Renats?
t!)f £’''f! i‘t-r'‘.'P
NINETEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE ^ ^
s.B. No. 2046
23 mar 23. P2 44
RECEIVED BY:
Introduced by SENATOR IMEE R. MARCOS
AN ACT
REVITALIZING AND STRENGTHENING THE SELF-RELIANT 
DEFENSE POSTURE PROGRAM TO ADDRESS EXTERNAL AND INTERNAL 
SECURITY THREATS AND CHALLENGES TO NATIONAL DEVELOPMENT, 
INCLUDING PANDEMICS AND PROMOTING THE DEVELOPMENT OF A 
NATIONAL DEFENSE INDUSTRY PUSUANT THERETO AND PROVIDING
FUNDS THEREFOR
EXPLANATORY NOTE
Article II, Section 3 of the 1987 Constitution provides that "the Armed Forces 
of the Philippines is the protector of the people and the State. Its goal is to secure 
the sovereignty of the State and the integrity of the national territory. Article XIV, 
Section 12 further provides that "the State shall regulate the transfer and promote 
the adaptation of technology from all sources for the national benefit. It shaM 
encourage the widest participation of private groups, local governments and 
comm unity-based organization of science and technology."
In recent years, the rivalry between the People's Republic of China and the 
United States of America has reached an all-time high and the relationship between 
both global superpowers has hit a new low. This rivalry continues to fuel the alrea y 
escalated tensions within the Indo-Pacific Region, placing the Philippines in a 
precarious situation militarily and economically.
Further, the threat of technological and cyber warfare continue to highlight 
the need for more advanced cyber security to protect the State. Moreover our 
vulnerability to outbreaks and biological warfare has been brought to the forefront 
by the CoVID-19 pandemic.
In light of these, in order to prepare and adapt to the evolving external and 
internal security threats in the 21st century and the shifting pronouncements of 
defense alliances between and among nations, it is imperative that the country 
should revitalize and strengthen its goal for self-reliance in defense.
The country's pursuit to modernize the Armed Forces of the Philippines, 
through the AFP Modernization Act (R.A. No. 7898, as amended), and its efforts to


achieve a minimum credible defense posture are monumental steps towards 
establishing a credible armed force to secure our sovereignty and the integrity of the 
national territory. However, the country remains heavily reliant on foreign 
governments, foreign defense contractors, and foreign suppliers to provide, mostly 
by purchase, the necessary hardware, weaponry or materiel, thereby contributing to 
the depletion of our foreign exchange reserve and squeezing further our budgetary 
constraints. Certainly, the revival and strengthening of the Self-Reliance Defense 
Posture (SRDP) Program will be a big boost to our modernization effort and in 
sustaining a credible Armed Forces of the Philippines. In fact, during the early years 
of the implementation of the SRDP program under Presidential Decree No. 415, 
which was issued on March 19, 1974, the program was able to manufacture 
armaments such as the M16 Assault Rifle, 60mm Mortar Tube, 81mm Mortar Tube 
and gun barrels; ammunitions like 5.56mm ammunition. Hand grenade MKII, and 
81mm Mortar Ammunition. The country was also able to produce vehicles like the 
jiffy jeeps, mini cruisers, hovercraft, speed boats, marcelo boats, PCF, LCVP and
whale boat.
This bill seeks to revitalize and strengthen the Self-Reliant Defense Posture 
(SRDP) program with the principal goal of accelerating the establishment of a 
defense industry in the country that will adequately address the requirements for the 
desired defense buildup and with maximum utilization of indigenous materials. The 
bill likewise seeks to capitalize on the recent amendments brought about by R.A. No. 
11647 to the Foreign Investments Act of 1991. Under the amended Foreign 
Investments Act, foreign nationals may now manufacture defense armaments in the 
Philippines without the need for such armaments to have a "substantial export 
component." Finally, the coverage of the SRDP shall be expanded to also address 
non-military challenges that are regarded as serious threats to national 
development, such as calamities, cyber-terrorism and pandemics.
For the foregoing reasons, the passage of this bill is earnestly sought.


