Completed Modernization Projects of the Armed Forces of the Philippines for 2017 - A Summary (Part 1)

For the AFP Modernization Program, the start of 2018 actually means two things. First, the Horizon 1 Phase of the Revised AFP Modernization Program has officially ended. And secondly, the new year also marks the beginning of the Horizon 2 Phase of the same program.

MaxDefense was not able to make a year-ender before the New Year of 2017, but we promised readers that we will be providing more for the start of 2018. And that means aside from a year ender to discuss what defense projects were completed for 2017, MaxDefense will also be discussing the status of procurements of ongoing and impending modernization programs as of the end of 2017, for both the Revised AFP Modernization Program (RAFPMP) Horizon 1 phase under RA10349, as well as from the original AFP Modernization Program (AFPMP) under RA7898.

An FA-50PH of the Philippine Air Force in a ground display.
Credits to owner of photo.

Difference of AFPMP RA7898 and RAFPMP RA10349:

Despite the discussions MaxDefense has made for the past 4 years, there still appear to be confusion for some of its readers on the difference of the modernization programs of the AFP. So here we are again explaining as it is relevant in this blog entry.

For those still unfamiliar with the difference, the AFP Modernization Program (AFPMP) under RA7898 was the original modernization program conceived during the Ramos administration and covers 15 years from 1995 to 2010. It was divided into 3 phases of 5 years each. By 2011, many projects from this program were still ongoing, or has not even started yet due to, but not limited to funding and planning issues, among others. 

Meanwhile, the Revised AFP Modernization Program (RAFPMP) under RA10349 was the approved 15-year extension of the earlier program and was conceived during the administration of Benigno Aquino III, and will cover the years 2013 to 2028. Like the AFPMP, the RAFPMP was also divided into 3 phases of 5 years each, which are more known by the term "Horizon" phases. Currently we are now at the Horizon 2 phase which runs from 2018 to 2022.

While officially we are now at RAFPMP Horizon 2 phase, there are still several projects from both AFPMP RA7898 and RAFPMP H1 RA10349 that are still ongoing or impending due to many reasons, and would be implemented simultaneously with Horizon 2 projects.

Completed Projects as of 2017:

The past year was the first time the DND, lead by Defense Sec. Delfin Lorenzana, was run completely in an entire year by officials appointed by Pres. Duterte, although all completed deliveries were actually projects that were initiated by the previous DND team lead by former Defense Sec. Voltaire Gazmin under the administration of Pres. Aquino.

AFP Modernization Program under RA7898:

For the AFP Modernization Program under RA7898, the Department of National Defense and Armed Forces of the Philippines completed 11 projects - 5 for the Philippine Army, 4 for the Philippine Navy, and 2 for the AFP General Headquarters.

For the Philippine Army, the completed projects are as follows:

1. Force Protection Equipment:

Originally awarded to local company Talon Security Consulting & Trade Ltd. using body armor and vests from Um Merkata DOO of Serbia, the deal did not proceed smoothly as their product was not accepted by the Philippine Army for apparently failing to meet technical specifications, specifically the armour plate. It was later restarted as a Negotiated Contract Take-Over project, and awarded to another bidder, MKU Ltd. of India, which received a contract worth Php120.435 million in 2016, and completed delivery of 3,480 body armor as of 2017. Many of these were used during the Marawi City crisis by different Army units, which we commented back then as "uncomfortable to use" according to the accounts of several ground troops due to its unconventional design.

Previous discussions on the link below:

http://www.dnd.gov.ph/transparency/procurement/DND_BAC/2017/NTP/NTP%20-%20Force%20Protection%20Equipment%20Project.pdf

http://maxdefense.blogspot.com.au/2014/08/israeli-firm-confirmed-winner-for-force.html

https://www.facebook.com/Maxdefense/posts/437719789732017?locale2=en_GB

2. 155mm Towed Howitzer with Ammunition:

A joint acquisition with the Philippine Navy (Marine Corps), and was acquired via a Public Bidding. A contract worth Php410.849 million was awarded to Elbit Systems Land & C4I to supply 12 units 155mm Towed Howitzers plus associated ammunition, with 6 howitzers each to the Philippine Army and Philippine Marine Corps. Elbit Systems delivered the Soltam M-71 155mm Towed Howitzer in 2 batches and was completed in 2017.

Previous discussion on the link below:

http://maxdefense.blogspot.com.au/2017/06/delivery-of-elbit-soltam-m-71.html

https://www.facebook.com/Maxdefense/photos/pcb.598582936979034/598582876979040/?type=3&ifg=1

One of the Soltam M-71 155mm towed howitzer bound for the Philippine Army being tested in the Negev Desert in Israel before it was delivered with several other units.
Photo exclusive to MaxDefense Philippines.

3. 40mm Grenade Launcher:

This project is a Foreign Military Sales with the US government. Based on previous documents obtained by MaxDefense from the DND, there were 2 phases on this project: Phase 1 with a contract worth Php188 million is for 2,200 units of M203 grenade launchers, while Phase 2 with a contract worth Php61.56 millionis for 684 units of M203 grenade launchers. All will be supplied and delivered by Airtronic USA.

