PHL stands to lose P30B in Aussie loan due to Duterte order

The Philippines risks missing a P30 billion loan from the Australian government for the modernization of the Philippine Navy because of President Rodrigo Duterte's order stopping negotiations and agreements from countries that backed a United Nations probe on the bloody war on drugs.

Defense Secretary Delfin Lorenzana said Monday he would ask Duterte to exempt the upcoming deal from the ban.

During the Senate hearing on the Department of National Defense's P258.35 billion proposed budget for 2020, Minority Leader Franklin Drilon asked Lorenzana if there are aid or loan negotiations that will be affected by the order of the President.

Lorenzana said he is currently in talks with the Australian government for the building of six offshore patrol vessels for the Philippine Navy.

“They (Australia) are willing to finance it first and we will pay it in a span of how many years, amortize it accordingly. I earlier said we will comply with the (President’s) memo but I will ask for some exemptions if there is a need to and I would like to make it clear now that we would like to ask for exemptions for Australia,” he said.

Australia is one of the 18 countries that voted in favor of the resolution in July to compile a comprehensive report on Duterte's three-year crackdown, during which at least 5,500 people have been killed in what police say were shootouts with dealers who resisted arrest.

The Defense chief expressed belief the President will grant his request because the project will benefit Filipino workers.

“I’m almost certain that he will because it will benefit our people,” he said.

“These ships will actually be built in Cebu because Austal Australia has a branch in Cebu and they are employing a lot of Filipinos there. In fact, employees there are 95% Filipino. If we give it to them, they will employ more Filipinos . I think, it will be a very good case to be exempted from the memo of the President,” he added.

Lorenzana admitted that he has yet to make a request because he has yet to receive a reply from the Australian government.

“We are still talking with the Australian. I wrote them a letter that we would like to avail of financing from the government of Australia and they have not yet replied to me. Once I get that reply, I will have to get exemption from the President,” he said.

Drilon backed Lorenzana.

“The benefit is two-pronged. One, it will benefit the Armed Forces; two, it will benefit our ship building economy because this will be done in Cebu. Hopefully, the President will reconsider it in so far as the DND is concerned,” he said.

He then asked what the Defense secretary will do if the request for exemption is disapproved by the President.

Lorenzana said the Philippine government will instead shoulder the P30 billion requirement.

“We have to make the money first, from DBM (Department of Budget and Management), P30 billion. But for the Australian deal, we are only required to pay 10% of the initial building (of offshore patrol vessel),” he said. —LDF, GMA News