June 23, 2015 / 9:29 AM / 2 years ago

Foreign arms firms considering manufacturing in Philippines: official

MANILA (Reuters) - Weapons and munitions manufacturers from Canada, the United States, South Korea and South Africa are considering setting up operations in the Philippines once its first defense economic zone is launched, a senior government official said on Tuesday.

Rheinmetall Denel Munition of South Africa and a unit of South Korea’s S&T Holdings Co. top the list of defense companies looking to lease land in the Southeast Asian country, said Roger Gamban, chief of the state agency overseeing the country’s weapons and munitions output.

U.S.-based Colt’s Manufacturing Co and Canada’s Waterbury Farrel are also considering manufacturing in the Philippines, he told Reuters.

The move to launch a defense economic zone in the northwest Bataan province by August comes as Manila has become increasingly uneasy about China’s assertiveness in the South China Sea.

Under President Benigno Aquino, the Philippine government has embarked on a five-year, 75 billion-pesos ($1.68 billion) modernization program to improve its capability to defend its maritime borders.

The South Korean company has firmed up a proposal for a 2 billion pesos ($44 million) firearms manufacturing plant in the defense zone, Gamban said. Waterbury plans to set up a 2-billion-peso facility in the country, he said.

All four firms did not immediately respond to emails or calls by Reuters.

The Philippines currently produces munitions only for small caliber firearms, and imports all its medium and large caliber ammunitions. By getting foreign firms to produce munitions in the country, the government will cut short its procurement process and create jobs, Gamban said.

($1 = 45.13 Philippine pesos)

Reporting by Rosemarie Francisco; Editing by Muralikumar Anantharaman

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