Friday, August 28, 2015

Post-SONA Updates on the AFP Modernization Programs under RA 10349 and RA 7898

Philippine President Benigno Aquino III confirmed during his last State of the Nation Address (SONA) early this month that 30 projects for the modernization of the Armed Forces of the Philippines (AFP) were signed and funding will be allocated soon. So far, the approval was only made in less than 2 months, so it is expected that the budget may not have been released yet.

But with elections coming in soon, the government may need to speed-up the release of budget to allow the Department of National Defense (DND) to award them immediately before they are considered as midnight projects.

MaxDefense takes a look on the status of projects under the Revised AFP Modernization Program Horizon 1, as well as some projects for older AFP Modernization Program that are still ongoing.



Backtrack:

Before the 30 projects were approved, several projects were already prepared for acquisition, or were already being tendered. These includes several big-ticket items under Horizon 1 (2013-2017) phase of the Revised AFP Modernization Program (RAFPMP) under Republic Act 10349, in addition to projects already approved in the past but are under the AFP Modernization Program (AFPMP) covered by Republic Act 7898. Delayed as they are, these balance AFPMP projects are being pushed to be completed within Pres. Aquino's term.

MaxDefense believes that at its current phase, the DND and AFP won't be able to complete all balance projects under the AFPMP RA 7898.



Multi-Year Obligational Authority 

Due to the huge amount of several projects, the DND has proceeded to fund these projects in an installment basis based on the Multi-Year Obligational Authority (MYOA), a system that provides funding of a certain project in a yearly installment basis. This is by ensuring that the AFP/DND includes the annual payment for the project in their annual budget proposal, in this case, the AFP Modernization Program. 

There are several projects that are to be acquired via MYOA, an example of which is the Frigates for the Philippine Navy, and the FA-50PH for the Philippine Air Force.

More on MYOA can be seen on link provided HERE.



Projects under the Revised AFP Modernization Program:

Philippine Navy Projects:

The Philippine Navy (PN) has 10 projects covering Horizon 1 phase of the Revised AFP Modernization program, and some have already started the tendering process, including the Frigate project, Anti-Submarine Helicopter (ASH) project, Multi-Purpose Attack Craft (MPAC) Mk. 3 project, Jacinto-class Patrol Vessel (JCPV) Combat Systems Upgrade project, Amphibious Assault Vehicle (AAV) project, and the Marine Forces Imagery and Targeting Support System (MITSS) project,


The month of August is about to end yet there is no news yet on the awarding of the new frigates for the Philippine Navy to any of the contending shipbuilders.


The Frigate and Anti-Submarine Helicopter projects have already completed the Stage 1 of its 2-Stage Bidding. But it is expected that the Frigate will be awarded first, as the final design and subsystem composition of the ship would be the basis for the final specifications of the Anti-Submarine Helicopters. Up until this writing, there are no formal indications yet that an awarding can be made soon for the frigates, while AgustaWestland has so far been the only responsive bidder for the helicopters with their AW159 Wildcat. It is still to be determined though if the final offer from AgustaWestland will be responsive to the final specifications and budget provided for the bidding's 2nd stage.


With no award yet for the new frigates, the Anti-Submarine Helicopter acquisition project has stalled since it would be dependent on the winning frigate's design and components. So far only AgustaWestland has cleared the 1st stage of the 2-stage bidding.  


Meanwhile, the Amphibious Assault Vehicle project has completed the post-bid qualification and is only awaiting for a Notice of Award (NOA) to be provided to the winning bidder. Samsung Techwin of South Korea will only start the production of the actual product, the Korea Amphibious Assault Vehicle (KAAV) after the DND issues the Contract and necessary notices. According to MaxDefense sources, actual release of funds for the initial payment covered by the MYOA is already being processed to secure backing for a NOA.


A Notice of Award for Samsung Techwin's KAAV to fulfill the acquisition of Amphibious Assault Vehicles for the Philippine Navy is still pending as of this writing.



The MPAC Mk.3 project, which is divided into 2 parts, has already announced the bidding for the 1st lot which covers the actual boat and standard subsystems. As of this writing, the DND has not yet made an updated schedule on when the bid submission and opening is. The 2nd lot will involve the acquisition and installation of remote weapons systems (RWS) and short-range surface-to-surface missile systems that will be awarded via Government-to-Government (G2G) deal with Israel. MaxDefense expects this to be Rafael's Typhoon 12.7mm RWS and Spike-ER missiles.


3 more additional MPACs are being procured under the RAFPMP's Horizon 1 phase, and will be installed with a remote weapons station for a 12.7mm machine gun and short range surface-to-surface missiles.



The Jacinto-class Patrol Vessel Combat Systems Upgrade project's bidding was recently reported to have failed as none of the 9 potential bidders submitted a bid. As discussed in our MaxDefense Facebook page, several of the bidders requested to increase the Approved Budget of the Contract (ABC) as the amount was not enough to do what the PN specified. The PN and DND is now reviewing the details and is yet to decide if they would increase the budget, or reduce the amount of work to be made to fit in the budget allocated.




Philippine Air Force Projects:

With 11 projects, the Philippine Air Force (PAF) has so far been the recipient of the only projects approved earlier under the RAFPMP, which are the Combat Utility Helicopter (CUH) project and the Surface Attack Aircraft/Lead-in Fighter Trainer (SAA/LIFT) acquisition project. The CUH project saw the delivery of 8 Bell 412EP helicopters from Canada, and the awarding to Korea Aerospace Industries (KAI) for 12 FA-50 Fighting Eagle jet aircraft.


A replacement for the PAF's OV-10s is urgently needed, but so far the bidding for the CAS aircraft acquisition project has not moved even after the project was approved for budgeting.


Prior to the president's SONA, the PAF has several projects already being tendered but are awaiting for approval for funding of the projects before it can push further. These includes the Air Defense & Surveillance Radar project, the Close Air Support (CAS) aircraft project, the Long Range Patrol Aircraft (LRPA) project, the Full Motion Flight Simulator project, and the C-130T acquisition project.

