era helicopters and World War II naval vessels used by the United States.

After President Marcos took power on June 30, the new government reviewed the Russian deal, arriving at the same decision as Duterte.

—WITH A REPORT FROM AGENCE FRANCE-PRESSE

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