Based on our information, only Phase 1 was completed in 2017, while Phase 2 is still in the Contract Implementation Stage and could be ready for delivery by 2018. These grenade launchers are to be installed on the Philippine Army's Remington R4A3 rifles. Many were seen in use during the Marawi City crisis by different Army units.

Previous discussion on the link below:

https://www.facebook.com/Maxdefense/photos/pcb.425123680991628/425123670991629/?type=3

https://www.facebook.com/Maxdefense/posts/531673747003287

https://www.facebook.com/Maxdefense/posts/496518000518862

One of the M203 40mm grenade launchers during handover by the US government to the Philippine Army.
Photo taken from US Embassy to the Philippines' website.

4. Rocket Launcher Light with Ammunition:

Despite the ATGL-L (RPG-7) launchers and system supplied by Bulgarian arms company Arsenal JSCo., this project is actually another Foreign Military Sales (FMS) project with the US government. With a contract amount of Php81.7 million, 335 units plus ammunition were delivered to the Philippine Army, with several units used by the Army's Special Operations Command during the Marawi City crisis.

Previous discussion on the link below:

http://maxdefense.blogspot.com.au/2017/07/philippine-army-finally-receives-atgl-l.html

http://maxdefense.blogspot.com.au/2014/01/rpg-7usa-for-philippine-army.html

https://www.facebook.com/Maxdefense/posts/574151382755523

A Philippine Army trooper firing an ATGL-L RPG during the Battle of Marawi City.
Screengrabbed from GMA News 24 Oras.

5. Upgraded M113 Armored Vehicle Acquisition:

Awarded to Elbit Systems Land & C4I under a Php882 million Government-to-Government contract with Israel, this project involves the supply and delivery of 28 upgraded M113A2+ tracked armored vehicles divided into 3 lots: Lot 1 for 14 M113A2+ upgraded and converted to Fire Support Vehicles using L23A1 76mm guns and turrets from retired Scorpion reconnaissance vehicles of the Philippine Army's Mechanized Infantry Division; Lot 2 for 4 M113A2+ converted to Infantry Fighting Vehicles installed with Elbit's UT-25 unmanned turret with 25mm cannon, and Lot 3 for 6 M113A2+ Armored Personnel Carriers installed with Elbit's Dragon 12.7mm Remote Controlled Weapon System (RCWS) and 4 M113A2 armored recovery vehicles.

All the M113A2s were former Belgian Land Component units and were While Lots 2 and 3 were delivered in 2015, Lot 1 was only completed and delivered in batches in 2017. These armored vehicles were responsible for the death of ISIS-inspired Maute-Abu Sayyaf terror group leaders Isnilon Hapilon and Omar Maute.

Previous discussion on the link below: 

http://maxdefense.blogspot.com.au/2015/04/questions-answered-on-erroneous-reports.html

https://www.facebook.com/Maxdefense/posts/425808627589800

https://www.facebook.com/Maxdefense/posts/244475205723144

https://www.facebook.com/Maxdefense/photos/a.119059604931372.1073741828.117625771741422/316850935152237/?type=3

One of the upgraded M113A2+ tracked armored vehicles armed with a UT-25 unmanned turret, as displayed on Elbit System's booth during ADAS 2016.
Photo shared to MaxDefense by a MaxDefense community member.

For the Philippine Navy, the completed projects are as follows:

6. 7.62mm Sniper Rifle:

Not much details were made available to MaxDefense although it is believed to involve the acquisition of more Remington 700 or M40A3 sniper rifles from the US. MaxDefense believes that this is the one the US delivered last February 2017. The project is also a Foreign Military Sales (FMS) project with the US government.

Previous discussion on the link below:

https://www.facebook.com/Maxdefense/posts/496518000518862

7. 155mm Howitzer with Ammunition:

As discussed earlier, the Philippine Marine Corps received 6 units of Soltam M-71 155mm Towed Howitzer from Elbit Systems Land & C4I in a joint acquisition with the Philippine Army. Please see Item #2 for more details.

Previous discussion on the link below: 

http://maxdefense.blogspot.com.au/2017/06/delivery-of-elbit-soltam-m-71.html

8. Strategic Sealift Vessel:

A contract worth Php3.864 billion was awarded to Indonesian state-owned shipbuilder PT PAL (Persero) in 2014 after winning a Public Bidding, and involved the supply of 2 Landing Platform Docks based on the company's Banjarmasin-class LPD. The ships, now collectively called the Tarlac-class LPD, were named BRP Tarlac (LD-601) and BRP Davao del Sur (LD-602).

The project was completed in 2017 after the delivery of BRP Davao del Sur. Both ships were instrumental in bringing in troops, materiel, supplies and relief goods during the Marawi City crisis as well as during HADR operations.

Previous discussion on the link below: 

http://maxdefense.blogspot.com.au/2016/05/discussing-philippine-navys-first-ssv.html

https://www.facebook.com/Maxdefense/posts/542083292628999

BRP Tarlac (LD-601), the lead ship of the Tarlac-class Landing Platform Dock of the Philippine Navy as it enters the Philippines during delivery from PT PAL shipyard in Indonesia.
Photo taken from Phlippine Navy's FB page.