The C-130T acquisition is a Foreign Military Sales (FMS) project with the US government, in which the US government will shoulder $20 million for 2 ex-US Marine Corps C-130T Hercules aircraft, while the Philippines will shoulder around Php1.6 billion. As per previous press releases and latest confirmation by US Ambassador to the Philippines Philip Goldberg, the aircraft will arrive in the country by 1st quarter of 2016.


The delivery of 2 C-130T from the US was confirmed recently as on the way and expected to arrive by 1st half of 2016.
Photo taken from the US Embassy in the Philippines website.


Another project is a government-to-government (G2G) deal involving the acquisition of 3 Air Defense & Surveillance Radar systems from IAI-Elta of Israel, which is already delayed due to the late approval by the president. Originally the plan involves the donation of a feeder radar system to the PAF in time for the APEC Conference this November 2015 while the 3 new radars are being made. With the delays, it is still not confirmed if the Israeli government can provide the said radar before the said conference. The NOA for this project is also pending until now, and further delays would mean the new radars would only arrive in 2017 following the delivery time frame. While the radars are still pending award, the construction of facilities to house these radars are also awaiting awarding.

The Long Range Patrol Aircraft project's bidding failed in its first attempt last year, and no new announcement has been made by the DND on when they intend to restart the tendering process. Take note that this project is confirmed by DND sources as separate from the plans to acquire refurbished maritime patrol aircraft from the US and Japan. Meanwhile, the bidding for the Close Air Support Aircraft has been pending for almost 2 years now, with several changes made on the submission of bids. No time frame has been made yet on when the bid submission will take place as of this writing, although this was said to be among the most urgent requirement as the PAF's OV-10s are rapidly deteriorating due to age and airframe stress.


Plans to acquire 2 new Long Range Patrol Aircraft is still pending, as the DND and PAF has not yet confirmed of restarting the bidding for the project.

Another project that was undergoing tender last year but failed to move forward is the Full Motion Flight Simulator acquisition project, which until now has no movement as well.

Still undetermined if a bidding will be the acquisition mode to used are the ammunition for the FA-50 aircraft. MaxDefense sources confirmed that officials prefer bidding for the supply of air-to-air and air-to-ground missiles, which means that the PAF and DND is open for a challenge against the bench-marked AIM-9L/I-1 Sidewinder and AGM-65 Maverick missiles. A possible alternative would be from Israel like the Python-Derby tandem from Rafael which are said to be compatible with the FA-50. But the decision if the project would be for bidding or direct negotiation is still not final.


The PAF has bench-marked their choice of a short-range air-to-air missile to the Raytheon AIM-9L/I-1 Sidewinder missile, although it was said that they would prefer a bidding to acquire the FA-50PH's missile requirements.




Philippine Army Projects:

The Army has 9 projects being pushed for the Horizon 1 phase, and cost the least among the 3 major services of the AFP. So far, none has been awarded as well, although there are some projects that have already started the procurement process.

The only project that has already started the tender process is the Night Fighting System project, which is for the acquisition of a helmet or rifle-mounted monocular, and a laser targeting device. Although the DND has already released information to potential bidders, they have not yet decided on a confirmed date for the bid submission and opening. 


The Night Fighting System has already started the procurement stage but is yet to schedule a bid submission and opening date.
Photo taken from UDMC's FB page.


Several projects in the Army will be acquired via direct negotiation and G2G, including vehicle-mounted and handheld radios that are expected to be awarded to Harris Corp. USA, the Rocket Launcher Light which is also expected to be awarded to Airtronic USA who also previously got the contract to supply RPG-7USA to the Philippine Army. There is also another requirement for 60 Field Ambulances that will probably be awarded via G2G to AM General for additional Humvee-based M1152 combat ambulance.


The delivery of the first batch of RPG-7USA is said to arrive before the year ends. The RPG-7USA made by Airtronic USA was chosen for the Philippine Army's Rocket Launcher Light (RLL) project.


Another project that has not yet gained traction is the refurbishing and repair of 114 ex-US Army M113A2 armored personnel carriers, including its shipment from California to the Philippines. This is a critical project since, according to MaxDefense sources, the DND and PA were already given a deadline to ship them out of the storage facility.

Finally, there is the controversial acquisition of Shore-Based Missile System that was rescheduled and budget-realigned by groups led by current Chief of the Staff of the AFP, Gen. Iriberri. So far, MaxDefense was informed by its sources in the DND that the proposed projects to replace the SBMS are not yet approved by the president and was not among those 30 projects approved recently.



AFP General Headquarters and AFP-Wide Service Support Units Projects:

Aside from the 3 major services, the AFP's General HQ and Service Support Units also have 3 projects under the RAFPMP's Horizon 1 phase. 


GHQ is in need of almost 700 Kia KM-450 for the AFP-wide Service Support Units.


This includes the G2G procurement of additional 680 Kia KM-450 trucks, and the tendering for the acqusition of Civil Engineering Equipment and the C4ISTAR system. So far, MaxDefense was informed that Hyundai of South Korea is also awaiting for a NOA for the additional lorries, while tendering for the C4ISTAR and Civil Engineering Equipment has not yet started.



In-Progress Projects under the AFPMP:

Philippine Navy:

All naval helicopters awarded to AgustaWestland for their AW-109E Power helicopters have already been delivered and accepted by the PN. 

Upgrades for the Gregorio del Pilar-class frigates are also being done but at a piecemeal-basis. Although there were already several proposals provided to the PN for the upgrades of its sensors and combat suite and weapons systems, it seems that the PN has not yet fully decided on the final system composition. 

Construction of the Strategic Sealift Vessels by PT PAL of Indonesia is underway, and is reported to be within schedule. 


Philippine Air Force:

The delivery of AW-109E Power armed helicopters are expected to continue within this year after the PAF accepted the first 2 units last week. All 6 balance helicopters were reported to have completed their flight tests in Italy and are awaiting for the delivery go-signal, which may have already been provided by the DND and PAF.

Two more C-295M medium tactical transport aircraft are also for delivery within this year, with Airbus-CASA already confirming this a few months back. There appears to be no compelling reason to delay the delivery, so expect it to really be in the country soon. Indonesia's PTDI also reported that they can deliver two NC-212i light tactical transport aircraft within the year as well.

