The Philippines risks losing its P2-billion downpayment for the P12.7 billion deal with Russia to buy 16 Mi-7 helicopters after the contract was canceled for fears of economic sanctions from the United States (US) and its allies in light of the protracted Russia-Ukraine war.
Former Secretary of National Defense Delfin Lorenzana, who now heads the Bases Conversion and Development Authority, said that there’s still a possibility for us to get the money, but negotiations for its return will take time.
“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,” he said on Wednesday (Aug. 3).
He also said that it was former President Rodrigo Duterte who decided to cancel the deal, with the recommendation of former Department of Finance Secretary Sonny Dominguez to Philippine Ambassador to the US Babe Romualdez.
According to Lorenzana, the Philippines could face up to 10 different types of sanctions from the US and its allied nations, including freezing the bank accounts of the Philippine government abroad, and holding of remittances of Filipinos from the US, under its Countering America’s Adversaries Through Sanctions Act (CATSA).
On July 27, Lorenzana confirmed the termination of the said contract, which took effect on June 25, mere days before the President Ferdinand Marcos Jr. took office. The newly-installed president was informed of the decision, and said that he would honor it.
Under the agreement signed in November 2021, the first batch of the helicopters would’ve been scheduled for delivery within the next two years, which could’ve been used for combat, search and rescue operations, and medical evacuations during natural disasters.
However, Lorenzana also said that it is up to the Marcos administration if it will pursue the return of the initial payment.
Marvin Joseph Ang is a news and creative writer who follows developments on politics, democracy, and popular culture. He advocates for a free press and national democracy. Follow him on Twitter at @marvs30ang for latest news and updates.
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