9. Light Armor System Upgrade (LARSU) Firepower Upgrade:

This involves the improvement of the weapon system for 4 of the Philippine Marine Corps' V-150 Wheeled Armored Vehicles by improving their gun turrets, guns and optics, aside from usual repair and rehabilitation works on the vehicles. A contract was provided to Indian company Larsen & Toubro worth Php34.5 million for the said works, which were completed in 2017.

Meanwhile the General Headquarters, AFP saw the completion of two projects, which are:

10. First Forward Medical Emergency Deployable Intermediate Care System (MEDICS):

A project under the AFP Medical Center. The unit was established to provide quick medical support in HADR and civil defense operations. This project originally did not appear on our project lists although it is considered an AFP Modernization Project under RA7898.

More information can be found in this outside source: 

https://redjourno.wordpress.com/2016/05/29/interview-with-the-commander/

11. Force Protection Equipment for the AFP Joint Special Operations Group (JSOG):

A contract worth around Php50 million was awarded to Israeli company Marom Dolphin involving the supply of 1,190 force protection body armor, which were delivered in early 2017.

Previous discussion on the link below: 

https://www.facebook.com/Maxdefense/posts/500982073405788

Revised AFP Modernization Program under RA10349:

Aside from completed projects under AFPMP RA7898, the DND and AFP also completed 3 projects under the RAFPMP under RA10349 as part of its Horizon 1 phase.

The Philippine Army completed 1 project:

12. Night Fighting System:

After winning the Public Bidding for the project, a contract worth Php712.069 million was awarded to Turkish defense company Aselsan Elektronik Sanayi vi Ticaret A.S. to supply 4,464 units of A100 Night Vision monocular night vision goggles. There were also reports that MaxDefense highlighted last October 2016 that the Philippine Army might have used the option to acquire 2,808 units of additional A100 Monocular NVGs using the difference between the project's ABC and the 1st Contract's amount, which is worth Php403.94 million. These A100 NVGs can be mounted on rifles like the Remington R4A3, or used with a head mount.

Previous discussion on the link below: 

http://maxdefense.blogspot.com.au/2015/05/philippine-army-to-acquire-night.html

https://www.facebook.com/Maxdefense/posts/443889332448396

https://www.facebook.com/Maxdefense/posts/538131386357523

One of the Aselsan A100 NV monocular installed on a Remington R4A3 rifle of the Philippine Army.
Photo exclusive to MaxDefense.

The Philippine Navy also completed 1 project:

13. Multi-Purpose Attack Craft (Lot 1):

The joint venture of Filipino company Propmech Corporation and Taiwanese boat-builder Lung Teh Shipbuilding Co. Ltd. bagged a contract worth Php268,880,000 to build 3 MPACs, designated the Mk.3, that has a different mission profile than the earlier models, with more emphasis on interdiction and firepower including being missile capable, rather than on shoreline insertion and extraction of troops. All 3 boats, with hull number BA-488, BA-489, and BA-491, were all delivered to the Philippine Navy by mid-2017. Meanwhile the Lot 2 of the project which covers the weapons systems, will be delivered within early this year.

Previous discussion on the link below: 

http://maxdefense.blogspot.com.au/2015/05/the-philippine-navy-embarks-on.html

https://www.facebook.com/Maxdefense/posts/359034590933871

http://maxdefense.blogspot.com.au/2017/04/first-photos-of-philippine-navys-new.html

The first of the MPAC Mk. 3, BA-498, undergoing tests last April 2017 in Subic Bay.
Photo exclusive to MaxDefense.

And finally, the Philippine Air Force also completed 1 project:

14. Fighter/Surface Attack Aircraft/Lead-in Fighter Trainer (F/SAA/LIFT) Acquisition Project:

The most expensive project ever acquired by the PAF in its entire history involved the acquisition of 12 FA-50PH Fighting Eagle light combat aircraft from Korea Aerospace Industries under a contract worth US$421,638,000. The order was completely delivered by May 2017 as the last 2 units arrive in Clark Air Base in Pampanga. All 12 aircraft are form the backbone of a newly revived 5th Fighter Wing, with the 7th Tactical Fighter "Bulldogs" Squadron flying the fleet.

Previous discussion on the link below: 

http://maxdefense.blogspot.com.au/2014/03/acquisition-of-fa-50-saaliftand-bell.html

http://maxdefense.blogspot.com.au/2015/03/the-philippine-air-forces-medium-term.html

https://www.facebook.com/Maxdefense/posts/552158508288144

https://www.facebook.com/Maxdefense/posts/468988133271849

The first of the PAF's FA-50PH light combat aircraft as it take-off from Taiwan en route to the Philippines.
Credits to owner of photo.

2017 also saw the awarding of different defense contracts to several multinational and local manufacturers and suppliers, as well as the delivery of procurements outside the AFP Modernization Program including special projects, military assistance from friendly and allied countries, among others. These would be discussed separately by MaxDefense to avoid having a very long blog entry.

We will also discuss the status of several pending and ongoing projects from AFPMP RA7898 and RAFPMP RA10349 Horizon 1 phase, so readers can understand where the AFP Modernization really is as of now.

In the meantime, we congratulate the Department of National Defense and the Armed Forces of the Philippines for the completion of these projects mentioned above within 2017, all of which improve the defense capacity of the country while also providing the necessary tools to our warfighters so they can do their job and mandate well. Looking forward to a more productive 2018 despite starting bad start, if you know what I mean.

