Rocket Launcher Light Phase 2 Acquisition Project of the Philippine Army

To further improve the firepower of infantry units while replacing ageing existing assets, the Philippine Army embarked on the acquisition of more rocket-propelled grenade launchers to follow on with the success of the initial batch acquired from Bulgaria starting 2016.

The Rocket Launcher Light Phase 2 Acquisition Project of the Philippine Army was among those approved for implementation in 2013 as one of the nine original projects for the Philippine Army under the Horizon 1 Priority Projects of the Revised AFP Modernization Program (RAFPMP).

A Russian-made RPG-7V2 rocket propelled grenade launcher. Photo taken from the collection of Vitaly V. Kuzmin.

Project Summary:

Rocket Laucher Light (Phase 2) Acquisition Project:

Note: Edited as of 14 July 2019.

* End User: Philippine Army (multiple units)
* Quantity: 744 units total plus unspecified quantity of ammunition
* Modernization Phase: Horizon 1 Phase Priority Projects of RAFPMP
* Project ABC: Php408,000,000.00
* Acquisition Mode:
  - Planned: Government-to-Government (G2G) Procurement with the Russian Government through Rosoboronexport.
  - Actual: Direct Commercial Sale with an unnamed Russian company not related to Rosoboronexport.                                 
* Source of Funding: GAA Funds through AFP Modernization Program Trust Fund
* SARO Release: SARO-BMB-D-18-0013668 dated 13 June 2018
* Winning Proponent: 
   - Planned: Rosoboronexport (Russia)
   - Actual: unnamed company (unknown origin)
* Product for Delivery: 
    - RPG-7V2 rocket propelled grenade launcher
    - Unspecified number and type of RPG ammunition
* Contract Price: Php408,000,000.00
* First post by MaxDefense: 05 November 2016
* MaxDefense Searching Hashtag: #PARLLPhase2Acquisition
* Status: Sources confirmed as delivered as of 18 July 2019, already in possession by the Philippine Army.

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U P D A T E S:
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05 November 2016:

In a Facebook Note we posted, we included the Rocket Launcher Light Acquisition Project as among those included in the Horizon 1 phase of the Revised AFP Modernization Program (RAFPMP). This is actually the Phase 2 of the project, as the first phase was actually the one approved for acquisition under the last phase of the old RA 7898-based AFP Modernization Program between 2005-2010.

The note can be accessed on the link below:

"Monitoring of Philippine Army’s Horizon 1 Phase Projects" - first posted 05 November 2016

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14 June 2018:

As posted on MaxDefense's community social media page:

The Department of Budget & Management (DBM) approved yesterday 13 June 2018 a new SARO (SARO-BMB-D-18-0013668) worth Php408 million pesos for funding the Rocket Launcher Light Acquisition Project under the Horizon 1 phase of the Revised AFP Modernization Program.

This project involves the acquisition of 744 units of shoulder-fired Rocket Propelled Grenade (RPG) launchers from Russia's Rosoboronexport under a Government-to-Government (G2G) deal between the 2 countries. This is the same deal which was signed by Defense Sec. Delfin Lorenzana and Rosoboronexport last October 2017, as reported by Russian news outlet TASS ( http://tass.com/defense/972228 ). 

This is also the first time that the Philippines will actually buy arms from Russia, since the AKM rifles and Ural trucks received last year were actually donated by the Russian Government.

This project is actually an extension of the Rocket Launcher Light acquisition project made under the old AFP Modernization Program RA7898 which led to the acquisition of around 250 units of ATGL RPGs from Arsenal JS Co. of Bulgaria through the US Foreign Military Sales program.

Despite the project only approved for fund release yesterday, this project is actually a Horizon 1 project (which can be confirmed in the SARO listing itself) which was approved for acquisition by the previous administration.

The updated SARO list can be downloaded in the link below:

https://www.dbm.gov.ph/index.php/programs-projects/special-allotment-release-order-saro

A Russian soldier with an RPG-7V rocket propelled grenade launcher. Credits to original source of photo.

The line on the SARO list showing the SARO provided for the RLL Phase 2 Acquisition Project. Screenshot taken from DBM's SARO list for 2018.

