Philippines prefers G2G approach to buy offshore patrol vessels

27 August 2019 (Last Updated August 27th, 2019 11:48)

The Philippines is planning to procure six new offshore patrol vessels (OPV) through an inter-government agreement with the Australian government.

The Philippines is planning to procure six new offshore patrol vessels (OPV) through an inter-government agreement with the Australian Government.

The Philippine News Agency (PNA) reported that the OPV project will be funded by a financing arrangement with Australia, citing Philippines Defence Secretary Delfin Lorenzana.

Lorenzana said: “We are availing of Australian Government financing (for the project).”

The inter-government approach is being pursued to ensure that the deal has ‘sovereign guarantee’ and the acquisition is completed in a time-bound manner.

It will also mean that the Philippines Government can do away with the requirement of a ‘large capital outlay’ for the project.

The Philippine Navy’s (PN) OPV project is expected to cost around PHP30bn ($571.24m).

In July this year, Lorenzana visited Austal Philippines in Arpili, Cebu. Austal has shown interest to construct the patrol vessels for the PN.

The Australia-based company proposed a larger variant of the Cape-class patrol vessels.

The 80m-long vessels are in service with the Royal Australian Navy and Australian Border Force.

Lorenzana said: “Government-to-government is (the procurement process being favoured) by the PN.”

The ships are being acquired under Horizon Two of the Armed Forces of the Philippines Modernization Program.

The OPVs will replace the PN’s existing World War II-era corvettes and minesweeper vessels.

Meanwhile, the South Korean Government is interested in funding the project to acquire corvettes for the PN.

The Navy prefers awarding a deal to shipbuilder Hyundai Heavy Industries (HHI) to build two anti-submarine vessels, Lorenzana noted.

HHI is already building two Jose Rizal-missile frigates under a PHP18bn ($342.74m) deal.

The first and second vessels will be delivered by April and September 2020, respectively.