philippine Government, Russian loan to support submarine procurement

Russia has newly offered the Philippine Government an economic package to support its potential acquisition of Kilo-class submarines, Arsenio Andolong, the chief of public affairs at the Philippine Department of National Defense (DND), told Jane’s on 14 August.

He said the offer was made to the Philippine government recently and consists of a soft loan that would be repayable over several years. He also stressed that the loan has not been agreed but is being considered by the Philippine government as it looks to boost the undersea capabilities of the Philippine Navy (PN).

“This offer was made last week,” said Andolong. “Russia has said that if we require funds [for the submarine procurement] we could opt for a soft loan to be repaid over a period of time. We are considering the offer, nothing has been agreed.”

The new loan offer was made shortly after the PN confirmed that it was discussing with the Russian Navy the terms of a memorandum of understanding centred on the provision of training and support of submarines.

PN spokesman Commander Jonathan Zata also confirmed in comments to the state-run Philippine News Agency in early August that the Philippines is looking at Russia as a “possible source” of submarines and that the pending agreement would facilitate technical and operational training for the PN.

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PN officials have also been invited to Russian shipyards to observe submarine construction programmes, he said.

The PN submarine procurement programme was recently accelerated by the Philippine government, and the DND is expected to decide on the acquisition within the next year. The acquisition, which is likely to feature the procurement of up to three platforms, was previously scheduled for 2023–27 under the Philippines’ ‘third horizon’ military modernisation programme but was moved forward to the 2018–22 second horizon.