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DND Seeks Release of Funds to Buy Korean Fighter Jets

KAI F/A-50 light combat aircraft 

MANILA, Philippines - The Defense department has asked Malacañang to allow the release of a 52-percent down payment to the South Korean firm that offered to supply 12 fighter jets to the military.

Defense Secretary Voltaire Gazmin said they have submitted their recommendation to the Office of the President, which will have the final say on the matter.

“We recommended approval of the DP (down payment) and progress billing,” Gazmin said in a text message Thursday.

The law permits state agencies to pay a 15-percent down payment to suppliers while the rest of the amount would be paid upon the delivery of goods.

South Korean firm Korean Aerospace Industries (KAI) wants the Philippines to pay 52 percent down payment to cover its manufacturing costs. Such payment scheme would require the approval of President Aquino.

Gazmin said the delivery of the jets may start in June 2015.

Defense Assistant Secretary Patrick Velez said negotiations are underway but declined to provide a deadline for the signing of the contract.

“We have settled the turnaround time issue. We are discussing the payment scheme,” he said in a separate interview.

“I’d rather not put a date on this,” he added.

The turnaround time is the period required for the delivery of the jets’ spare parts under a two-year warranty. Gazmin said both parties have agreed to set the turnaround time at 60 days.

The government plans to spend P18.9 billion to acquire 12 FA-50 jets from South Korea. The acquisition is part of the effort to boost the Air Force’s territorial defense capabilities. Security officials started their negotiations with KAI in July.

Earlier, Air Force chief Lt. Gen. Lauro Catalino dela Cruz said two FA-50 jets could be delivered by the end of 2014 if all the necessary documents are signed this year.

Officials, however, said it is unlikely that a deal would be reached this year.

The acquisition of FA-50 jets is one of the big ticket items in the military’s multi-billion upgrade program.

A total of P85.29-billion is needed to support the program for the next four years.


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