Philippines urged to tie US ammunition plant to transfer of technology

By Kenneth Christiane L. Basilio, Reporter

THE Philippine government should secure binding technology‑transfer provisions if it allows a US‑backed ammunition facility to be built in the country, political analysts said, arguing the project must advance Manila’s self‑reliant defense posture rather than function mainly as a supply‑chain node for Washington.

The US Department of Defense said a defense industry partnership in the Indo‑Pacific region is evaluating the Philippines as a possible host for an ammunition production site intended to support munitions widely used by military aircraft and ground forces. The plan is part of a broader effort to disperse manufacturing capacity among allied states in the region.

“This must be treated as a self-reliant defense posture initiative,” Michael Henry Ll. Yusingco, a senior research fellow at the Ateneo Policy Center, said in a Facebook Messenger chat. “This cannot be presented as a mere foreign direct investment or an accommodation of US interests.”

President Ferdinand R. Marcos, Jr. in 2024 signed a law directing the government to pursue a defense posture reliant on domestic manufacturing, as the Philippines seeks to strengthen its production base amid tensions with China in the South China Sea.

The Self‑Reliant Defense Posture Revitalization Act allows foreign companies to operate through joint ventures with local companies, provided Filipinos retain at least 60% ownership.

It also offers incentives, including exemptions from value‑added tax and import duties on raw materials and equipment used for defense manufacturing, reducing startup costs while promoting local participation.

Sherwin E. Ona, an international fellow at Taiwan’s Institute for National Defense and Security Research, said the proposal provides an opening to jump‑start the Philippines’ self‑reliance program, which has faced constraints from limited capital and industrial depth.

To ensure lasting benefits, the government must insist on comprehensive technology transfer, analysts said. “Establishing the manufacturing facility must be part of a broader effort to build a defense industry in the country,” Mr. Yusingco said. “There must be full transfer of production know‑how to Filipino partners.”

That requirement should include practical training across the production chain, he said, so local workers gain expertise in loading, assembly and packaging rather than being confined to auxiliary roles.

Workforce development is essential if the facility is to contribute to industrial capability rather than operate as an enclave.

Producing ammunition domestically would improve supply stability for the Philippine military, particularly for calibers used extensively by its air and ground units, Mr. Ona said.

He added that Manila should negotiate assured purchase agreements so a portion of the output is reserved for the armed forces at predictable prices.

The government could also study the feasibility of producing howitzer rounds at the site, broadening its market and aligning capacity with the military’s modernization plans. Over time, related industries could emerge, including unmanned system manufacturing, as skills and supplier networks expand, Mr. Ona said.

The Pentagon said the 16‑nation Partnership for Indo‑Pacific Industrial Resilience, which includes the Philippines, is also examining co‑production arrangements for aerial drones, signaling that ammunition manufacturing could be one element of a wider industrial footprint in the region.

China has criticized the proposal. Its foreign ministry last week warned that ammunition production in the Philippines could destabilize the region and invite “conflict and the chaos of war,” Agence France Presse reported.

Beijing claims sovereignty over much of the South China Sea based on a so‑called nine‑dash line map dating to the 1940s. The claim overlaps with the Philippines’ exclusive economic zone, where Chinese coast guard and maritime militia vessels have operated despite a 2016 ruling by a United Nations‑backed arbitral tribunal that voided those claims. China has rejected the decision.

Opposition has also emerged within the Philippines. Left‑wing organizations and a bloc of minority lawmakers in the House of Representatives said the facility could expose the country to retaliation from adversaries of the US.

“The Philippines has a Mutual Defense Treaty with the US, so there is always a risk of retaliation from Washington’s adversaries regardless if ammunition facilities are established in the Philippines or not,” Francis Rico C. Domingo, an associate professor at the University of the Philippines’ Political Science Department, said in an e-mailed reply to questions.

Manila could not quickly achieve defense self‑reliance, he said, adding that the government should ensure that the military is operationally and strategically aligned.