MANILA (PNA) -- The letter of credit (LOC) for the country's first two missile-firing frigates, whose contract was won by Hyundai Heavy Industries (HHI), is now being finalized, Philippine Navy (PN) flag-officer-in-command, Vice Adm. Roland Joseph Mercado has said.
"As far as I know, they are now finalizing the terms in the LOC, for the frigate project. That's the only update I could give for now," he said in an interview with the Philippine News Agency (PNA).
An LOC is a letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. In case the buyer is unable to make payment for the purchase, the bank will be required to cover the full or remaining amount of the purchase.
Mercado is the same officer who headed the technical working group that came up with the specifications of the country's first-ever missile-capable frigates.
On Oct. 24, National Defense Secretary Delfin Lorenzana formally inked the contract for the Frigate Acquisition Program, together with officials and delegates from South Korea's HHI. The signing ceremony took place at the PN's headquarters in Naval Station Andrada, Roxas Blvd., Manila.
The project involves the construction and delivery of two missile-firing frigates to the PN.
The signing of the contract signals the start of the construction and is the culmination of the long and tedious procurement process for the project.
As background, the Notice of Award was approved, issued and was duly conformed by HHI on Sept. 13 with the amount of USD336,912,000 or PHP15,744,571,584.
The project is worth PHP16 billion with another PHP2 billion allocated for the acquisition of assorted weapon systems and munitions.
(PNA)