NINETEENTH CONGRESS OF THE ] 
REPUBLIC OF THE PHILIPPINES ] 
Second Regular Session 
]
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23 DEC 13 P3 55
RECEIVED BV.
SENATE
S.B. No. 2516
Introduced by SEN. WIN GATCHALIAN
AN ACT
MODERNIZING THE PHILIPPINE COAST GUARD, CREATING FOR THIS 
PURPOSE THE PHILIPPINE COAST GUARD MODERNIZATION TRUST FUND, 
APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES
EXPLANATORY NOTE
Being an archipelago with 7,641 islands and a shoreline of more than 36,000 
kilometers, the Philippines hosts a vast array of waters containing diverse aquatic life 
and marine resources that serves as a source of livelihood for coastal communities 
and functions as a fundamental shipping route for trade and commerce.
With the sheer size of the maritime domain of the country, it is imperative that 
our government provide the necessary support to have a responsive, well-equipped 
and well-manned Philippine Coast Guard with enhanced technical, operation and legal 
capabilities on maritime safety, maritime security, maritime search and rescue, 
maritime law enforcement and maritime environmental protection to ensure our 
maritime presence, to enforce applicable Philippine laws, to conduct maritime security 
operations and to safeguard life and property at sea.
It cannot be overemphasized that the Philippine Coast Guard plays a crucial 
role in the country's pursuit of ensuring maritime safety and security, environmental 
protection, and search, rescue and disaster response. With the advent of various


maritime issues currentiy faced by the country from maritime accidents and incidents, 
such as oii spiiis, ship coilisions and grounding to ongoing harassment in the West 
Philippine Sea, there is a need to continuously modernize and enhance the capabilities 
of our Philippine Coast Guard to respond to all these incidents effectively.
Accordingly, this measure proposes a modernization program of the Philippine 
Coast Guard (PCG) that aims to enhance its assets and facilities, bolster its capabilities 
and strengthen the effective implementation of its mandate under Republic Act No. 
9993, otherwise known as the Philippine Coast Guard Law, and is intended to be 
implemented every three years for a total period of twelve years. It also creates a 
PCG Modernization Trust Fund, which shall be used for its implementation and to be 
sourced from the General Appropriations Act, Oil Pollution Management Fund, grants, 
donations and endowments, sales of proceeds from sale, lease, or joint development 
of assets, unused or undisbursed funds, other than the unused appropriations for PCG 
personnel, among others, and to be administered by the Secretary of Transportation. 
It also sets aside One Hundred Billion Pesos for the first implementation period, which 
shall be renewed every implementation period.
With all these considerations, support for the passage is earnestly sought.
GATCHALIAN


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NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session
S. B. No.
SENATE
2516
23 DEC 13 P3S5
RECEIVED BY:
Introduced by SEN. WIN GATCHALIAN
AN ACT
MODERNIZING THE PHILIPPINE COAST GUARD, CREATING FOR 
THIS PURPOSE THE PHILIPPINE COASTGUARD MODERNIZATION 
TRUST FUND, APPROPRIATING FUNDS THEREFOR AND FOR OTHER
PURPOSES
Be it enacted by the Senate and the House of Representatives of the Phiiippines 
in Congress assembied:
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SECTION 1. Short Tide. — This Act shall be known as the "PCG
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Modernization Act."
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SEC. 2. Deciaration of Poiicy. — It is hereby declared the policy of the
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State to modernize the Philippine Coast Guard (PCG) to a level where it can
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effectively and fully perform its constitutional mandates to ensure the maritime
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safety, maritime environmental protection, and maritime security of the
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Republic of the Philippines. Toward this end, the principal thrusts of the
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modernization program under this Act shall be:
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(a) The development of a more mobile and visible coast guard force that
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will establish its vision of a "world-class guardian of the sea" by 2035;
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(b) The acquisition and upgrading of appropriate technology and
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equipment; and
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(c) The strategic improvement and construction of bases, installations,
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and other PCG facilities.
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SEC. 3. Objectives. — The PCG modernization program shali be
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impiemented in accordance with the foiiowing objectives:
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(a) To deveiop its capabiiity to uphold the sovereignty, territorial
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integrity, and sovereign rights of the Republic of the Philippines and to maintain
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security and safety of the maritime domain from all forms of maritime incidents
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and transnational crimes;
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(b) To develop its capability to support other government agencies in
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the preservation of the national patrimony, including the country's living and
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non-living marine, submarine, mineral, coastal forest, and other natural
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resources located within its territory and its exclusive economic zone (EEZ);
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(c) To enhance its capability to fulfill its mandate to protect the Filipino
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people not only from armed threats at sea but from the ill effects of life
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threatening and destructive consequences of disasters and calamities, including
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typhoons, earthquake, tsunami, volcanic eruptions, oil spills, major accidents
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in the far-flung or inaccessible areas at sea, and from all forms of ecological
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damage;
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(d) To improve capability and capacity in the enforcement of domestic
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and foreign policies as well as international accords against smuggling, piracy,
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armed-robbery, poaching, illegal fishing, smuggling, drug trafficking, hijacking
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of sea craft and vessels trade in human beings and other serious international
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crimes, drug-trafficking, and the transport of toxic and other ecologically-
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harmful substances taking place in or through Philippine territory;
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(e) To enhance its capability towards inter-agency coordination in
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terms of maritime law enforcement and maritime counter-terrorism;
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(f) To enhance its capability to fulfill the country's international
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commitments; and
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(g) To develop its capability to support national development.
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SEC. 4. Development of PCG Capabilities. — The PCG modernization
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program shall be geared towards the development of the following capabilities:
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(a) Development of floating assets. — The enhanced fleet operations shall
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enable the PCG to:


