Philippines cancels $314m helicopter deal with Russia
Security officials worried deal may fall foul of US sanctions in wake of war in Ukraine
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MANILA • The Philippines has scrapped an order for 16 Russian military helicopters, an official confirmed yesterday, following reports that former president Rodrigo Duterte decided to cancel it due to US sanctions on Russia.
Manila - a long-time Washington ally - agreed in November to pay some 12.7 billion pesos (S$314 million) for the Mi-17 helicopters, as it seeks to modernise its military hardware.
The United States and its allies imposed wide-ranging sanctions on Russia in the wake of its assault on Ukraine in February.
They are aimed at cutting off Russia from the global financial system and choking off funds available to Moscow to finance the war.
The Philippine Defence Ministry was "formalising the termination" of the contract, spokesman Arsenio Andolong said yesterday.
Without mentioning US sanctions on Moscow, Mr Andolong said "changes in priorities necessitated by global political developments resulted in the cancellation of the project by the previous administration".
Mr Delfin Lorenzana, who served as defence minister under Mr Duterte, said in March that the Philippines had paid a deposit for the transport helicopters before war erupted in Ukraine, and that the deal was "on track".
But last week, Mr Lorenzana, who now heads a different government agency, told reporters that Mr Duterte himself decided to cancel the deal in the waning days of his administration over the sanctions threat.
"I don't know if we can still get back the money since we were the ones who terminated the contract," Mr Lorenzana said.
Russian embassy officials in Manila could not be reached for comment.
Philippine Ambassador to the US Jose Romualdez recently said the decision to cancel was triggered by "the Ukrainian war".
Mr Romualdez said Manila was also wary of falling foul of a US law passed in 2017 that sanctions anyone doing business with Russia's intelligence or defence sectors.
The US was offering "alternative helicopters to meet our needs", he added.
Manila began a modest military modernisation programme in 2012.
Until recently, its equipment featured Vietnam War-era helicopters and World War II naval vessels used by the US.
After President Ferdinand Marcos Jr took power on June 30, the new government reviewed the Russian deal, arriving at the same decision as Mr Duterte.
AGENCE FRANCE-PRESSE