The previous plan to acquire Search and Rescue Seaplanes have been shelved for now, but was included in the PAF's acquisition plan under Horizon 2 phase. 


Plans to acquire SAR Seaplanes for the PAF has been shelved for now. Expect the plan to come out again in the Horizon 2 phase of the RAFPMP.


Philippine Army:

The Philippine Army has recently awarded a contract with Harris Corporation USA for the acquisition of vehicle-mounted battlefield communication radios, which was reported last December 2014. It is expected that the radios will commence delivery by either late this year or early 2016.

The initial 6 units of M113A2+ delivered by Elbit Systems Land & C4I has arrived in the Philippines, as covered by the Upgraded M113 Acquisition Project. Installation of its gun system is currently ongoing in Mechanized Infantry Division's home base at Camp O'Donnell, Tarlac. 

As stated earlier, the first batch of RPG-7USA for the Philippine Army is expected to arrive within the year. It was also reported recently that the stalled distribution of Remington R4A3 rifles has already been settled and will commence very soon.

The acquisition of 12 155mm Towed Howitzer for the Philippine Army and Philippine Marine Corps is also awaiting for the Notice of Award, after Elbit Systems Land & C4I passed the post-qualification requirements of the DND. 

Bad news has hit the delivery of Force Protection Equipment for the Philippine Army and Marine Corps as the winning bidder Achidatex Nazareth Elite has failed to deliver the products. The DND is expected to make a decision on the matter very soon.


The first batch of 6 M113A2+ from Elbit Systems of Israel has arrived, with the next batch of armored vehicles expected to arrive in the country soon.




Summary:

Despite the massive delays, AFP Modernization Program under RA 7898 has been progressing well, although some setbacks arose on several projects like the Force Protection Equipment, the Joint Assault Rifle, and the Gregorio del Pilar-class upgrades. There were also previous set-backs that have been ironed-out including the AW-109E for the PAF.

The real problem now is on the implementation of the Revised AFP Modernization Program under RA 10349, which has not moved much after a month after the president approved the projects. MaxDefense believes that further delays in the implementation of these projects will not only further delay the project delivery and integration of the weapons system to the AFP's capability, but may also delay projects that will be implemented under the Horizon 2 phase of the program. 

It would be in the best interest of both the AFP and DND to speed-up the acquisition process, and to avoid an overlap of phases in the coming years. It should be noted that the next phase would be much more complex than the current phase, and will be difficult to implement if there are still pending projects from the previous phase that are still being processed. 

Thursday, August 13, 2015

Revisiting the Government-to-Government Process - The Better Acquisition Alternative for the Armed Forces of the Philippines

MaxDefense has been in up online since May 2013, and for the past 2 years, it believes that the Armed Forces of the Philippines (AFP) has been improved a little better now compared to then. A good sign, after a long time of almost no improvements for close to 2 decades. MaxDefense commends the leadership of President Benigno S. Aquino III for bringing such improvements to the armed forces for the past few years.

But all these gains still fail to avoid us from looking at the other side of the coin. As MaxDefense pointed out in its previous blog entry, the Aquino administration took more than 2 years to approve the endorsed wishlist of the AFP for its procurement under the Revised AFP Modernization Program RA 10349. And so far, the AFP has not receive any major equipment that could be used to defend the country's EEZ and interests in the West Philippine Sea other than 2 gun frigates converted from coast guard cutters.

Add to that other disappointing issues. Just within this year alone, the Department of National Defense (DND) has consistently been in the hot seat and named as one of the most corrupt departments of the Aquino administration. Several accusations of graft and corruption, favoritism, bid rigging, and many other issues within its ranks were reported, and although nothing has been proven yet in the courts of law, the mere presence of these reports are disturbing enough. As they say, if there's smoke, there's a fire. And most of these issues were tied to the bidding and procurement under the AFP Modernization Program.

With all these issues, is the current procurement process really the problem that is affecting all the issues mentioned above? Is it still the best way to modernize the AFP? How far did the AFP Modernization Program (AFPMP) really did move from then till now?



The Great Italian Sale - The Maestrale-class Frigate Saga

After a hopeful start with the AFPMP under the leadership of Pres. Aquino, the AFP formulated a list of what it needs to have to properly defend the country from inside and out. And among those being looked upon to boost the AFP's capabilities and equipment acquisition opportunity 4 years ago were the acquisition of cheap, used, readily available, and still capable Excess Defense Articles (EDA) from friendly or allied nations.

For those who can remember these events a few years ago, many were delighted with the plans to acquire from Italy two units of refurbished Maestrale-class frigates, together with several other equipment offered by the said country including the a couple of Soldati-class frigates and Minerva-class corvettes, hundreds of VCC-1 armored personnel carriers, dozens of FH70 155mm howitzers and Centauro tank destroyers and FH70 155mm howitzers, a squadron or two of AMX attack aircraft, and even a few Tranche 1 EF-2000 Eurofighters. Thus called "The Great Italian Sale", or simply "The Italian Package" within those in the DND and AFP circles.

Those where the days when the military was looking forward to acquire a lot from the Italians, with many in the military saying that finally, the Philippines could now catch-up with the rest in the region. It was even among the reasons why MaxDefense started, to discuss to the public what is happening and what these equipment are for to the ordinary Filipino, in anticipation of many questions coming in from the public.

Remember the Maestrale-class frigate saga? This was actually the start and end of the plans to acquire excess defense articles from Italy. 3 years on, the Philippine Navy still has no frigates except for the Hamilton-class cutters from the US.
Photo taken from Wikipedia.

Aside from Italy, many other countries showed interest to sell their excess defense articles to the Philippines, thanks (or no thanks) to the economic crisis in Europe that time. France, Spain, and even the UK and Germany, were all looking forward for a possible sale, which not only helps them get some earnings while reducing their expenses in maintaining their armed forces, but at the same time was looking at this goodwill gesture to improve relations with the Philippines. Suddenly you can hear news or rumors on the possibility of acquiring Mirage 2000 or Mirage F1 fighter aircraft from France, Leopard 2 main battle tanks from Germany, Santa Maria-class frigates and Descubierta-class corvettes from Spain, and many more as an alternative to what the Italians have to offer.