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How Did Thales Became Involved in the Philippine Navy's Frigate Project in the First Place?

The Department of National Defense, specifically its head Defense Sec. Delfin Lorenzana, has admitted in his statement yesterday 20th December 2017, that the reason why he relieved Vice Admiral Ronald Joseph Mercado as the Philippine Navy's Flag Officer in Command (FOIC), was because VAdm. Mercado was in conflict with the Defense Department's orders to proceed with Hyundai Heavy Industry's insistence to use the Hanwha Systems Naval Shield Combat Management System for the Frigate Acquisition Project (FAP). There are many sources online but readers may refer on the clickable links HERE, HERE, and HERE.

It was stated in many reports, and in MaxDefense Philippines Facebook page posts that VAdm. Mercado was indeed in favour of using the Thales Nederland TACTICOS Combat Management System, which both the DND and Hyundai are not in favour to use.

But it was made to appear in reports that VAdm. Mercado was the only one insisting on the use of Thales TACTICOS.

But in the first place, how did Thales come into the picture of the Frigate Acquisition Project? Did Thales just suddenly came out of nowhere and became VAdm. Mercado's preferred supplier in an instant? Who brought in Thales in the first place?

MaxDefense would like to clarify this misrepresentation of the issue.

The photo above shows a 3D render of the Philippine Navy's Future Frigate as posted by Hyundai Heavy Industries in their website on October 2016. The additional captions were made by MaxDefense Philippines based on the information coming directly from HHI's bid submission on the FAP's 2nd Stage Bidding. Pitz Defense Analysis provided the labelling works on MaxDefense's behalf. This photo was posted in our blog entry dated October 24, 2016 when HHI and DND signed the contract for the FAP.
Original photo taken from Hyundai Heavy Industry's website. Thanks to Pitz Defense Analysis for the assistance.

First of all, Thales Nederland came into the picture because Hyundai Heavy Industries was the one who brought them into the project. Among those submitted by HHI during the 2nd Stage Submission and Opening of Bid Envelopes (SOBE) last December 2015 was a proposal to use a Thales combat management and sensor suite for the future PN frigates, as indicated in their Baseline Configuration List submission.

As MaxDefense discussed as early as October 2016 in the blog entry "Finally, the Contract Signing for 2 New Light Frigates between Philippine Navy and Hyundai Heavy Industries", MaxDefense already mentioned the subsystems approved by the Philippine Navy for the frigates, and it includes the Thales Nederland TACTICOS Combat Management System. The PN's FAP Technical Working Group (TWG) was the one who insisted the use of Thales TACTICOS. The list MaxDefense provided in that blog entry came directly from the Baseline Configuration List submitted by Hyundai last December 2015 to the DND's Bids and Awards Committee and did not just came out of nowhere.

For further reference, even India's Garden Reach Shipbuilders & Engineers (GRSE) submitted a full Thales Nederland combat management and sensor suite which is more comprehensive than those submitted by Hyundai.

So it was not VAdm. Mercado nor the Philippine Navy who brought in Thales into the project. It was Hyundai. So why did Hyundai, and even GRSE, brought in Thales into the project?

That is because Thales' products were compliant to the project's Technical Specifications, which was confirmed by the PN's Technical Working Group for the Frigate Acquisition Project. So why did Hyundai offered Thales only to backtrack later on when the contract was already awarded to them? Is this a case of "Bait and Switch" which, as many in the defense industry know, the Koreans are very well known of doing?



Evidence can be seen below on the position paper submitted by the Philippine Navy to higher authorities showing that the PN FAP TWG "sustained its preference of TACTICOS" for a number of reasons, mostly because Hanwha Naval Shield did not meet the project's Technical Specifications. For the record, this position paper was made in early 2017 when the contract was already signed and the Critical Design Review (CDR) already happening (hense, the FAP PMT Chairman position and not TWG which only applies before project starts), and did not come from VAdm. Mercado, but MaxDefense will reveal further details soon.

Above is an excerpt from just one of the position papers submitted by the Philippine Navy's Frigate Acquisition Program Project Management Team (FAP PMT) on their sustainment on using Thales TACTICOS as the project's Combat Management System. Other reasons for the decision was blurred for now, but will be discussed in the future as it holds key information on why TACTICOS was being consistently pushed by the PN including former FOIC VAdm. Ronald Joseph Mercado.
Thanks to our sources outside the Philippine Navy for providing this important document. (YES, it came from a different source which will surprise everyone when we post it later on.)

VAdm. Mercado's insistence to use the Thales TACTICOS has basis, being the one chosen by the PN's Technical Working Group since 2016, and according to further position papers submitted by the PN's Techical Inspection and Acceptance Committee (TIAC) and Project Management Team (PMT) which succeeded the TWG after the project proceeded with the Critical Design Review last January 2017, shows that the PN did not deviate from its position and still continued to insist on the use of Thales TACTICOS CMS.

VAdm. Mercado's position has legal basis, and has complete black and white documentation. Any investigation on the issue can easily see these evidences if investigators just request for a copy from the Philippine Navy.

MaxDefense will discuss more about the issue in future blogs.

