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HomeUncategorizedKorean firm bags P25B deal to build PH Navy corvettes

Korean firm bags P25B deal to build PH Navy corvettes


It’s official: Hyundai Heavy Industries (HHI) of South Korea has been awarded a P25 billion contract to build two corvettes for the Philippine Navy.

The Department of National Defense (DND) issued a notice of award on Dec. 15, according to two senior security officials familiar with the situation.

The development occurred shortly after the Department of Budget and Management (DBM) approved funding for a 15% downpayment on the P3.75 billion corvette acquisition project on Dec. 10.

According to senior officials, a contract could be signed before the end of the year.

Defense Secretary Delfin Lorenzana previously stated that the acquisition would be financed through a government-to-government loan agreement.

According to top defense and navy officials, HHI has been the preferred supplier for the program since it was announced in 2019. In 2016, the South Korean shipyard completed two multi-role frigates for the Philippine Navy under a P16 billion contract.

However, after a disagreement over the combat management systems (CMS), which are considered the “brain” of the warships, the frigate acquisition project drew public attention in 2018.

The disagreements stemmed from the shipbuilder’s failure to meet the Philippine Navy’s technical working group’s original preference for a Link 16 compatible CMS. Ultimately, despite the lack of US certification, the South Korean Ministry of Defense guaranteed that the ships’ CMS is compatible with Link 16, and the shipbuilder has offered to pay for the integration of the CMS to Link 16 when the Navy acquires this capability in the future.

One of the big-ticket items in the Philippine Navy’s upgrade program is the corvette acquisition project, which is expected to cost P28 billion including weapon systems. Last year, plans to acquire the corvettes were put on hold due to defense funds being diverted to the pandemic response.

The warships would strengthen the country’s presence throughout the archipelago, particularly in the West Philippine Sea, where tensions are rising.

Despite the lack of immediate replacements, the Navy recently retired the last two of its World War II-era patrol ships. Vice Adm. Adeluis Bordado, the Navy’s chief of staff, said the two corvettes and six offshore patrol vessels would be delivered in two to three years.

Korean firm bags P25B deal to build PH Navy corvettes|

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