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What’s in the New South Korea-Philippines Shipbuilding Pact?

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What’s in the New South Korea-Philippines Shipbuilding Pact?

The new agreement highlights the continued inroads both countries are making in this realm.

What’s in the New South Korea-Philippines Shipbuilding Pact?
Credit: Wikimedia Commons

Earlier this month, the Philippines and South Korea signed a new agreement related to a potential purchase of frigates. The deal highlighted the ongoing activity in one aspect of the broader bilateral defense relationship between the two Asian countries.

As I have observed before in these pages, South Korea has been among the key defense partners for the Philippines as Manila looks to boost its growing but still limited military capabilities. While the defense relationship between the two sides includes a wide range of areas – including visits, exchanges, and exercises – the aspect that unsurprisingly receives the most attention is defense equipment, whether it be in the form of deals for fighter jets or frigates, with some deals constituting among the top line items in ongoing Philippine defense modernization continuing under Philippine President Rodrigo Duterte.

Earlier this month, this aspect of the South Korea-Philippines defense relationship was in the headlines again with the signing of a new agreement between the two countries. The Philippine defense ministry and South Korean shipbuilder Hyundai Heavy Industries (HHI) inked a pact that related to a new corvette deal.

The memorandum of understanding, which was signed by Philippine Defense Secretary Delfin Lorenzana and HHI President Ka Sam -Hyun on November 8, occurred at the company’s shipyard in Ulsan, South Korea on the sidelines of the launch of the Philippine Navy’s second new missile capable frigate the BRP Antonio Luna.

While the corvette deal itself remains unfinalized, the MOU sets the terms for potential agreement. Philippine Navy Chief Robert Empedrad, who witnessed the ship launch, told media outlets at a Philippine Marine Corps celebration on November 11that the MOU was basically ‘an understanding about how to implement the project once the budget is available for the corvettes.”

Empedrad unsurprisingly did not offer much in the way of specifics about how exactly a corvette deal might shape up in the future given the details that remain to be worked out. But he did indicate that while the deal was tentative, Lorenzana was pushing for a final agreement was drafted and inked by the end of 2019, with other steps to go including a securing a financial commitment, and that in recognition of the importance of this project, Manila may put others on hold to make sure this goes through. The two corvettes are expected to cost a total of 28 billion pesos, and there have been various suggestions made before about financing options including a government-to-government loan agreement.