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i. Patrol the Philippine maritime jurisdiction to include the Exclusive
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Economic Zone (EEZ) for the enforcement of all applicable laws;
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ii. Protect and preserve all coastal, near coastal and riparian living
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and nonliving marine resources;
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iii. Provide transportation of personnel and material in times of
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natural disaster and rescue operations; and
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iv. Conduct search and rescue operations during maritime incidents
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such as fire at sea, collisions, groundings, oil spills, and flash floods,
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among others.
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(b) Development of air assets. — The enhanced air operations shall
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enable the PCG to:
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i. Patrol, detect, and challenge, if necessary, any vessel and aircraft
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illegally intruding into or passing through 
the Philippines' EEZ
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management, up to areas near or around the Philippine territorial limits;
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ii. Conduct maritime air operations in support of PCG missions;
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iii. Provide airlift, search and rescue, rapid deployment and related
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support in disaster and other civilian relief operations; and
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iv. Support the Philippine naval armed forces.
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(c) Development of Maritime Domain Awareness (MDA) capabilities. —
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The PCG shall acquire and upgrade contemporary, modern, and state-of-the
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art equipment and systems to enhance its MDA capabilities in the performance
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of its mandate;
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(d) Development of fleet support and infrastructure. — The PCG shall
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acquire, construct, develop, and upgrade its infrastructure and facilities for the
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following:
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i. Response bases for all operational units of the PCG;
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ii. Coast Guard stations and substations; and
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iii. Training, ship/aircraft repair and maintenance, and logistics for
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PCG operating units;
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(e) Deveiopment of national headquarters capabilities. — The
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modernization of the PCG requires the renovation and development of the


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national headquarters capabilities for command, control, communications, and
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information systems network.
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SEC. 5. Components of the PCG Modernization Program. — The
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components of the PCG Modernization program shall be divided into four tiers
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in line with its capabilities, as follows:
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(a) First Tier: Development of PCG Response Bases and Enhancement
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of Maritime Domain Awareness Capabilities.
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i. Response Bases. — The PCG modernization program shall entail
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the construction and development of permanent response bases to
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house all PCG operational units, such as Marine Laboratories, Search and
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Rescue Vessels (SARVs), Offshore Patrol Vessels (OPV), Maritime
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Pollution Vessels (MARPOL vessels), and others to allow the PCG to
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rapidly respond to maritime emergency calls in the most efficient and
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effective manner;
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ii. Maritime Domain Awareness (MDA) Capabilities. — The PCG
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modernization program shall entail the acquisition and upgrade of
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equipment and systems such as Radar Stations, Lighthouses, Unmanned
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Aerial Vehicles, Unmanned Underwater Vehicles, and SARVs to enhance
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MDA capabilities;
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(b) Second Tier: Development of Infrastructure and Interdiction
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Capabilities.
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i. Interdiction Capabilities. — The PCG modernization program
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entails the acquisition of state-of-the-art vessels and equipment to
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enhance interdiction and law enforcement capabilities;
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ii. Coast Guard Stations and Substations. — The PCG modernization
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program entails the improvement and development of infrastructures
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and facilities of Coast Guard stations and substations: Provided, that
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each shoreline municipality shall have its own substations, be fully
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equipped, and have constant or uniform stations: Provided further, that
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substations will serve as its smaller unit;


