MANILA: The Philippines may become the region’s defense industry hub after several countries expressed an interest in basing their arms and defense manufacturing facilities in the country.
Among the facilities are firearms and force protection plants, as well as ones for aviation maintenance, repair and overhaul.
Department of National Defense (DND) spokesperson, Arsenio Andolong, cited at least three countries — Israel, Russia and South Korea — as among those with a keen interest to undertake such projects.
However no agreement has been signed yet and proposals are still in the exploratory stage, Andolong said.
There are plans, however, to create a zone processing defense material at the 370-hectare Government Arsenal (GA) in Limay, Bataan. It will be called the Government Arsenal Defense Industrial Economic Zone (GADIEZ), which will accommodate foreign defense firms that want to establish their manufacturing plants in the Philippines.
With Israel, negotiations have been ongoing. “It all began when we purchased our latest acquisitions from them, the force protection equipment during the time of (then Defense Secretary Voltaire) Gazmin,” Andolong said.
“They became more aggressive when we started doing market research for the many things that we wanted. In one of our meetings the plan to put up an export processing zone for war materiel was discussed and that’s when they expressed interest,” he said.
But Israel now changed its focus; they now want to enter into partnership with Philippine Aerospace Development Corporation.
An agreement has yet to be signed however between the Philippine government and an Israeli firm for its entry through aircraft repair.
“I think eventually it will lead to setting up a UAV manufacturing facility,” a highly placed source said.
Russia, meanwhile, is more likely to have a firearms factory in Bataan province, in central Lozun region.
That is despite the ceremonial signing of a Letter of Intent (LoI) of Silver Shadow Advanced Security Systems (SASS) and Rayo Illuminar Corporation (RIC) to “explore opportunities in the manufacturing and refurbishment of small arms and ammunition,” during Duterte’s recent visit to Israel. The project is estimated to be worth $50 million.
Russia, according to Andolong, has been sending representatives to the country to discuss their offer for a joint production facility to produce Russian assault rifles, or AK47s.
“The Russians verbally communicated that they would like to go into a partnership with the GA to manufacture AK47 rifles in the Philippines. But at this time it’s still a verbal proposal. The Department of Budget and Management (DBM) has required them to submit a feasibility study.”
A proposal by a South Korean firm that also wanted to set up a firearms factory in the Philippines was put on hold after they gave terms and conditions that were not acceptable — such as “there will be capitalization from the government.”
“So everything is still fluid but Russia is in the running because they are offering many nice goodies,” the DND spokesperson said. “Like the submarines, for example; they said if the Philippines can’t afford to purchase then they can give a soft loan to finance it. And they also mentioned about packages they can use to start up the business.”
Andolong said that the reason that these countries chose the Philippines to set up their facilities was mainly because “they want to create a hub here in the Southeast since they don’t have a presence here yet.”
“It may also be “because of our location. Aside from that we are I think the first Southeast Asian country who offered this,” he said.
“The Philippines is close to many potential markets of Russia and Israel, because these two countries, their main exports really are armaments and they have no footprint in this region,” he said.
