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Monday, July 4, 2011

The Philippines will not buy second hand naval equipment from the USA

Earlier, Foreign Secretary Albert del Rosario said the Philippine government might not buy but lease the equipment from the United States, adding the aim is to become a strong US ally.

The Philippines will not buy second hand naval equipment from its ally, the United States, said a senior official who announced the arrival of long range aircraft that will oversee the country's claim on the contested South China Sea (West Philippine Sea) and the Spratly Archipelago.

The government will soon have very long range patrol aircraft and also watercraft on the West Philippine Sea, facing the eastern seaboard of the country, said Defence Secretary Voltaire Gazmin.

"We have to see if we can afford it," Gazmin also said.

He did not give details about the amount to be spent for the equipment and the manner of payment for the said purchase.

First phase budget this year for upgrading the Philippine Navy was estimated to cost P 11 billion ($ 252 million). Aside from the US long range aircraft, the Philippines already shows interest to acquire 6 Italian or Korean made Warplanes.

Chinese forces opened fire on Filipino fishermen, harassed a Philippine oil exploration and erected structures on six areas on Philippine territory, the Philippines complained earlier.

Philippine President Aquino called for US assistance because of these problems. Then Manila baptized the South China Sea as the West Philippine Sea.

Like Manila, Vietnam also accused China of activities that increased tension in the South China Sea.

Earlier, Foreign Secretary Albert del Rosario said the Philippine government might not buy but lease the equipment from the United States, adding the aim is to become a strong US ally.

The list of the Philippine government was already given to the US Navy, he added. The new equipment will supplant the F5 fighter jets which were retired in 2005. The Philippine Navy is still using World War II vintage Rajah Humabon, a former US Navy frigate.

In reaction, militant groups said that the Philippine government might have allowed the United States to stockpile naval equipment at the South China Sea.

They also blamed President Benigno Aquino for drawing the US into the contested claims on the South China Sea and the Spratly Archipelago.

In 1991, the Philippine Senate rejected the US-proposed extension of the now defunct Military Bases Agreement. Since then, the Philippines stopped hosting of the largest two US overseas war facilities in central Luzon. The former US Naval Airbase in Olongapo, Zambales and the Clark Air Base in Angeles, Pampanga were transformed into commercial use.

But soon after, the US has proposed to members of the Association of Southeast Asian Nations (ASEAN) for the establishment of non-permanent US bases in the Pacific region.

This was not yet acted upon.

China, Taiwan, and Vietnam claim the whole of the South China Sea. The Philippines, Malaysia, and Brunei claim some parts of the Spratly Archipelago.

Philippines Stocks Rise: Atlas, Philippine National, SM Investments

Shares of the following companies had unusual moves in Philippine trading. Stock symbols are in parentheses and prices are as of the noon close in Manila.

The Philippine Stock Exchange Index increased 1.6 percent to 4,421.56, a record close.

Philippine National Bank (PNB) jumped 6.2 percent to 63.70 pesos, the steepest gain since April 12, after the Philippine Daily Inquirer cited people it didn’t identify as saying Industrial & Commercial Bank of China Ltd. may invest in Allied Banking Corp., a Manila-based lender that will merge with Philippine National this year.

Allied Bank said in a statement that the report has “no substantive basis.” Philippine National President Eugene Acevedo declined to say how the bank will benefit from a possible investment by ICBC into Allied Bank. Wang Zhenning, a Beijing-based press officer for ICBC, declined to comment on market speculation.

SM Investments Corp. (SM) , the holding company of Philippine billionaire Henry Sy, climbed 3.1 percent to 551 pesos, the sharpest gain since April 29. The company approved a $142.2 million investment in Atlas Consolidated Mining & Development (AT) Corp, a stock exchange filing showed. Atlas rose 1.7 percent to 21.60 pesos, the highest close based on prices going back to March 1992.

Vista Land & Lifescapes Inc. (VLL) rose 1 percent to 3.19 pesos, the highest level since June 22, after the homebuilder said it will invest at least 5 billion pesos on office buildings and commercial spaces in a project in Laguna province.

To contact the reporter on this story: Ian C. Sayson in Manila at isayson@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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