Also, may I take this opportunity to inform everyone that there is a fake MaxDefense Philippines Facebook page that copied the cover photo, profile photo, group name, and even the layout of our page. The difference with this fake group and the original one is that our membership is more than 82,000 people, while the fake one was at 14 people as of this noontime. It also comments on Facebook regarding the FOIC relieving and frigate issues with an opposite stand to ours.

Thank you for your continued support of MaxDefense in uncovering the truth.

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Was Former Navy Chief Really Delaying the Frigate Project? Here is Our Simplest Answer

With all the fuzz on the relief of Vice Admiral Roland Joseph Mercado as the Philippine Navy's Flag Officer in Command (FOIC), different reasons were floated out by the public and even by the media reports. But one thing is certain so far, all media reports agree that VAdm. Mercado was relieved because of his disagreement with the Department of National Defense with regards to certain systems of the future frigate. Specifically the Combat Management System (CMS).

While the CMS isn't the only issue of the future PN frigate, it is the most highlighted issue because it was the one whose conflict was in every black and white everytime the PN makes its position to the Defense Department, and to the Office of the President.

Some reports say that the reason for the relief was because VAdm. Mercado was favouring a French company, which MaxDefense understand as Thales, in supplying the Combat Management System, and was in conflict with the Defense Department who chose a Korean-made CMS, which MaxDefense understand is Hanwha Systems.

While the reason is partly true, there is a reason why the former Navy chief was in favour of using the CMS from Thales, which MaxDefense named before as the Thales TACTICOS BL2.

First of, Thales TACTICOS was the original offer made by Hyundai Heavy Industres when their bid proposal was accepted by the Philippine Navy's Technical Working Group for the Frigate Acquisition Program. Why would Hyundai deviate its offer from the proven TACTICOS to the less proven Hanwha Naval Shield?

Secondly, to make it simple, does the Hanwha Naval Shield meet the Technical Specifications set by the Philippine Navy for all subsystems of the frigates. If it doesn't meet the specs, then why bother using them? So far, TACTICOS met the specs of the project, and the Navy's own hired consultant for the project agrees to it too.

Thirdly, does the change from TACTICOS to Naval Shield conform with the Government Procurement laws under RA 9184? If it does not, then why push it to happen? Breaching the law is considered an illegal act and may be a valid reason to stop a deal and compromise the success of the project.

Also, in its recommendation letter to relieve VAdm. Mercado, it was indicated that the Philippine Navy's TWG rated the Hanwha Naval Shield as compliant to the project's requirement. The question here is, did the PN's FAP TWG really found the Naval Shield compliant, and did they agree to use it in the first place? Then why are the position papers of the PN TWG and Project Management Team (PMT) since early 2017 up until now all mention that the Hanwha's Naval Shield did not comply to the project's specifications. All position papers of the PN mentioned the same all this time.


With the insistence to correct the use of a non-compliant CMS, for people who do not understand the situation it may appear the VAdm. Mercado and his team are "delaying" the project considering that the Defense Department already issued a memorandum last October 2017 to use the Korean-made Hanwha Systems Naval Shield BL2 as the future frigate's CMS. But for those who understand the situation, is he really delaying the project, or was he just insisting that the project must follow proper process as prescrbed by RA 9184?


In a nutshell, these are at the simplest explanation for the FOIC's position that MaxDefense hopes that even the laymen can understand. MaxDefense will discuss the issues deeper considering that CMS is not the only problem hounding the Frigate Acquisition Project. As of my last count, there are also STRUCTURAL, COMMUNICATIONS, SENSORY, AND SAFETY ISSUES that are not yet discussed but are worth discussing too.

Until then, stay tuned.

Edit: with the Defense Sec. Delfin Lorenzana already releasing a statement on why he ordered the relief of VAdm. Lorenzana, MaxDefense believes its also time to answer and show evidence of what really happened these past few weeks. He even admitted that lots in Social Media has painted the DND into a bad light, and there is a reason why.

Until then, stay tuned.

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MaxDefense Facebook Ban Could Be Coordinated with FOIC Sacking

After asking around our contacts and sources in the AFP and DND who are familiar of the situation, it appears now that my banning last weekend from posting on Facebook may not be from communist terrorists or their legal fronts, but may have to do with the impending relief of the Philippine Navy's chief / FOIC yesterday. It was a coordinated move, which includes making the entire process quick so any detractors won't be able to react fast enough.

This is to keep me silent when they started their move. MaxDefense only received the info on FOIC's confirmed relief on Monday night 18th December, when the change of command was done the next day at 0900H. By the time my Facebook account is up late this week, its too late.

Several sources confirmed that MaxDefense is being accused of being an unofficial mouthpiece of the Navy leadership, which is NOT TRUE.

While MaxDefense may have contacts in the military and defense establishment, our stand is based on our own opinion and not because we were told by certain people to be in this position. And in this case, based on black and whte evidence and personal accounts, MaxDefense agrees that the leadership change based on the issues of the frigate is unjust and unfair and threatens the frigate project by breaching RA 9184.

MaxDefense expects the media blitz to begin in favor of the DND and RAdm. Empedrad in the next few days, as they expect that no one from the Philippine Navy will speak up on the issue, and the people who made the move were prepared for this.