The French offered excess Mirage 2000 fighters, but nothing was heard after on this offer when the Philippine government decided to go brand-new for its military equipment acquisitions.



The Fall of Plans to Acquire Excess Defense Articles from Europe

Then, it happened. Changes in the military leadership, together with alternatives from other countries, suddenly changed the mindset on the acquisition. The Philippines dropped plans to acquire the Maestrale-class frigates in which almost all the offers made by Italy were tied with. This was because the Philippine government decided to acquire brand-new military equipment by tendering in conjunction with RA 9184 Government Procurement Reform Act. One by one, all the offers from friendly countries died down, and instead the government invited arms manufacturers to join the tenders.

The Italians also offered a hundred of their VCC-1 Camillino armored personnel carriers, an Italian version of the American M113. Eventually, the Philippines decided ask the Americans for M113A2 which was provided by grant. But until now, not even 1 of the 114 M113A2 provided by the Americans are in Philippine Army hands.


The intention was good, as it means the AFP will be getting brand new equipment instead of refurbished old units. But 5 years after, the AFP is still nowhere the original plan that was promised by the Aquino administration, and nowhere from the projected force should the government acquired all those used refurbished European military wares.

Reasons vary depending on who you talk to. The Department of National Defense claims that the ships were too old and expensive for their age, and that buying new would be more beneficial and will not as expensive as earlier thought compared to the offers made by Italy. Some people say otherwise, that the deal fell through because of indecisiveness of the defense leadership. 

Other credible sources say that officials within the AFP and DND are against EDA because they won't be earning anything due to the Government-to-Government (G2G) nature of the deals, and other reasons that are only beneficial to the people involved in the procurement system. MaxDefense won't be too specific on these because in the end, it turned out that the AFP will not be as effective as we thought by 2015.




Failures of the Current Acquisition Process of the DND

The introduction of the system as indicated by the RA 9184 has brought transparency to the procurement system, which was unseen for a long time. Theoretically, the system's safeguards and procedures should instill a fair, corrupt-free procurement process to the corruption-hounded DND and AFP, and clean the institutions from the terrible coinage as among the most corrupt in the government.

But it seems that there are still people who were able to manipulate the system, and still enabled them to continue corruption by going around the implementing rules and regulations. This might not just be the case in the DND and AFP, but also in several other government agencies and departments.

Budgetary issues, red tape, favoritism, failed tenders, lack of experience by the DND and AFP planners, graft and corruption issues, delayed product deliveries, failed products, changing policies of military leaders, leadership incompetency, and other reasons have further delayed the acquisition process of the AFPMP.

Among the most painful of all is the corruption concerns because not only is it delaying the process, but also jacks-up the prices of equipment being acquired to the expense of tax payers, and becomes a reason for substandard equipment to be acquired. Among those corruption issues raised only this year against the DND and AFP leadership include the following issues, but not limited to:

- the acquisition of Dornier-Bell UH-1D combat utility helicopters from Rice Aviation Services Inc., in which accusations of corruption, bid rigging, and flawed products were thrown against the DND and PAF;
- the realignment of the Shore-Based Missile System by the Philippine Army, and supported by the DND leadership, which was accused as a way to get commissions and kickbacks, and as a vendetta against the local agent of Israel Military Industries for filing a graft case against the incumbent Chief of Staff of the AFP;
- allegations that some officials of the DND asked arms manufacturers for a "joining fee" to enable them to bid for certain projects of the AFPMP, which includes Israel Aircraft Industries-Elta and Raytheon

Although no proof has been laid forward until now, the point that there is a new damaging issue coming out in almost every month shows that there is really something wrong with the system. And with the elections coming in very soon, MaxDefense expects more negative news against the AFP and DND, further damaging the effort to modernize the AFP in what remains of the limited time until Pres. Aquino steps down from office.

The realignment of the Shore-Based Missile System has been among the most highly debated upon by defense experts and law makers, and may even cost the appointment of an AFP Chief of Staff if proven to be irregular.



2015 - Where is the AFP Modernization Program Now?

As discussed in the previous MaxDefense blog entry, our assessment is gloomy on where the modernization program is right now. A little summary of our previous assessment:

- the old AFP Modernization Program under Republic Act 7898 is still incomplete until now, with several more projects still ongoing, or has not even started. As of last check, the DND still has around 15 or more projects ongoing or for implementation as of this writing, with the acquisition of a 3rd Hamilton-class High Endurance Cutter from the US Coast Guard as probably the last to be implemented.

- the newer Revised AFP Modernization Program under Republic Act 10349 has only 2 of 33 projects awarded as of this writing, although the government announced during the recent State of the Nation Address that it has recently signed 30 projects for implementation and funding by the Department of Budget Management. None of the 30 projects have been awarded so far.

One of its projects, the Combat Utility Helicopter acquisition for 8 Bell 412EP helicopters, is the most advanced of the projects in terms of implementation schedule, with all 8 helicopters already in the Philippines but can't be considered complete until now because they are not yet commissioned with the Philippine Air Force. The other project, the F/SAA/LIFT acquisition wherein the project will be completed only by 2017.

Only the CUH acquisition has so far gained fruit of all the acquisition plans under RAFPMP RA 10349, as all 8 units of the Bell 412EP are in the country. But deliveries can't be considered complete until now because the PAF has not yet accepted all 8 units as of this writing.
Photo taken from Philstar.


To be fair to the Aquino administration, he has so far done more than the combined administrations of 3 past presidents before him. But as MaxDefense said in the past, the expectations from the public and the defense community was so high because it was Pres. Aquino himself who pegged the expectations to the public by his public announcements and promises. He raised it up with his promises of good governance, efficient, and corruption-free government.



With this, MaxDefense is offering this recommendation based on two problems encountered in the acquisition process: time or speed of acquisition, and corruption. The current system has so many loopholes to allow corruption to take place.


Speeding-up the AFP Modernization: Government-to-Government (G2G) Deals

With a limited time remaining, MaxDefense believes that the only way to improve the AFP in such a short time is by returning back to the option of acquiring excess defense articles from friendly and allied countries through Government-to-Government (G2G) process.