lE'll Senate
^<£>fficr of the ^'tn pttirp
NINETEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE ^ ^
S B. No. 2046
23 HAR 21 P2-44
RECEIVED BTf: 7
Introduced by SENATOR IMEE R. MARCOS
AN ACT
REVITALIZING AND STRENGTHENING THE SELF-RELIANT 
DEFENSE POSTURE PROGRAM TO ADDRESS EXTERNAL AND INTERNAL 
SECURITY THREATS AND CHALLENGES TO NATIONAL DEVELOPMENT, 
INCLUDING PANDEMICS AND PROMOTING THE DEVELOPMENT OF A 
NATIONAL DEFENSE INDUSTRY PUSUANT THERETO AND PROVIDING
FUNDS THEREFOR
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Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled.
SECTION 1. Short Title. - This Act shall be known as the "Self-Reliance 
Defense Program Revitalization Act".
SEC. 2. Declaration of Policy. - The State recognizes the important role of a 
self-reliant defense posture in national development. Thus, there is a need to 
revitalize the self-reliance defense posture program amidst the growing and 
imminent external and internal security threats and other challenges to national 
development, including pandemics.
The State also recognizes the dynamic nature of the security environment, 
necessitating a drastic upgrade of defense capabilities to address conventional 
warfare and evolving security threats such as terrorism, insurgency, illegal drugs, 
natural calamities and public health emergencies. It is imperative that the 
government agencies tasked to defend against these varied threats have adequate 
and consistent access to materiel necessary to upgrade and sustain their capabilities. 
The State also acknowledges that domestic innovation will jumpstart local 
industrialization. Finally, the State recognizes the potential of the defense industry in 
generating employment opportunities and spurring the growth of in-country 
entrepreneurship.


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Therefore, it is the policy of the State to ensure that the development, 
production, assembly, repair, maintenance, or operation of materiel shall be done 
within the country to the extent possible.
SEC. 3. Definition of Terms. - As used in this Act:
(a) Countertrade refers to international trade by exchange of goods rather 
than by currency purchase;
(b) Critical components refer to components, systems, subsystems, and 
related special tooling and test equipment essential to the production, 
assembly, repair, maintenance, or operation of a weapon system or other 
items or equipment covered by this Act.
(c) In-country enterprise to a Filipino-owned enterprise engaged in the 
manufacturing, assembly, servicing, and operation of materiel in the 
Philippines, or to a foreign-owned enterprise engaged in the manufacturing, 
assembly, servicing and operation of materiel, and which has located a 
substantial portion of its production activities within the Philippines;
(d) Defense Materiel refers to military technology, weapon systems, arms, 
ammunition, combat clothing, armor, vehicles, and other similar military 
equipment and materials;
(e) Disaster-response Materiel refers to materials, equipment, machineries, 
and vehicles necessary to respond to calamities and disasters as well as those 
needed to address public health emergencies such as pandemics.
(f) SRDP participant refers to an in-country enterprise that is participating in
one or more SRDP projects.
SEC. 4. Self-Reliant Defense Posture Revitalization Council. - There is hereby 
created a Self-Reliant Defense Posture Revitalization Council (Council) under the 
administrative supervision of the Office the President. The Council shall sen/e as the 
policy making body and shall oversee the implementation of the revitalized self- 
reliance defense posture programs.
SEC. 5. Composition of the Council. -The council shall be composed of the 
Secretary of National Defense (DND) as its Chairman and the Secretary of the 
Department of Interior and Local Government (DILG) as its Vice-Chairman, and shall 
further be composed of the following officials as members:
a) 
Secretary of the Department of Foreign Affairs (DFA);
b) 
Secretary of the Department of Finance (DOF);
c) 
Secretary of the Department of Science and Technology (DOST);
d) 
Secretary of the Department of Budget and Management (DBM);
e) 
Secretary of the National Economic Development Authority (NEDA)