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iii. MARPOL (Maritime Pollution) Vessels. — The PCG modernization
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program shall acquire MARPOL vessels to strengthen the marine
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environment protection mandate of the PCG.
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(c) Third Tier: Acquisition and Development of Patrol Vessels and Air
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Capabilities.
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i. Offshore Patrol Vessels. — The PCG modernization program shall
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develop and acquire new OPVs to strengthen coastal defense and the
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management of the country's EEZ. The acquisition of OPVs shall enable
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the PCG to:
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1. Patrol, detect, intercept, engage, and challenge, if
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necessary, any vessel illegally intruding into or passing through
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the Philippines' EEZ, up to areas near or around the Philippine
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territorial limits;
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2. Provide transportation of personnel and material in times
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of natural disaster and rescue operations;
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3. Conduct search and rescue operations during maritime
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incidents; and
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4. Support the Philippine naval armed forces.
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ii. Aircrafts. — The PCG modernization shall acquire and develop
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aircrafts to enable the PCG to:
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1. Strengthen maritime and airspace security in different
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areas and stations;
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2. Patrol, detect, and challenge, if necessary, any vessel
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and aircraft illegally intruding into or passing through the
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Philippines' EEZ management, up to areas near or around the
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Philippine territorial limits;
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3. Support its operations as a law enforcement arm and a
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nautical service; and
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4. Support the Philippine naval armed forces.
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(d) Fourth Tier: Infrastructure and Facilities Development.


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i. Development and Improvement of Training Facilities. — The PCG
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modernization program shall entail the development and improvement
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of training facilities for study, training, professional progress, and
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exercise. This shall allow the PCG to obtain game changing equipment
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and facilities that will assist and empower PCG personnel;
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ii. Construction and Development of Shipyards. — The PCG
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modernization program shall provide for the construction and
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development of shipyards that can contribute to regional industrial
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infrastructure and national security Interests; and
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iii. Construction and Development of Hangars. — The PCG
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modernization program shall entail the construction and expansion of
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hangars that serves as protection from the weather and direct sunlight,
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and for maintenance, repair, production, assembly, and storage of
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aircraft.
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SEC. 6. Period of implementation. — The modernization program under
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this Act shail be implemented every three (3) years, reflecting the four (4) tiers
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as stated under Section 5 of this Act, for a total period of twelve (12) years:
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Provided, however, that payments for the amortization of outstanding multi-
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year contract obligations incurred under this Act may extend beyond this
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period.
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SEC. 7. Submission to Congress. - Within ninety (90) days from the
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effectivity of this Act, the President, upon the recommendation of the
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Secretaries of the Department of Transportation, Department of Budget and
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Management, and the Department of Finance, shall submit the PCG
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Modernization Program to Congress. It shall contain the following:
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i. Personnel strength and inventory of facilities and equipment
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during the various phases of the modernization program;
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ii. Modernization projects and activities to be undertaken, including
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any major weapon and non-weapon equipment and technology
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acquisitions, any major infrastructure construction or improvement to be


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undertaken, and the particular objective(s) and component(s) under
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Sections 3 and 4, respectively, of this Act to which such intended
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acquisition, construction or improvements belongs; and
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iii. Priorities, schedules, and phases of implementation of
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modernization projects and activities; and
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iv. Estimated average cost for each modernization project or activity
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to be undertaken.
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Thereafter, the PCG shall, through the DOTr Secretary, submit to the
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Office of the President and Congress, an annual report containing the progress
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and status of the implementation of the BFP Modernization Program.
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SEC. 8. Appropriations. — The annual appropriations for the PCG
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Modernization Program shall include the amounts necessary to support the
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funding requirements for all the modernization components approved by
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Congress under the preceding sections.
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The appropriated funds under this Act shall be considered distinct and
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separate from the regular appropriations for the Department of Transportation.
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Such funds shall be facilitated by the Secretary of the Department of
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Transportation for its proper implementation.
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The amount of One Hundred Billion Pesos (PhP 100,000,000,000.00)
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shall be appropriated for the implementation of this Act: Provided, that such
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amount may be increased thereafter, subject to the requirements of the PCG
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Modernization Program.
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SEC. 9. PCG Modernization Trust Fund. — There is hereby created a trust
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fund, to be known as the PCG Modernization Trust Fund, which shall be used
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exclusively for the implementation of this Act and shall be funded out through
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the following:
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(a) Appropriations for the PCG Modernization Program pursuant to
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the provisions of this Act;


