CERTAIN procurement practices as accorded by law could be stunting the development of the local defense manufacturing industry, or what constitutes this industry thus far.
“That’s the meat of it.... [Our] procurement policies is hampering the growth of the local [defense manufacturing] industry,” Rodolfo B. Mendoza, Jr., a defense analyst and terrorism expert at the Philippine Institute for Peace, Violence and Terrorism Research, told BusinessWorld in an interview Wednesday.
These policies, Mr. Mendoza said, can be found in Section 4 of Republic Act No. 7898 -- An Act Providing for the Modernization of the Armed Forces of the Philippines and for Other Purposes -- as well as in some bidding requirements.
These policies, Mr. Mendoza said, can be found in Section 4 of Republic Act No. 7898 -- An Act Providing for the Modernization of the Armed Forces of the Philippines and for Other Purposes -- as well as in some bidding requirements.
Section 4 states, in part, that “no major equipment and weapon system shall be purchased if the same are not being used by the armed forces in the country of origin or used by the armed forces of at least two countries.”
Bid documents, on the other hand, requirement that “bidders should have completed, within five years from the date of submission of bids, a contract similar to the project.”
Bid documents, on the other hand, requirement that “bidders should have completed, within five years from the date of submission of bids, a contract similar to the project.”
Mr. Mendoza said these provisions should be changed, as Section 4 automatically disqualifies all local players, more so in the short arms manufacturing industry. The bid requirement is also problematic, he said.
“Baguhin natin. [Let’s change these.] Let experts take a look at that and then [we should] arrive at a consensus. Kasi kawawa talaga ’yung mga Filipino industry players [They are really the ones affected],” he said.
But John. T. Lee, president of the Aerospace Industries Association of the Philippines, said they understand the preference for some military products over others.
“When you buy something, like a military jet or a helicopter, and you use it on sensitive operations, you will want to use proven technology,” Mr. Lee told BusinessWorld in a phone interview.
Still, Mr. Lee said the government should come up with a road map that would guide the local defense industry in the years ahead.
“If you want to design a military aircraft, it would probably take ten or more years.... There is no funding to develop [the] military because the cost of research and development is very high. The commercial market is also much more stable compared to that,” Mr. Lee said.
Mr. Mendoza said local industry players can collectively persuade Congress to take another look at Republic Act No. 7898. But he is not confident Congress will listen to them.
Another approach would be for Filipino companies to partner with established foreign brands in manufacturing and production agreements.
“We have to redefine the business structure and come up with joint ventures [with] foreign-based manufacturers. We can do this through under-licensing.... By doing this, we will also create jobs for Filipinos,” he said.
“Baguhin natin. [Let’s change these.] Let experts take a look at that and then [we should] arrive at a consensus. Kasi kawawa talaga ’yung mga Filipino industry players [They are really the ones affected],” he said.
But John. T. Lee, president of the Aerospace Industries Association of the Philippines, said they understand the preference for some military products over others.
“When you buy something, like a military jet or a helicopter, and you use it on sensitive operations, you will want to use proven technology,” Mr. Lee told BusinessWorld in a phone interview.
Still, Mr. Lee said the government should come up with a road map that would guide the local defense industry in the years ahead.
“If you want to design a military aircraft, it would probably take ten or more years.... There is no funding to develop [the] military because the cost of research and development is very high. The commercial market is also much more stable compared to that,” Mr. Lee said.
Mr. Mendoza said local industry players can collectively persuade Congress to take another look at Republic Act No. 7898. But he is not confident Congress will listen to them.
Another approach would be for Filipino companies to partner with established foreign brands in manufacturing and production agreements.
“We have to redefine the business structure and come up with joint ventures [with] foreign-based manufacturers. We can do this through under-licensing.... By doing this, we will also create jobs for Filipinos,” he said.
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