Up to Marcos admin to move forward with scrapped chopper deal with Russia – ex-defense chief

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Metro Manila (CNN Philippines, August 5) — Former Defense Secretary Delfin Lorenzana has confirmed that the Philippines has terminated the deal to procure 16 military helicopters worth ₱12.7 billion from Russia for fear of sanctions from the United States.

Now the possibility of retrieving the Philippine government's initial payment of ₱2 billion for the Mi-17 helicopters is up in the air and the ball is now in the court of the Marcos administration.

Lorenzana on Wednesday said former Finance Secretary Carlos Dominguez III "enumerated 10 kinds of sanctions" that the United States could enforce against the Philippines, prompting then-President Rodrigo Duterte to direct the scrapping of the deal five days before his term ended.

He said Duterte told him to terminate the agreement since it could be more disadvantageous to the country if the US slaps sanctions.

"[M]arami rami rin, so mas mabuti na siguro na itigil na natin kasi mas malaki yung damage na magagawa ng sanction kesa yung maituloy natin yung deal na 'yan," he told reporters on the sidelines of an event at the Indonesian Embassy. "If we pursue the purchase then we may not be able to pay the payment because of the sanctions. All payments that we do passes through US banks, banking system. They can easily block the payment."

[Translation: There are a lot of possible sanctions so we decided it might be best to end the deal because it can cause more damage.]

Under a 2017 federal law called "Countering America’s Adversaries Through Sanctions Act," the US government can impose sanctions on entities with significant defense or intelligence transactions with Russia.

Lorenzana earlier expressed confidence the Philippines will not feel the wrath of the US since the country has already made its first tranche of payment to Russia without any sanctions.

The former defense secretary said he is unsure if the ₱2 billion initial payment can be refunded, but all discussions between the Philippines and Russia are now in the hands of the Marcos administration.

"It will take some time in the negotiations for us to get back the two billion pesos... We have not yet initiated anything. It's up to the new administration if they will make arrangement with the Russians for the return of the two billion pesos," Lorenzana said.

CNN Philippines correspondents David Santos and Tristan Nodalo contributed to this report.