So far, several government agencies has already seen that the current system based on the RA 9184 Government Procurement Reform Act is not applicable for defense-related acquisitions. Moves have been made within the AFP and DND to push to Congress reforms that will enable them to bypass the RA 9184, as DND ASec. Patrick Velez confirmed in one report, "RA 9184 seems not to be fully responsive to the needs of the AFP".

Should any legal changes be made to exempt the AFP Modernization Program from strictly following RA 9184, it would then allow the DND and AFP to go for G2G deals with friendly countries.

Being G2G, the Philippine government can minimize or thoroughly avoid corruption and kickbacks by defense and military officials, as the Philippine government, through its defense department, officially deal directly with the defense ministry of the the seller/donor countries including payments and other financial issues. Corruption can probably only happen if the seller/donor country's defense ministry officials are also corrupt.



G2G of Refurbished Excess Defense Articles

Excess Defense Articles are currently abundant in several advanced nations from Europe, Asia, and the US. It may not be immediately available as expected due to the need to refurbish them and meet certain requirements of the AFP, which may take some time but not as long as constructing a new one.

But with the budget for the AFPMP and RAFPMP already allocated for projects, the only way to allow funds to flow to this direction is by either reallocating them from similar projects covered by the current AFPMP/RAFPMP, or by providing a separate budget for projects under this.

As an example, let's look at the current projects of the Revised AFP Modernization Program under RA 10349. The Philippine Air Force (PAF) requires Long Range Patrol Aircraft, while the Philippine Navy (PN) requires Frigates and ASW helicopters.

Currently, the DND and PAF wanted to pursue the acquisition of new aircraft while also discussing with Japan and the US to acquire EDA refurbished P-3C Orion maritime patrol aircraft. If there are no objections from these countries, then the DND should just push through with the procurement of the P-3C through G2G using the budget for the LRPA project. MaxDefense believes that the LRPA budget can acquire more than 2 fully equipped and newly refurbished P-3C Orion.

As for the Navy, acquisition of refurbished frigates from Europe, Korea or the US can be made. After repair and refurbishing, MaxDefense still expects the first ship to be in service earlier than constructing a new one. And with a Php18 billion budget, the PN can definitely acquire more than 2 frigates. The US is also offering refurbished SH-60B/F anti-submarine helicopters, which can be had for a portion of the PN's budget for each new ASW helicopter. Even countries with more financial capability like Spain bought these refurbished helicopters to fill in the requirements.

Instead of waiting for the South Korean government to grant it to the Philippines, the Philippines must offer to acquire EDA ships from South Korea, with the willingness to pay for them. MaxDefense believes than if acquired now, the ships could be in service by next year.
Photo of Ulsan-class frigate taken from warshipsimages.com




Procurement of New Equipment through G2G

Aside from EDAs, the government can also simultaneously acquire brand new defense equipment for projects meeting the medium to long term needs of the AFP. There's still nothing better than brand new if the need is less immediate. And this can be done also by G2G. Although it may not speed up the construction and delivery of new equipment, it can reduce the time needed during the planning and procurement phase, while also discouraging corruption within the DND and AFP. It is currently an accepted way of fast-tracking acquisitions by the DND as seen by the speed of delivery of the Bell 412EP and FA-50PH aircraft that underwent G2G.

If only most bid-ticket projects under AFPMP and RAFPMP can be shifted to G2G negotiations instead of bidding, MaxDefense believes that most of the projects can be completed and the equipment delivered earlier by at least several months up to a year earlier. 

This also avoids being too dependent on the decision to acquire a system because of cost parameters, as G2G ensures that the military can acquire specifically what they need. This procedure will allow the AFP to avoid getting cheap but possibly substandard or not really their top choice, as topnotch defense materiel are not normally cheap especially that the AFP prefer Western-made systems rather than the cheaper Eastern, Russian, of Chinese systems.

An example of where a tender has become disadvantageous over a G2G deal may include the Combat Utility Helicopter for the Philippine Air Force. Based on accounts with officers of the PAF, they actually prefer to acquire the Bell 412 as its next CUH. The specifications used on the tender was based on the Bell 412EP but some specific requirements were loosen up to allow other bidders to join the tender. We all know that AgustaWestland PZL won the project as they were the only one who can provide a similar helicopter at a lower cost than the budget allocated. And we all know what happened afterwards, until the DND decided to go G2G with the Canadian Commercial Corporation to acquire another batch of CUH, but this time acquiring the Bell 412EP.

Projects that have been awarded and are expected to have repeat orders should not undergo bidding as well, but by G2G deal. Among examples are the Harris Falcon II & III radios, the C-295M and NC-212i, and many others. An equivalent to these equipment are expected to be ordered in the next phases of the RAFPMP, and bidding won't help which may also derail standardization should another supplier and product wins next time.

Harris Falcon II and III radios were among those acquired by the AFP through Foreign Military Sales of the US government, which is essentially a G2G deal. Repeat orders were made for the past 7 years, with another major order made just late last year. More are expected to be acquired from Harris on the next phases of the Revised AFP Modernization Program.


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With the DND's procurement process already becoming less reliable and less acceptable to the general public and to the stakeholders in the government, the DND, if they still have some good men left, should push hard for reforms that would allow defense procurement to be faster and less prone to corruption.

Also, the legislative and executive branches of the government should act fast to pass a new or revised law to back-up the said changes. It is good to note that there are now some lawmakers who are putting their foot forward to help the AFP attain its goals even if it seems insurmountable due to the large amount of budget is needed to overcome their needs.




Monday, August 3, 2015

On Japan's entry into the West PH Sea disputes, China's apprehensions, and what it meant for the Philippines

MaxDefense is again pleased to have a good friend, eminent defense analyst and historian Prof. Jose Antonio A. Custodio, share his piece here in our blog pages, this time discussing historical background of Japan's militaristic past, its past conflicts with China and the rest of Asia, and why Japan's foray into the territorial issues in the West Philippine Sea could likely make China more concerned and furious against its longtime regional nemesis. 

Posting the entirety of the 3-part series altogether in a single entry, first published in Interaksyon.com starting last July 16, 2015. Photos were added by MaxDefense according to its own interpretation of Prof. Custodio's article. 