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f) 
Secretary of the Department of Health (DOH);
g) 
Secretary of the Department of Information and Communication
Technology (DICT);
h) 
Chief of the Philippine National Police (PNP);
i) 
Chief of Staff of the Armed Forces of the Philippines (AFP);
k) 
The National Security Adviser; and
l) 
Three representatives from the private local defense sector appointed 
by the President
The Council shall meet at least once every month.
SEC. 6. The Executive Committee. - The Council shall form an Executive 
Committee that shall be composed of the Chairperson of the Council and four 
members thereof, one of whom shall be a representative from the private sector. 
The Council may delegate to the Executive Committee such functions and powers as 
may be necessary to effectively and expediently implement the provisions of this 
Act. As used in this Act, the term "Council" shall be understood to refer to the 
Executive Committee if the particular function, power, or obligation to which such 
term relates has been delegated by the Council to the Executive Committee.
SEC. 7. The Secretariat of the Councii. -The Council shall have a Secretariat 
to be headed by an Executive Director. The staffing pattern of the secretariat shall 
be formulated by the Council, subject to the approval of the DBM, in accordance 
with Executive Order No. 292, otherwise known as the "Administrative Code of 
1987": Provided, That, the Secretariat shall have the following divisions which shall 
each to be headed by a Director having a rank of Director IV:
a) Research and development division;
b) Technology transfer division;
c) Project compliance monitoring division;
d) Administrative division; and
e) Audit division
The Council may, upon the recommendation of the Secretariat, create new 
divisions as may be necessary.
The Secretariat may engage the professional or technical services of 
consultants with proven expertise in engineering, weapons and materiel 
development, materiel assembly and production, and similar fields.


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SEC. 8. Functions of the Council and the Secretariat - The Council shall be 
the policy-making body for the SRDP and for the development of the defense 
industry.
The Secretariat shall advise the Council in the formulation of policies. In 
addition, the Secretariat shall carry out the following tasks:
a. Manage and administer a databank for analysis;
b. Conduct research and development, either independently or together with 
other government agencies and/or private entities, of materiel under the SRDP 
program. The Secretariat may outsource research and development projects to 
reputable local colleges, universities, and research institutions, provided that the 
necessary security clearances and confidentiality safeguards are first secured and 
instituted in accordance with the guidelines and regulations issued by the Council,
c. 
Coordinate the conduct of research, design, development, assembly, 
and/or production by government agencies and/or private entities of materiel under 
the SRDP programs;
d. Facilitate technology transfer from foreign entities to the Government or to 
Filipino enterprises
e. Establish or facilitate the establishment of public-private partnerships for 
the research, design, development, assembly, and/or production of materiel under 
SRDP programs;
f. Set up domestic and foreign collaborations;
g. Advise and recommend to the Council policies, rules and regulations on all
matters pertaining to SRDP and the defense industry;
h. Formulate specific SRDP projects for the design, development, production,
and/or assembly of materiel listed in the SRDP Program;
i. Perform such duties mentioned under this Act.
SEC. 9. Self-Reliant Defense Posture (SRDP) Program. - The Council shall 
formulate a revitalized Self-Reliant Defense Posture Program to address the short, 
medium, and long-term needs of the State for defense and disaster-response 
materiel under the following guidelines:
a) 
It shall be designed to provide as much advantage to in-country 
enterprises as possible, stimulate local labor, and help save on foreign currency 
exchange.
b) 
It shall incentivize manufacturers to start or relocate production or 
assembly of materiel into the country and to transfer defense and disaster-response


