Palace approves payment scheme for Korean fighter jets

AviationUpdatesPH.com – The MalacaƱang Palace has given its approval for the payment plan concerning the acquisition of 12 lead-in fighter trainer jets from South Korea. This approval signifies a significant step towards the finalization of the deal to procure these air assets.

Korean Aerospace Industries' FA-50 aircraft. Photo from Yahoo News.

The defense department has been granted permission to make an upfront payment, which constitutes 15 percent of the total contract price, to the South Korean company, Korean Aerospace Industries.

The sanctioning of the payment scheme was officially documented in a memorandum, signed by Executive Secretary Paquito Ochoa Jr., dated Feb. 13.

The approval of the payment scheme for this multibillion-peso project was confirmed by Defense Undersecretary Fernando Manalo.

Preparations are currently underway to draft a contract that outlines the specifics of the payment scheme.

Initially, Korean Aerospace Industries (KAI) had requested a 52 percent down payment to cover the manufacturing costs. However, after negotiations, KAI agreed to a progressive payment plan.

Under the revised plan, the government will make payments upon the completion of specific “Milestones” or stages of progress in the construction of the jets. This approach ensures a more balanced and phased payment structure.