Japanese and Philippine warships in a joint naval exercise in the West Philippine Sea in 2015. More exercises between the 2 strategic partners are expected, with the strengthening of bilateral economic, defense, and political relations between the Philippines and Japan.
Photo taken from the Japan Ministry of Defense.

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Part 1: Japan in WPS: Beyond China evoking World War II atrocities:

Japan’s entry into the West Philippine Sea has been fully supported by the Philippines and vigorously protested by China. This action by Tokyo has revived memories of the Second World War as Beijing has been using the records of Japan’s transgressions and atrocities during the previous global conflict as propaganda to counter Japanese security initiatives in the region.

The Philippines, which ironically had been a country occupied by Imperial Japan, is now rapidly finding itself marching in step with what may turn into its strongest ally after the United States should anything formally be drawn up between Manila and Tokyo. It has also used the World War II past but not against the Japanese but against Beijing.

Philippine President Benigno S. Aquino III had stated that China has been acting very much in the same manner that Germany had been treating its neighbors in the 1930s leading to the outbreak of war in Europe. Oversensitive Chinese took exception to this declaration by the Philippine president overlooking the fact that what was compared was the similarity in the bullying tactics and unilateral actions of Germany with what China has been doing for the past decade and it was never alleged or claimed that the Chinese ruling elite were a bunch of murderous genocidal maniacs which the Nazis were.

Despite of course the fact that Beijing is systematically destroying Tibetan culture and Maoist tenets do have a tinge of genocidal tendencies itself as seen in the massive deaths caused by the Great Leap Forward in the 1950s and the Cultural Revolution in the 1960s.

The thing is, while everyone is harking back to the Second World War to warn about what either China and Japan are doing, one of the most essential factors that led to the outbreak of war here in Asia in 1941 seems to be overlooked especially by the Chinese.



China and Japan: It’s personal

For centuries, both China and Japan have been at each other’s throats.

In many instances the Korean Peninsula had been the real estate where the two squared off against each other.

However following the reclusive Tokugawa Shogunate, the newly modernized Japan fought and pulverized the armies of the decaying Manchu Dynasty and won the 1895 Sino Japanese War. The next decades would see Japan carve out territory after territory at the expense of China.

In 1910, Japan annexed Korea and in the next decade firmly established itself in Manchuria. This made war inevitable and it broke out after being instigated by Japan in 1937.

The brutality of that war has left a lasting impression on the Chinese and atrocities like the Nanking Massacre, the Burn All-Kill All-Loot All anti-guerrilla punitive operations by the Japanese and the notorious Unit 731 chemical and biological weapon experiments have never been forgotten.


A photo said to be taken during the Nanking Massacre (aka. Rape of Nanking) during the Second Sino-Japanese War in 1937. Although the event is now being questioned for its authenticity and accuracy, whatever the real numbers are, China still holds grudges against Japan for its humiliation and defeat by Japan.
Photo taken from topsecretwriters website. 


Following the war, Japan really did drag its feet in acknowledging and apologizing for its atrocities and it is indeed true that for every effort by Japan to extend remorse for its wartime past, there was an attempt within the country to justify the reasons why Japan went to war.

That obviously did not sit well with many Asian countries, most especially the Chinese. Those are the reasons why it had become personal between the two countries.



The trigger of World War II in Asia

As mentioned, Japan had been deeply involved in China following the undeclared Sino-Japanese War in 1937 and even much earlier than that, and the bulk of the Imperial Japanese Army was deployed in operations against the Chinese.

The Imperial Japanese Navy was also involved in the war with its warships and aircraft effectively conducting a blockade of China by seizing strategic ports and locations along the coast. Although the war was localized it was sending a chilling effect on the rest of the region and the Europeans and Americans took steps to ensure that its interests in Shanghai and Hong Kong were safe from any spillover from the conflict.

In June 1940 when the Germans vanquished the French, the Japanese sensed that France’s colonial possessions were ripe for the picking. After browbeating the Vichy French authorities to accept Japanese military presence in Indochina, Tokyo then began establishing bases in that French colony. Simultaneously, the Japanese entered into the notorious Tripartite Agreement with Rome and Berlin and became a member of the Axis alliance. These two actions were the straws that practically broke the camel’s back for Washington and London. Economic sanctions were immediately called for by the Americans against the Japanese. The British together with the Western European governments in exile supported that US initiative and a crippling economic blockade of strategic materials such as rubber, metals, and most especially of oil was imposed on the Japanese.

As Japan had no such resources, this embargo would have a devastating effect on Tokyo’s national interests. Japan’s war leaders were now in a dilemma. Should they buckle under the pressure of the Americans and Europeans and cease their operations in China and lose face in the process, or should they continue with the war and run out of the means to conduct it?

For quite some time, the Japanese high command was undergoing a debate as to which front to expand next as there were those who favored concentrating against the Soviet Union while others cast covetous eyes on the rich possessions of the colonial powers in Southeast Asia. Following a series of defeats against the Soviet Union at Mongolia in the late 1930s, and the pressures and demands of the war in China, the focus shifted towards the colonies at Southeast Asia. Now with the US led embargo in full effect against Japan, the capacity for the Japanese military to conduct operations was measured in several months before oil and other essentials run out. The plan then was to strike southwards and conquer the rich colonies there. The trigger then that started the war for Japan was the reality of being starved to submission by the economic embargo.


The US embargo of critical war materials in 1940 brought almost brought Japan to its knees, and made it realize that it needs to strike fast and capture alternative sources of resources and control of trade routes. If China keeps control of the West Philippine Sea based on its so-called historical claim, Japan might be brought back to the same condition. History shows that Japan won't hesitate to act fast if this happens to her.



Part 2: The strength of Japan: the second type of island-nation mentality:

There are two types of island nations. The first is the type that, because of its isolation brought about by the seas surrounding it, tends to look inward and have little or no comprehension of external developments. The second is the type that seeks to go beyond the seas that confine it and in the process build large empires whether by conquest or economic activity.

