PH calls off chopper deal with Russia, Lorenzana confirms

Bianca Dava, ABS-CBN News

Posted at Aug 04 2022 12:39 AM

Paratroopers of the Hungarian Army EPA-EFE
Paratroopers of the Hungarian Army’s 24th Gergely Bornemissza Scout Regiment prepare for a take-off aboard a Mi-17 helicopter during their drill at the airport of Hajduszoboszlo, Hungary, 11 May 2022 (issued 12 May 2022). The paratroopers made their jumps from heights between 500 and 3,000 meters as a tribute to late Staff Sergeant Szabolcs Gal, a member of the Hungarian Armed Forces world champion parachute team, of the 86th Szolnok Helicopter Base. EPA-EFE/Zsolt Czegledi

MANILA - The Philippine government has called off a deal to purchase 16 military transport helicopters from Russia due to fears of possible sanctions by the United States, former Defense Secretary Delfin Lorenzana confirmed on Wednesday.

Lorenzana said he canceled the P12.7-billion deal to acquire the Mi-17 helicopters last June 25, a few days before his term ended on June 30.

It was former President Rodrigo Duterte’s decision to scrap the deal, he added.

"It was canceled because it was the decision of the president to cancel it because of the threat of being sanctioned. On the recommendation of the Secretary of Finance to the Ambassador to the US, he said that it is better for us to terminate the contract because the disadvantage that we will get is more than if we get the choppers," Lorenzana told reporters in Makati City.

Asked what sanctions Manila could face had the deal gone through, the former defense chief answered: "Possible sanction is to freeze the accounts of the Philippines, foreign reserves natin. That would be disadvantageous sa atin. Another one, baka pigilan nila ang remittances ng Filipinos from the US to here or whatever. So many. Secretary Dominguez enumerated ten kinds of sanctions. Mas mabuti na lang itigil natin kasi mas malaki ang damage sa atin ng sanctions kaysa deal na iyan."

"We can resume the choppers maybe after some time that the sanction is lifted by the US against Russia. We thought that if we pursue with the purchase, we might not be able to pay the payment because of the sanctions," he noted.

The Associated Press earlier reported that Philippine Ambassador to Washington Jose Manuel Romualdez said the contract was canceled because the Philippines could face possible sanctions under a US federal law called the Countering America’s Adversaries Through Sanctions Act if Manila proceeded with the chopper deal due to the US’ worsening conflict with Russia.

Lorenzana, however, said the country had already made an initial payment of P2 billion to Russia. It isn’t clear yet whether or not the Philippines can get the money back.

"We don’t know if we could still get back the money since we are the ones who terminated the contract. It will take some time for the negotiations for us to get back the P2 billion," Lorenzana said.

He continued, "Wala pa [negotiations to get the money back], nothing yet. We have not yet initiated anything. It’s up to the new administration if they want to talk to Russia to return the P2 billion."

The project was a "multi-year procurement contract" signed in November 2021. The initial payment was made last January.

Under the agreement, the first batch of multipurpose helicopters would have been scheduled for delivery by Russia in about two years. 

The Russian-made helicopters could have been used for combat, search and rescue operations, and medical evacuations.

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