Withdraw bid to buy $1.5 billion war goods from US

Quite a bad timing for the United States State Department, given the still globally surging COVID-19 pandemic and the International Monetary Fund’s projection of a 3 percent global economic contraction.

Last April 30, through its Defense Security Cooperation Agency (DSCA), the State Department delivered to the US Congress its certification approving the Duterte government’s request to buy six AH-64E Apache attack helicopters and 35 other packages of related equipment and services. 

These include the following: 200 AGM-114 Hellfire missiles; 300 Advanced Precision Kill Weapon System (APKWS) kits; 200 FIM-92H Stinger missiles; 18 M2G1 rocket launchers; 18 M299 missile launchers; 5,000 each 2.75-inch rockets; 80,000 30-mm rounds training devices, plus “communications systems, helmets, simulators, generators, transportation and organization equipment, spare and repair parts, support equipment, US Government and contractors technical assistance, technical and logistic support services, and other related elements of logistical support.”

All together, the estimated cost of the purchases by the Philippine government is $1.5 billion, equivalent to almost P75 billon at the current exchange rate. 

With such certification notice, as required by law, the US Congress has 30 days to review the proposed sale of the war materiel, and presumably will give its approval. And why not? It’s all favorable to the US. A press release issued by the DSCA on its website last April 30 says:

“The proposed sale will support the foreign policy and national security of the United States by helping to improve the security of a friendly country that continues to be an important force for political stability, peace, and economic progress in South-East Asia.”

“The Philippines is considering either the AH-64E or the AH-1Z to modernize its attack helicopter capabilities,” the DSCA adds. “The proposed sale will assist the Philippines in developing and maintaining strong self-defense, counterterrorism, and critical infrastructure protection capabilities. The Philippines will have no difficulty absorbing this equipment and support into its armed forces.”

But how can the deal be favorable to the Philippines, especially at this time? The economy shrank by 0.2 percent in the first quarter this year – with a deeper contraction widely expected in the second quarter. The government is finding it harder to raise more revenues, as paralyzed businesses can’t pay higher taxes. And to recover eventually from the economic slump, much bigger government spending will be required all around.

Clearly, the modernization of the Armed Forces of the Philippines cannot be prioritized now. Much less should modernizing its attack helicopter capabilities be given specific priority. Has the government ever taken into consideration the traumatic impact on the populations in the rural areas and hinterlands that have experienced aerial bombardments, using less lethally effective helicopter gunships and airplanes in the AFP’s unrelenting counterinsurgency and “counterterrorism” campaigns?

Prudence dictates that the Duterte government reconsider its request to buy the $1.5-billion war materiel. (To be fair, the government made the request long before the coronavirus crisis arose; and, to make it clear, it’s not that the purchase is a necessary use of public funds.) 

No doubt, the government must focus on reviving the economy, prioritizing agricultural production, food manufacturing and ensuring efficient daily supply to all consumers; along with greatly enhancing its public healthcare system and social services, particularly to the very poor.

Take note of what these members of the government economic team are saying.

Acting Socioeconomic Planning Secretary Karl Chua: “COVID-19 has certainly posed serious challenges to the country’s strong growth and development prospects… Where we are now could potentially be the worst global recession since the Great Depression of the 1930s.”

Here’s what he says is being done or proposed to be done. The recovery plan will focus on stimulating domestic demand and improving the country’s investment climate. “The recovery plan is to convince people that it is safe to go out and work and we can get businesses to normalize,” he said in a recent briefing.

“Stimulating domestic demand can begin with ensuring that agricultural production, food manufacturing, and the entire value-chain – including logistics from the farm to the [dinner] table – are able to operate at the highest possible capacity,” Chua explained. He stressed, however, that this entails more aggressive testing and isolating those who test positive for COVID-19, among others.

While warning that the economy may be contracting further in the current second quarter, Finance Secretary Carlos Dominguez said there could be a rebound in the second half of 2020 through stepped-up public spending on infrastructure and social programs. Like Chua, he cautioned that the rebound would depend on whether the COVID-19 curve has been flattened and an effective cure or vaccine has been made available by then.

Back to the proposed $1.5-billion war materiel deal.

Implementation of the sale by the US, according to the DSCA, “will require 60 US Government or contractor representatives to travel to the Philippines for a period of six weeks (non-concurrent). Activities will include de-processing/fielding, training, and technical logistics support.”

The principal contractors will be Boeing in Mesa, Arizona; and Lockheed Martin in Orlando, Florida. The DSCA press release points out: “Offsets may be requirement of doing business in the Philippines; however, offsets are negotiated directly between the original equipment manufacturers or other vendors and the Government of the Philippines, and further details are not known at this time.”

We hope to hear from President Duterte about what he plans to do on this matter.

We are sure he will consult his military advisers – who are also primarily involved, and their forces deployed, in the campaign against COVID-19. But we hope he will listen to other voices. As it goes, the AFP spokesperson has repeatedly made clear that the military and other security forces are focusing their operations both against the coronavirus spread and against the Left revolutionary forces they have been continually vilifying as “terrorists.”

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