Japan is the latter type of island nation and is very similar to the United Kingdom in that regard. The Japanese view the sea lanes as fundamental for their national survival as commerce, vital to the viability of their economic life, and depend on its unhampered flow into and out of Japan. No ifs or buts about that.

Hence, China as a nation located in the Asian mainland may have difficulty in understanding that very fundamental aspect of Japan’s existence as a powerful maritime nation state, which had already caused it to go to war 70 years ago. Simply put, one cannot mess around with Japan’s contact with the outside world and get away with it.

While postwar Japan strove to learn the lessons of the Second World War by embracing peaceful economic development, it also created a powerful naval capability that would check the Soviet Union’s submarine force during the Cold War - this, in order to avoid a repeat of its disastrous experience when the United States strangled the Japanese through prewar economic sanctions and the wartime naval and submarine blockade.

In fact, former officers of the Imperial Japanese Army and Imperial Japanese Navy joined the newly established Japan Self Defense Force ensuring that lessons learned during the war years would remain codified in the new military organization. One such individual was Minoru Genda, the officer who planned the air assault on Pearl Harbor. After the war, he joined the Japan Air Self Defense Force and became its commanding general from 1959-1962.


Even with its purely defensive policy, Japan maintained a large, modern, well equipped and well trained naval and coast guard forces to safeguard their trade lifelines, exclusive economic zones, and be ready to project power if needed. That is expected to increase further now that Japan has allowed its self defense forces to act like a normal armed forces.


On the other hand, these very lessons of the Second World War seem to have been forgotten by China in its haste to establish suzerainty over this part of the world; and it seems to have not properly assessed the Japanese response to what it is doing in the West Philippine Sea.

Many observers and analysts fail to realize that Japan is a nation composed of several large island groups that has a deep and historical appreciation of the maritime domain and its role in the country’s survival and viability as a powerful and influential state. This has been a recurring theme in Japan’s history from the 19th Century onwards, and felt very keenly by the Japanese during the Second World War. Just like Great Britain which 19th Century Japan looked up to as a model worth emulating, the Japanese first attempted to establish a traditional empire that ended with the disaster of the Second World War; and, following that, an economic empire: both attempts required a strong maritime tradition and capability to protect and advance their interests.

However, by the tailend of the Cold War, Japan could already see the handwriting on the wall regarding United States presence in the Asia Pacific, and since the late 1980s it began modernizing its power projection capabilities.

The first indicator of that was the appearance of a new type of vessel in the Japan Maritime Self Defense Force, the LST 4001 Osumi in 1995. Although the Japanese made great effort to explain the ship as a Landing Ship, it somewhat resembled a small aircraft carrier with its flat deck and island superstructure. Japan built three vessels of this type.


The JDS Osumi, a landing ship tank with a flat deck, of the Japan Maritime Self Defense Force (JMSDF). Japan has 3 of this type of vessel in its inventory and are considered as LST.
Photo from seaforces.org.


In the early 1990s, the Japanese military was already participating in peacekeeping operations in Cambodia and this, too, was another indicator of Japan’s increasing shift toward projection of forces as such activities familiarized Japan with operations outside of the Home Islands and in the logistic needs for such.

The last time the Japanese had projected their forces was in 1945 and there was a lot of catching up to do.

By the 21st Century, Japanese combat aircraft were being deployed further and further away in exercises with their American ally in the Pacific region. Then in 2006, the Japan began the construction of DDH 181 Hyuga.

Hyuga on the day of its launch was the biggest warship in the JMSDF; although it looked like an aircraft carrier and approaching the size of a World War 2 era fleet carrier, it was designated as a destroyer. This then made it the largest destroyer in the world at 646 feet in length, and Japan built two and named the later one DDH 182 Ise.


The JDS Hyuga, which was described by the Japanese as a helicopter destroyer. But it closely resemble a helicopter carrier. The JMSDF has 2 of these ships.
Photo taken from seaforces.org.


The names Hyuga and Ise were once carried by two battleships of the Imperial Japanese Navy that entered service in World War I and saw extensive combat in World War II and were both modified as hybrid battleship/aircraft carriers.

DDH181 and DDH 182, however, both lost the distinction of being the largest “destroyers” afloat when Japan commissioned the DDH 183 Izumo in 2015 that, again, despite it being designated as such, had all the appearances of an aircraft carrier. At 814 feet in length, it is also as large or if not larger than many World War II-era fleet carriers, thus making it theoretically possible to operate fixed-wing aircraft if modified with a ski jump and with the flight deck reinforced.

Although Japan is part of the consortium that is developing the Lockheed F-35 Lighting II and has agreed to order 42 of the F-35A variant, should it opt in the future for the B variant - which is the Vertical and Short Take Off model - then it will really raise suspicions about the true intention of all these flat decks in service with the JMSDF.


The JDS Izumo, currently Japan's largest warship, which closely resemble an aircraft carrier and is even larger than some fleet carriers of the Imperial Japanese Navy of the past. Technically, the JMSDF has 3 aircraft carriers as of now, and is building another Izumo-class ship.


What the reefs represent for Japan:

When China declared an Air Defense Identification Zone (ADIZ) that swallowed up the East China Sea, Japan was one of the countries that vigorously protested. Each time Beijing did a provocative action, the Japanese did not flinch from facing off with them.

Today, Chinese incursions into Japanese airspace have so become a regular occurrence that the Japan Air Self Defense Force maintains a round-the-clock alert status in areas the Chinese aircraft regularly intrude into. China - no longer Russia - is effectively the number one violator of Japan’s airspace.

Now that China has undertaken an artificial island construction spree at the West Philippine Sea - something only the most naïve or the most treasonous will view as anything but military outposts designed to curtail and control movement into the area and to project Chinese military power - the impact of this to Japan is not something that is hard to guess, as all these lie astride Japanese shipping.

Of course, the Japanese are aware of the Chinese First and Second Island Chain strategy, but it is doubtful that they will wait for that to transpire before they take any action.


The illustration above shows the crude oil trade flows in the South China Sea/West Philippine Sea as of 2011. All crude oil from the Persian Gulf, Africa and other countries west of Japan passes through the disputed waters. A Chinese control on these waters could be devastating for the Japanese , thus their interest in keeping the area check from Chinese domination.
Photo taken from the US Energy Information Administration.