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29 July 2018:

As posted on MaxDefense's social media page:

It now appears that the Php408 million deal to acquire 744 RPG-7V from Russia's Rosoboronexport may be affected by the US government's new policy of sanctioning countries that acquire arms from blacklisted Russian companies, which includes Rosoboronexport. This acquisition is part of the Philippine Army's Horizon 1 phase of the RAFPMP.

Surprising that this might be affected considering the deal was signed in October 2017 before the new policy was imposed by the US, and the contract price is very minimal at around US$8 million only, which isn't considered a major defense deal. 

Nonetheless, is it really worth the risk pushing through and facing economic sanctions from a major trading partner and ally? Also, considering that the deal is actually overpriced anyway according even to some senior DND officials whom we got our info from. They are again pointing at the same DND officials involved in the frigate deal with HHI as the one involved in this RPG-7B acquisition from Russia. Fishy if you ask me.

MaxDefense made a check with some RPG suppliers that we know, and here is a comparison: each RPG-7B from Rosobornexport costs around Php548,000, since the deal does not involve ammunition. At least 2 RPG suppliers confirmed to MaxDefense that they can sell one with similar or prpbably even better quality for more or less Php200,000 each. It means we can buy 2 RPGs and atill have change for every RPG-7B from Rosobornexport. What's the point of buying from Russia if its expensive anyway?

Here is the full script of the report from Reuters.

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Exclusive: Philippines could breach U.S. sanctions if Russia arms deal proceeds

Manuel Mogato  - Reuters

MANILA (Reuters) - The Philippines is at risk of breaching sanctions imposed by the United States if it proceeds with the purchase of grenade launchers from a blacklisted Russian firm, a deal that could test its longtime security alliance with Washington.

A senior Philippine general familiar with the deal said Manila had agreed in October last year to a 400 million peso ($7.48 million) purchase of 750 RPG-7B rocket propelled grenade launchers from Russia’s state-owned Rosoboronexport, but the transfer had yet to be completed.

U.S. sanctions were imposed last year against any country trading with Russia’s defense and intelligence sectors.

The law is designed to punish Russia for its 2014 annexation of Crimea from Ukraine, its support for Syria’s government and alleged meddling in the 2016 U.S. presidential election.

Russia has donated assault rifles and trucks to the Philippines but the grenade launchers would be Manila’s first purchase of Russian weapons. The Philippines has long relied on the United States as its main source of military hardware and support.

If it goes ahead, the deal could add strain to a nearly 70-year-old security alliance that Washington has described as “ironclad”, despite Philippine President Rodrigo Duterte’s disdain for the relationship with the former colonial power.

Duterte wants closer ties with China and Russia and has ordered the army and police to engage with countries which do not impose conditions on weapons sales. Some U.S. legislators campaigned to block sales of 26,000 assault rifles to the Philippines in May 2017 because of human rights concerns over an anti-narcotics campaign that has killed thousands of Filipinos.

Duterte scrapped that deal, as well as the purchase of $233 million worth of Canadian helicopters, over concerns by the sellers about how they would be used.

A U.S. State Department official said foreign governments and private sector entities had been put on notice that “significant transactions with any of the 39 listed entities will result in sanctions”. Rosoboronexport was blacklisted in April.

American allies who buy weapons and equipment from Russia, the world’s second-largest arms exporter, would also be penalized and could see the transfer of those arms disrupted.

The State Department official declined to say what specific sanctions the U.S. could impose on the Philippines if it goes ahead with the deal with Rosoboronexport, while a spokesman for the Treasury Department said it “does not telegraph sanctions or comment on prospective actions.”

A senior Philippines defense official, who requested anonymity because he was not authorized to speak to media, told Reuters the United States has not officially notified Manila about the restrictions on Rosoboronexport.

“It’s still a go until we are informed,” he added.

The army general familiar with the deal declined to comment on possible sanctions.

Jose Antonio Custodio, a Philippine security expert, warned the Russian arms deal may affect Manila’s security relations with allies, not only with its former colonial master the United States, but also with Japan and Australia.

“If the Duterte administration keeps on elevating the military-to-military relationship with Russia, it may lead to push back from these allies given international sanctions on that country for bad behavior,” he said.

