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Industry

Philippines Cancel Their Russian Helicopters Deal

Photo. Russian Helicopters

The Philippines decided to cancel their Mi-17 procurement deal signed last year, which also included maintenance and training - it entailed a price tag of around 12.7 bn. pesos (USD 243 million). The decision is tied to the war in Ukraine and the sanctions imposed by the United States. Just recently the Philippines also ordered 32 Black Hawk helicopters at the Polish PZL Mielec facility. Further procurement, aimed at the filling the gap that emerged, following the cancellation of the Russian deal, is also being considered.

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The decision was made, as the government in Manilla was worried about the US sanctions hitting the Philippines, within the framework of the Countering America's Adversaries Through Sanctions Act targeting the states procuring military equipment in Russia, Associate Press reported, quoting anonymous Filipino officials. As the agreement has already been concluded, the first installment was paid in January - and as Manila announced, a termination procedure would now be launched concerning that agreement. The Russians can appeal that decision, but the Filipino government does not have much room to move here. It is also emphasized that the said deal was concluded by the former President, Rodrigo Duterte.

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According to the agreement signed in November 2021, the first out of 16 Russian Mi-17s were to be delivered within 24 months from the date of its conclusion. All in all, the contract had a value of USD 243 million, also including the maintenance package. Interestingly, back in March this year the Filipino Secretary of Defence Delfin Lorenzana was assuring everybody the agreement would not be terminated, as Manila wanted to remain neutral in the dispute arising around the Ukrainian conflict. The risk of sanctions however influenced this “neutrality”. The change of the government also played a major role here. President Duterte was replaced by Ferdinand Romualdez Marcos Jr, son of the former Filipino Dictator Ferdinand Marcos, overthrown in 1986 and replaced by President Corazon Aquino.

Most probably, to maintain the neutral stance, Duterte's government signed a contract with the Polish PZL Mielec facility concerning 32 S-70M Black Hawk helicopters, and it went alongside the Russian deal concluded in November 2021. The contract has a value of USD 630 million, and it includes a training and logistics support package. The first 5 helicopters are expected to be delivered in 2023. Manila has already procured 16 Black Hawk helicopters. The procurement was motivated by the necessity to neutralize the impact the Rai typhoon had on the country - in that effort the Black Hawks turned out to be the most useful aircraft around.

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As the Russian deal has been terminated, potential further procurement of Black Hawks from Poland is also on the table. It is possible, however, that heavy helicopter platforms could also be procured in the United States. The situation in the Philippines proves that sanctions imposed on Russia and its customers have taken effect, diminishing Russia's income and financial potential. This is even more pronounced, as the sanctions have hit the sector so profitable, as aerospace and defence. On one hand, this has a detrimental impact on the Russian manufacturing efforts, on the other it steers away the Russian customers who turn away, choosing some less risky suppliers.

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