Philippines probes munitions from Israel

MANILA (Reuters) - The Philippines has initiated an inquiry into what it says was defective ammunition for mortars provided by an Israel-based defence manufacturer last year, the defence secretary said on Monday.

Gilberto Teodoro said officials who inspected and took delivery of the munitions, worth 125 million pesos ($2.6 million), would be held liable.

The Philippine military is critically low on munitions after an 11-month conflict with renegades from the country's largest Muslim separatist group, a senior army general has said.

Teodoro said the military deserved "the best and the cleanest utilisation of (its) money.

"This is a case of delivering an item which is not according to the specifications," he told defence department workers. "It appeared that there were some parts of the mortar round that were made in one country and another part manufactured elsewhere."

The inquiry could further delay the award of a 1.5 billion pesos ($32 million) order of munitions, which Talon, the Israeli company, is contesting in a pending court case in Manila.

Talon denies the munitions are defective.

It secured a court order three months ago stopping the defence department from awarding a contract for 1.5 billion pesos worth of munitions to a South Korean company after reversing a decision by the bids panel to award the deal to Talon.

(Reporting by Manny Mogato; Editing by Raju Gopalakrishnan and Ron Popeski)