MaxDefense also thank its readers who diseseminated the info on my posting ban, and we also thank other FB-based defense pages like Pitz Defense Analysis and Inside Military Forum, among others, for posting related info without us asking.

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Philippine Navy Chief Suddenly Relieved, Frigate Mess Cover Up Highly Likely Reason

In a very suspicious move made by the Philippine Navy and Department of National Defense, the Philippine Navy's Flag Officer in Command (FOIC), Vice Admiral Ronald Joseph Mercado, was relieved from his post and was replaced by AFP J9, Rear Admiral Robert Empedrad effective today, 19th December 2017 at 0900H. This despite VAdm. Mercado was slated for retirement by March 2018 when he reaches the mandatory retirement age of 56 years old. Its still being confirmed what would be VAdm. Mercado's new position.

The turn over appears to have not been covered by the media, or if it did it was done minimally. No speeches whatsoever. And it was done in the Office of the Chief of Staff AFP's instead of a public area. The ceremony was simple: just a quick handover ceremony that isn't normal when replacing the head of a major armed service branch of the Armed Forces of the Philippines. VAdm. Mercado will prbably be assigned in AFP Headquarters until he retires, which is tantamount to floating status.

Were the issues on the Philippine Navy's Frigate Acquisition Project the reason why FOIC was suddenly replaced? MaxDefense will discuss soon.

As many of our readers may have already known, this is likely something to do with the mess involving the Philippine Navy's Frigate Acquisition Program, which we have been covering since September 2016 before the DND and Hyundai Heavy Industries signed the contract for the deal.

MaxDefense has been raising the alarm on the issue for several months now, wherein Hyundai is attempting to revise the frigate's subsystems and design in violation of RA 9184 and not in compliance to the Technical Specifications of the project, with the backing of the Department of National Defense. This issue has become too serious to the point that the Defense Secretary himself has took notice of our posts and placed MaxDefense in the DND and AFP's monitoring.

Prior to this relief of the FOIC, the chairman of the PN Technical Inspection and Acceptance Committee (TIAC) and Project Management Team (PMT) of the Frigate Acquisition Project, Commo. Sean Villa was also relieved from his post last week.

As a background, RAdm. Empedrad was formerly the FAP Technical Working Group head when he was still a Commodore, and was also a FAP Steering Committee member and adviser at the same time as being the AFP's J9. Incidentally, VAdm. Mercado was also the first Technical Working Group head of the FAP before then Commo. Empedrad took over when Mercado became FOIC in 2016.

So why relieve these two important officers of their post, considering their involvement in the project? Why was RAdm Empedrad involved in the Frigate Project until before he was made FOIC despite already the AFP J9 which has nothing to do with the FAP? Why was there even a Steering Committee made by the Defense Secretary despite the presence of a Project Management Team and Technical and Inspection Acceptance Committee? There are many questions actually but we will all bring it to place very soon.

Also why do this change of command just before the Christmas holiday when everyone including the Senate and Congress will be out of session, and the media's attention is on the holidays and the aftermath of the devastating typhoon?

MaxDefense will discuss more of the issues in our next blog entry very soon.

Meanwhile I, Max Montero, is still banned from posting on our Facebook Group Page, as well as on my personal page until next week. Coincidence as well?

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Banned Again from Posting on Facebook

For our Facebook page readers, you may have noticed that we have been silent for the past 3 days. Unfortunately, Max Montero (the only admin of MaxDefense Philippines) is banned from posting on Facebook and replying messages in Facebook Messenger for a week.

Looks like our "friends" from the terrorist New People's Army and its so-called legal left wing legal groups are not happy with our recent posts about them.

Anyway, please spread the word that any worthy topic and discussion would be posted here.

Cheers everyone!

Max Montero

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Philippine Navy Plans to Acquire New Corvettes under Horizon 2 Modernization Phase

As the Horizon 1 phase of the Revised Armed Forces of the Philippines (AFP) Modernization Program setting in the next 2 months, the entire AFP including all its service branches are now preparing for their program line-up for acquisition under the Horizon 2 phase, which covers the years 2018 to 2022.

The Philippine Navy (PN) is determined to move ahead with its own Horizon 2 procurement plans, despite the setback it is facing due to the difficulties in finalizing the critical design of two brand new frigates it will acquire from Hyundai Heavy Industries (HHI) of South Korea due to issues that deserve its own discussion. 

Moving ahead (for now), MaxDefense has been continuously monitoring the proposals submitted by the different service branches these past several months, which is now broken down to yearly requests based on a program for the entire Horizon. Several projects look promising depending on the National Government's willingness to provide the funding.

One of these projects coming from the Philippine Navy that is being requested for funding under CY 2018 is for the acquisition of a Corvette.

NOTE: This project is still in the proposal stage, and would require approval from the National Government for the budget to be allocated, although the chances that this would become a reality is pretty high, even after some budget reduction, based on MaxDefense's own assessment.

TKMS has released new iterations of the MEKO A100 Corvette design, shown with either the "Energy Saving Hull Design" or the conventional hull design.
Photo taken from NavyRecognition.com.

Corvette Acquisition Project:

Currently this proposed project has no name yet, which MaxDefense conveniently named as the "Proposed Corvette Acquisition Project" for discussion purposes, which is based on how the DND and PN named the Frigate project before.