Editing by Martin Petty and Raju Gopalakrishnan

https://www.reuters.com/article/us-philippines-defence-usa-russia-exclus/exclusive-philippines-could-breach-u-s-sanctions-if-russia-arms-deal-proceeds-idUSKBN1K817L

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21 July 2018:

As posted on MaxDefense's community social media page:

Still regarding the acquisition of 744 units of RPG-7B rocket propelled grenade launchers by the Department of National Defense (DND) from Russia's Rosoboronexport to fulfil the Rocket Launcher Light acquisition project of the Philippine Army under the Horizon 1 phase of the RAFPMP.

Below photo taken from an DND RAFPMP Status Report used during a Senior Leaders Meeting last year shows that the RPG-7s acquired by DND from Bulgaria's Arsenal JS Co. numbered 250 launchers and 3,272 rounds of assorted HE and HEAT ammunition with a total worth of Php81,726,230.00. 

In simplistic calculation, for every 1 RPG launcher and 13 rounds of RPG ammunition, the DND paid Php326,905. These are the same RPGs used by the Philippine Army during the Marawi campaign.

For the ammo round price, we'll take this from PhilGEPS website which posted a bidding for RPG rounds acquisition for the Philippine Army. Based on the upcoming bidding for RPG ammo, the cost of High Explosive (HE) RPG round may cost around Php249,000,000 for 31,150 rounds, or an average of Php8,000 each. For for 13 units of HE rounds, it will cost around Php104,000.

If the cost of the Bulgarian deal averages at Php326,905 per launcher including 13 rounds, it means the launcher's average price is approximately Php222,905 each. This is within the quoted price provided by suppliers to MaxDefense earlier, which is between Php189,000 to Php240,000 each depending on the supplier. Not bad actually.

As I mentioned earlier, the Russian deal with DND is worth Php408,000,000 for 744 units, or an average of Php548,387 for each Russian RPG-7.

Do the calculations yourself people. Make your own assessment based on these amounts. Its quantifiable if you know simple math.

This is the report on the Phase 1 of the Rocket Launcher Light Acquisition Project. One can use this as basis on pricing of RPGs + Ammunition, compared to the Phase 2 which was awarded to the Russians. Photo taken from DND report exclusively provided to MaxDefense.

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14 July 2019:

MaxDefense received information last week on the impending arrival of RPG-7s from Russia within July 2019, despite Russia not receiving any form of payment yet from the Philippine government due to banking issues related to CAATSA.

It also appears that the Philippine and Russian sides will discuss further on how to settle the issue of payments, with among those mentioned to MaxDefense includes using Euros instead of US dollars for payment and involvement of a 3rd party European bank.

MaxDefense posted a blog entry on the topic, which can be found on the link provided below. 

"Russian-made RPG-7V2 rocket propelled grenade launchers for delivery to PA soon" - first posted 14 July 2019.

An RPG-7V2. Photo taken from the collection of Vitaly V. Kuzmin.

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21 July 2019:

Apparently the "delivery coming soon" actually happened already recently. The shipment was said to have arrived in a port somewhere in Luzon which MaxDefense won't name, and were already transported to the Philippine Army's storage yards for inspection, audit and distribution to Philippine Army units.

Good news is that the Philippine Army units will now be getting their hands on RPGs to replace the 90mm recoilless rifles soon.

But here's the bad news:

MaxDefense received new information that still needs further verification that the RPGs delivered recently to the Philippine Army were not from Rosoboronexport as believed, and that the DND actually awarded the contract to a private company, to the dismay of Rosoboronexport.

It was also mentioned that Defense Sec. Delfin Lorenzana thought that this private company was part of Rosoboronexport, when in fact the comapny is not in any way connected to Rosoboronexport nor to the Russian government. And the worse part it, Sec. Lorenzana signed the contract believing it was for Rosoboronexport.

MaxDefense is still trying to get more information on what's happening, since it appears that there are many other issues surrounding this deal, and that Sec. Lorenzana was really so mad with what happened according to DND sources.

So who supplied the RPGs??? MaxDefense is still trying to get more information as we received more confirmation just before we posted this. Stay tuned.

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First edit and release: 14 July 2019
Copyright MaxDefense Philippines