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(b) Sale of proceeds from the sale, lease or joint development of
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assets, and disposal of excess and/or uneconomically repairable
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equipment and other movable assets of the PCG;
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(c) Dues, fines, and penalties collected by the PCG in the exercise of
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its functions;
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(d) Grants, donations and endowments from various domestic and
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foreign sources;
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(e) Unused or undisbursed funds, other than unused appropriations for
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salaries and benefits of the PCG personnel, remaining from all previous
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appropriations;
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(f) Savings from austerity measures by the PCG, generated in the
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previous fiscal year; and
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(g) All interest income of the Trust Fund,
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The trust fund shall be administered by the Secretary of Transportation,
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in accordance with existing government auditing rules and regulations.
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SEC. 10. Multi-year Contracts and Other Contractual Arrangements. -
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(a) The Secretary of Transportation, pursuant to the PCG
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modernization program, projects and appropriations approved by Congress,
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may, subject to the approval by the President, the provisions of existing laws
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and regulations including those of the Commission on Audit and under such
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terms and conditions most favorable to the government, enter into multiyear
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contracts, lease and lease-purchase agreements;
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(b) For multi-year contracts. Congress shall, upon certification by the
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President, make the corresponding appropriation for the ensuing fiscal year:
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Provided, that Congress shall appropriate only such funds as may be necessary
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to pay any unpaid amount where such funds mentioned in Section 8 and 9 of
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this are not sufficient or available to meet such payment in full or in part; and
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(c) The Secretary of Transportation shall submit to Congress, through
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the Congressional Oversight Committee, copies of these multi-year contracts
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and other agreements/arrangements to enable Congress to appropriate funds.
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SEC. 11. PCG Procurement System. — The Department of Transportation 
and the PCG shall strengthen its systems and procedures for equipment 
acquisition, taking into account the new requirements under the PCG 
Modernization Program. Contract negotiations, and equipment, vessel and 
facilities acquisition shall be treated as two sequential but separate steps, each 
requiring the separate decision of the Secretary of Transportation. Both the 
decision-making and contract negotiation processes for its acquisition shall start 
at the PCG level and be submitted to the Secretary of the Department of 
Transportation.
In its systems and procedures for equipment acquisition, the provisions 
of RA 9184, as amended, and other applicable laws shall apply.
SEC. 12. Guidance for the President. — To meet unforeseen national 
security emergencies, the President, upon the recommendation of the 
Secretary of Transportation, may modify the program through substitution or 
revision of a component project therein: Provided, however, that he shall report 
such action to Congress within thirty (30) days from the commencement of 
such emergency.
SEC. 13. Annuai Reports. — Not later than the end of the first quarter of 
the succeeding year:
(a) 
The Secretary of Transportation shall submit to the President and 
Congress an annual report on the status of the PCG Modernization Trust 
Fund, as provided for in Section 9 of this Act;
(b) 
The Commandant of the PCG shall submit to the President and 
Congress, through the Secretary of Transportation, an annual report containing 
the progress of the implementation of the modernization program under this 
Act to include the PCG modernization activities implemented prior to the 
approval of this Act.
SEC. 14. Joint Congressionai Oversight Committee. — There is hereby 
created a Joint Congressional Oversight Committee on PCG Modernization to


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monitor and oversee the implementation of the provisions of this Act. The Joint 
Congressional Oversight Committee shall be jointly chaired by the Chairpersons 
of the Senate Committee on Public Services and the House of Representatives 
Committee on Transportation. It shall be composed of six (6) members from 
the Senate and six (6) members from the House of Representatives, to be 
appointed by the Senate President and the Speaker of the House of 
Representatives, respectively.
SEC. 15. Separability Clause. - If any provision or part of this Act be 
declared invalid or unconstitutional, the other provisions or parts not affected 
thereby shall remain valid and in full force and effect.
SEC. 16. Repealing Clause. - All laws, decrees, orders, resolutions and 
other issuances, or portions thereof, which are inconsistent with the provisions 
of this Act, are hereby repealed, amended or modified accordingly.
SEC. 17. Effectivity. -This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in a newspaper of general circulation.
Approved,
10