Your 1st for Philippine Defense

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SecDef Lorenzana confirms Austal is still the preferred OPV supplier for the PN

The Philippine Navy commissions its 2nd Jose Rizal-class frigate!

The Philippine Navy welcomes BRP Antonio Luna (FF-151), its newest frigate!

The Philippine Navy selects Shaldag Mk. V for Fast Attack Interdiction Craft!

The DND has awarded the FAIC-M Acquisition Project to Israel Shipyards

The Philippine Air Force wants more Black Hawk helicopters!

The Philippine Air Force asks for more Black Hawks to allow the retirement of their Bell UH-1 Huey fleet

The Philippine Army orders the Sabrah Light Tank System from Israel!

Israel's Elbit Systems was declared the winner to supply light tanks to the PA

The Philippine Air Force receives full order of Hermes 900 and Hermes 450 UAVs!

All 9 Hermes 900 and 4 Hermes 450 MALE UAVs have been received by the PAF!

Wednesday, October 4, 2017

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

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:

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.

Philippine Navy Modernization Projects

Philippine Air Force Modernization Projects