Part 3: Why China is apprehensive about Japan's entry into the West Philippine Sea:

In 2014, Japanese Prime Minister Shinzo Abe led a Cabinet decision to lift Japan’s restrictions on the use of force overseas. This is the concept of collective self-defense which although being challenged by the political opposition is being used as a means to eventually redraw the Japanese Constitution. The collective self-defense concept contains three conditions which are as follows:

The first is in a case where a nation with close ties to Japan comes under attack and the lives, freedom, and right of Japanese nationals to pursue happiness are clearly endangered. The second condition specifies that force may be used only if there is no other effective way to protect the lives of Japanese citizens. The final condition is the limitation of the use of force to the minimally required level. These standards open up the way for Japan’s Self-Defense Forces, under certain conditions, to aid an allied nation that is under attack, even if Japan itself is not.

Since then the Japanese have ramped up not only their government to government contacts with the countries in dispute with China in the West Philippine Sea, but they are also working to become a regular and strong presence in the area. Consider that the Japanese Maritime Self Defense Force has conducted two exercises with the Philippine military within the month while at the same time it is widely reported that a maritime patrol aircraft will be provided to the Philippines by Japan.

A Memorandum on Defense Cooperation and Exchanges was signed between the two countries on January 2015 which set the stage for Japanese activities with their Filipino counterparts that ranges from exercises to assistance programs. By June of 2015, the maritime agencies and navies of the two countries had undertaken two joint exercises which underlie the rapid manner in which the defense and security relationship between Tokyo and Manila is developing.

Just to put emphasis, prior to those two exercises, there was practically no activity between the two militaries. The last one between the two was in 1945, and both the Filipinos and Japanese were trying to kill each other! In fact, it can be said that Japan’s current activities in the Philippines have the potential to approach the level of the security relationship that Manila has with Washington DC.



The Japanese mindset: not a puppet of the Americans:

Conventional thinking has it that the Japanese are a cog in the grand plans of the United States in the region and that Japan is a puppet of the US. That would be an oversimplification of the relationship between the two countries and disregards the fact that Japan, just like the Philippines and Vietnam, is a frontline state against China’s territorial ambitions and considers the situation a clear and present danger and a direct threat to its survival.

That situation then creates the favorable climate upon which the lessons of history and the historical experience of Japan will come to play.

Many analysts tend to view Japan’s posture as either the effect of ultranationalism or as being subordinate to Washington DC, as if the survival of Japan is only the preserve and concern of so called ultranationalists and puppets of the US. It definitely is not.

Ultranationalism or unabashed pro-Americanism will not spur the construction of aircraft carrier type ships in the JMSDF, and it would also not be the driver for Japan’s reaching out to countries in the region to establish a coordinated multinational effort to face China.

Given the experience of Japan during World War II, it is safe to assume that the destructive air and naval blockade that the United States imposed on the Home Islands during that conflict would leave an indelible mark in the minds of generations of Japanese national security policy makers and military planners.

These people are the architects responsible for building and reorienting the Japanese military through the past decades to its current state, which is now benefiting the current term of Prime Minister Shinzo Abe and is allowing the Japanese government the capability to respond decisively to China’s ambitions now and in the years to come.

With that traumatic historical experience at the back of their minds, and the fact also Japan is a frontline state, it may just turn out to be more forceful than the US in asserting its agenda and interests in the region especially when it comes to facing off against China.

China’s achieving its strategic goals as becoming the dominant power in the region will not sit well with Japan as it will result in it becoming a subordinate state to Beijing. That will not be in the national interest of Japan.

Thus Japan will most likely push back against China with or without US support as it not only has the economic capability to stand up to pressure from Washington DC should the leadership there become less sympathetic to Tokyo, but it also has the military capability to do unilateral actions. Which is probably why Chinese political and military officials are very apprehensive of Japan’s entry into the West Philippine Sea.

Hence it will be in Japan’s interests that countries like the Philippines that are sympathetic to it or have common issues against China be made capable of spreading Chinese capabilities thin so as to cause Beijing to limit itself to occupying a few artificial islands and nothing anymore grander than that as a reminder of its folly of trying to take on so many opponents at once.

What China has to realize is that it has stirred up a hornet’s nest in its actions against Japan. Although China has used history by raising Japan’s atrocities during and before the Second World War as a means to drive a wedge between Tokyo and countries that had once felt the boot of Japanese imperialism, what it forgets is that in modern and contemporary history, the Japanese have never lost a war against the Chinese.

China cannot claim to have won the war against Japan during World War II when it was ultimately Russian forces that destroyed the Japanese Kwantung Army in China. That fact provides a very strong psychological boost for the Japanese against the Chinese.

Contrast that with the defeatism and feeling of inferiority so prevalent among many Filipinos when it comes to dealing with China as a regional power.


Although considered as one of the strongest bilateral partnerships, the Japanese would not allow the Americans to be completely in control, and has started distancing itself from the policies the Americans implemented as part of Japanese defeat in World War 2. Push comes to shove, with or without American support, Japan would assert itself against China using its own capacity.


What now Philippines?

Although it is an oft repeated statement that each country is guided by its own national interests, the question that needs to be asked is if the Philippines truly understands the undercurrents that shape Japanese strategic perceptions and objectives.

Does Manila really understand how far the Japanese will go to defend their interests and that throughout history the Japanese - when they feel besieged - have the ability to strike out without warning against an enemy?

Consider that in the span of a few decades, Japan has carefully built up its power projection capabilities and modified its security outlook to engage and defeat threats way before they reach Japanese shores. That in a span of a few years, from a strict assistance program limited to aid to the Philippine Coast Guard and others of a civilian nature, Japan is now emerging as a potential provider of military assistance to Manila.

The Philippines has to realize that it is not dealing with a dithering easily distracted ally like the United States of America, but a country that has a suppressed martial tradition that may just reappear due to China’s rapacious territorial ambitions.


Philippine Navy frigate BRP Ramon Alcaraz (left) and Japanese Maritime Self Defense Force destroyer JDS Hatakaze during KAKADU 2014 exercises off Australia.
Photo taken from Australian Navy.