While there are not much details about the project, the budget proposed for this acquisition may say a lot of things due to the experiences the PN and groups like ours in the FAP.

For CY 2018, the request is for funding for 1 Corvette with an initial proposed ABC of Php 9,000,000,000.00 as of August 2017, but increased to Php14,000,000,000.00 by September 2017 Is the figure familiar?

It should be, because at Php 9 billion a piece, it is exactly the same amount allocated by the DND and PN for each of the FAP frigates to be built by HHI! For those who are not familiar, the FAP was divided into 2 parts: Lot 1 with a budget of Php16 billion is for the acquisition of 2 frigate platforms, while Lot 2 with a budget of Php2 billion is for the acquisiton of ammunition (missiles, torpedoes, gun ammunition, and countermeasure rounds).

But now at Php14 billion each ($274 million at US$1 = Php51), it is now costlier than the FAP frigates!

Based on this information alone, MaxDefense can gauge what we could expect of the corvette, just by basing it on the history of the FAP project.

GRSE is said to be among those expected to provide an offer, possibly with an improved version of the original offer it made during the FAP's procurement stages. GRSE previously mentioned that it was offering a design based on the Indian Navy's Kamorta-class large anti-submarine corvettes, which are large ships compared to those offered by European shipbuilders.
Credits to owner of photo.

Possible Contenders:

While budget is still being proposed and still for requesting, the PN already started getting Request for Information, Proposals, and Quotations (RFI, RFP, RFQ respectively) from different shipbuilders, but probably this would not include HHI, which according to our sources, the PN doesn't want to deal with for now.

Among those MaxDefense expects to provide their proposals to the PN are those who competed for the FAP and lost. This may include Garden Reach Shipbuilding and Engineering (GRSE) of India, who is confident to provide a frigate/corvette warship at a price lower than the proposed ABC. Other shipbuilders may include former FAP contenders ThyssenKrupp Marine Shipbuilding (TKMS) of Germany and Navantia of Spain, as well as newcomers like Damen of the Netherlands and The Naval Group (formerly DCNS) of France. Other Korean shipbuilders may also give interest including Daewoo Shipbuilding and Marine Engineering (DSME) and STX.

  

MaxDefense expects Dutch shipbuilder Damen to join the game and offer their SIGMA series of corvette design.
Photo taken from Damen's website.

Comparing to the Frigate Acquisition Project:

Depending on how we interpret the budget being requested for the Corvette, MaxDefense believes that the PN would specify their Corvette at a higher league than the FAP Frigates, and may have a higher level of sensor and firepower requirement as originally envisioned for the FAP. Even if the platform is smaller than the frigates to be built by HHI, the PN may have no issues with them as long as it meets certain requirements.

Take note that during the early stages of the FAP procurement phase, both Navantia and TKMS offered a platform that is smaller than the design proposed by HHI. And although the PN's preference was for a larger platform considering they were in the market for a frigate wherein a larger platform is better to allow future capabilities to be added later on, the PN was open to the proposals of TKMS and Navantia.

TKMS previously disclosed to MaxDefense that their offer was based on their MEKO A100 corvette design, which is less than 100 meters long and displaces around 2,400 tons at full load. Meanwhile, Navantia's proposal for FAP was made known in a public post they made a few years ago, with a platform based on their Avante 2200 Combatant corvette. It has similarities in dimension to TKMS' offer, with less than 100 meters long and displaces at around 2,500 tons at full load. In comparison, HHI's offer which is based on their HDF-3000 light frigate design, is a little over 105 meters long and may displace at around 3,000 tons at full load.

Budget issue was a problem with the FAP which made shipbuilders cut down their design just to meet the costs, while discouraging other shipbuilders especially European and American ones from joining. But even with a low budget with the FAP, it should be remembered that GRSE, the lowest bidder during the FAP's Lot 1 (Platform) 2nd stage bidding, was able to bid for a light frigate with dimensions larger than that of Hyundai's FAP proposal, and with respectable sensors and weapons suite for around Php7.6 billion each (without ammunition). MaxDefense sources privy to the FAP confirmed that until recently, GRSE confirmed that they can still deliver a FAP contender for less than HHI's contract price, and with a better weapons and sensor suite than what HHI has been pushing the PN and DND to accept.

Recap on GRSE's FAP Proposal as Baseline:

To give a baseline on what Php 9 billion can buy, let's use GRSE's submitted proposal for the FAP as basis.

For those who have not read this before, please feel free to check our previous blog entry discussing the FAP's weapons system proposal from HHI and GRSE:

"The Philippine Navy's Future Frigate from Hyundai: Discussing the Ship's Design and Some of its Expected Subsystems" - dated September 3, 2016

At a little over Php 7.6 billion a ship (without ammunition), GRSE's FAP proposed include a full sensors and communication suite from Thales, 4 tubes of MM40 Exocet anti-ship and two twin Simbad RC-Mistral VSHORAD missile launchers from MBDA, two triple torpedo launchers from SEA, a 76mm Oto Melara Super Rapid primary and a 30mm Oto Melara Hitfist secondary guns, and a platform based on the Kamorta-class large anti-submarine corvette, which is large enough and worthy to be called a light frigate.

Even HHI, despite their attempts to short-change the PN, is still capable of providing a light frigate for Php 7.95 billion (without ammunition) using sensors and weapons system that have lesser performance than those they originally offered, or to those offered by GRSE.

Originally posted in MaxDefense in October 2016 in collaboration with Pitz Defense Analysis (who assisted in the labelling), here is the ORIGINAL proposal submitted by Hyundai Heavy Industries for the PN's frigate. Note that many of the items there are to be replaced with a less performing subsystems. But this provides an insight on what the PN may specify for their Corvette Project.
Original photo from Hyundai, labels from MaxDefense and Pitz Defense Analysis.

It would be remembered that both Navantia and STX attempted to submit a bid for the FAP's 2nd stage bidding, but failing only due to technicalities. But knowing that the ABC for the FAP Lot 1 was only Php 16 billion for 2 ships, it means that they are willing to meet the budget for their proposals.

MaxDefense believes that the PN may have also realized that Php2 billion allocated for ammunition of 2 light frigates may not be enough.

But with a Php14 billion budget, this becomes a game changer as shipbuilders won't need to hold back as much like what happened in the FAP, while also opening the chance fornother shipbuilders to join.

MaxDefense believes that with the budget, a ship similar in size as the HHI proposal for FAP can be attained, while giving enough budget to not downgrade the sensors system like what happened on the FAP. It also allows the installation of items considered as "Fitted for but now with" (FFBNW) items in the FAP like Towed Array Sonar System (TASS), Vertical Launch System (VLS), and Close-in Weapon System (CIWS).

MaxDefense also believes that ammunition will be included in the Php14 billion budget.

Another possibility on the use of the extra budget is for the shipbuilder to also provide a Technology Transfer and allow the ship to be built in the Philippines. The tech transfer is not free so a portion of the budget might be allocated for such arrangement.

This could allow the PN to build the 1st corvette, and any succeeding unit locally, benefitting the Philippine shipbuilding industry and allowing it to prepare for future warship requirements like the proposed Frigates under Horizon 2 phase.

Slap on Hyundai's Face:

MaxDefense believes that this Corvette Acquisition Project is now being used by the Philippine Navy as a "Plan B" for their Frigates, should they not be able to get them according to what they wanted it to be.

It would be remembered that originally, the PN was raising the possibility to have a 3rd frigate that could be awarded to Hyundai to probably sweeten the deal. But HHI's post-contract actions could have made the PN decide to cancel that option, and instead create a new project that could turn out better than the FAP.

Also, while there is only 1 Corvette being requested for CY 2018, MaxDefense was able to get hold of the latest Horizon 2 plan of the Philippine Navy. And it appears that they are planning to have 2 Corvettes for acquisition within the Horizon 2 phase, and this 1st unit was probably pushed forward to catch-up with the FAP's delivery schedule. The PN may opt to have a contract for 1 ship with options for 1 more.

And aside from the Corvette, the PN is planning to have another 2 frigates for funding within Horizon 2, and learning from their mistakes on the FAP, the proposed budget for each frigate is now Php 18 billion, or double that of the FAP. Look at what you will miss, HHI, is these projects are approved for funding!

The only worry many officers in the PN have is if certain personalities in the Department of National Defense (DND), specifically those who protected HHI instead of defending what is best for the PN, may once again use their power and influence to dictate to the PN what they should acquire. And this is the reason why MaxDefense believes that, learning from the past, the PN may now instead pre-select subsystems to be used instead of relying on shipbuilders to propose the subsystems themselves.

Its either the PN would procure the subsystems itself, or they will specify to the shipbuilders the exact subsystems that they wanted their ships to have. This gives the shipbuilders clearer parameters, and all they need to do is create a platform based on those subsystems. It also levels the playing field while also keeping certain people in the DND to be hands off the project. 

The lessons it learned from the Frigate Acquisition Project (FAP) may allow the PN to make their future acquisitions more responsive to their needs, hopefully without the meddling and interference by some groups within the DND who placed their personal interests first before assisting the PN get the best equipment the government can buy.

How about the Procurement of Multi Purpose Patrol Vessel?

With the Corvette being prepped by the PN for acquisition, what happens then to the Multi-Purpose Patrol Vessel (MPPV), which MaxDefense previously reported as among those being eyed from procurement soon.

According to sources, the PN is temporarily shelving this program, and may opt to raise it again for CY 2019 or 2020, as they are trying to give importance to heavier firepower by upgrading existing assets first. 

As mentioned in our FB page a few days ago, the PN is also trying to secure funding for the weapon system upgrade of all 3 Del Pilar-class frigates with a proposed budget of Php 15 billion, and the upgrade of the Pohang-class corvette that is expected to join the fleet early next year with a proposed budget of Php 6.2 billion.

Let's see what happens if the PN will be successful in securing budget for these multi-billion peso projects, considering that the current administration prefers internal security matters. It would be best for the PN to defend their requests by relating these projects into internal security operations, just for the sake of getting the funds they need.

The PN is shelving the MPPV project for now, while focusing on the Corvette, and other PN projects that are more relevant to the times. Money will also be needed to upgrade the upcoming Pohang-class corvette which is expect to enter service by early 2018.
Credits to owner of photo.

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