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technology to the Philippines while ensuring that local defense manufacturers and 
assemblers are amply protected against unfair competition.
c) 
It shall endeavor to ensure that the Philippines has sufficient access to 
resilient supply chains of materiel or critical components thereof deemed crucial to 
national security.
d) 
It shall ensure aggressive research and development undertakings by 
the Secretariat, the member agencies of the Council, and private entities involved in 
particular projects under the SRDP program and the utilization of new and advanced 
technologies for the purpose of upgrading existing inventory of equipment and 
weapons systems.
e) 
It shall encourage local innovative councils, invention societies, 
universities, and other institutions of higher learning to participate actively in the 
furtherance of science-based industrialization and shall provide the necessary 
research grants and development subsidies to participants of the program.
f) It shall complement the Philippine Development Plan and be aligned with 
the National Security Policy. It shall identify the current status of the country, its 
objectives and the measures to be taken to achieve the objective. It shall define 
development horizons to give time to the private industry to acquire the expertise 
and technology required to respond to a future government request for products.
g) It shall be aligned with the objectives of the Philippine Innovation Act 
enacted on April 2019 particularly on the specific objective of strengthening and 
deepening interactions and partnerships among different actors from the public and 
private sector, academe, MSMEs, research and development institutions, and 
communities towards promoting inclusive growth and improving the quality of life 
through innovation.
h) It shall contain, as far as practicable, a list of defense and disaster- 
response materiel that will be covered by the program. It will likewise specify the 
materiel that the Government or Government-owned and controlled corporations will 
produce on their own, those that will be co-developed with private entities, and 
those that will be farmed out in whole to private industry. It shall identify specific 
areas where prospective local and foreign-owned in-country enterprises can 
participate in, in support of attaining the overarching national goal of attaining a 
self-reliant defense posture.


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SEC. 10. Formulation of projects under the SRDP Program. - The Secretariat 
shall formulate specific projects for the development and production of each of the 
defense and disaster-response materiel listed in the SRDP Program.
If the materiel in question is one which the Government will develop, 
produce, assemble, service, or operate by itself, the lead agency or lead 
government-owned and controlled entity that will implement the development and 
production plan shall collaborate with the Secretariat in the formulation of aforesaid 
project.
If the materiel is one which will be developed, produced, assembled, serviced, 
and/or operated with private entities or one whose development, production, 
assembly, servicing, or operation will be farmed out in whole to the private sector, 
the Secretariat shall publish in two newspapers of general circulation and on its 
website the criteria and qualifications for participants of the project, the details and 
mechanics of the SRDP project in question, and the terms and conditions for 
participation in the project; Provided, however. That the Secretariat shall not publish 
details, specifications, and such other information that must be kept confidential by 
reason of national security.
SEC. 11. Implementation of projects under the SPDP. - No SRDP project 
formulated by the Secretariat may be implemented without the approval of the 
President, upon the recommendation of the Council.
For projects involving materiel that will be developed, produced, assembled, 
serviced, and/or operated solely by the Government, the lead agency or lead 
government-owned and controlled entity shall be primarily responsible for 
implementing and completing the project: Provided, That, it shall be the 
responsibility of the Secretariat to provide the lead agency or entity with the 
research and development assistance should it become necessary, either through 
the Secretariat's own resources or through other government agencies and entities 
directed by the Secretariat to render such assistance.
For projects conducted jointly by a government agency or entity and private 
enterprises, both shall be equally responsible for the implementation and completion 
of the same: Provided, That the responsibility of the Secretariat under the preceding 
paragraph shall likewise apply hereto.
For projects conducted solely by private entities, the implementation and 
completion of the same shall be the responsibility of said private entities: Provided, 
ThatVne Secretariat shall exercise supervision and monitoring for the entire duration


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of the project; Provided further, That the Secretariat shall, when circumstances 
warrant, extend development and research assistance.
SEC. 12. AFP Modernization and SRDP. - In formulating the list of defense- 
related materiel that will be covered by the SRDP Program, the Council shall ensure 
that at least fifty percent (50%) of the weapons, equipment, vehicles, and other 
materiel that shall be developed, manufactured, assembled, or serviced are among 
those listed or critical components of those listed for acquisition by the Armed Forces 
of the Philippines (AFP) under the Revised AFP Modernization Program and its 
subsequent extensions or amendments, if any.
SEC. 13. Enhancing the Capability and Readiness of Government Agencies to 
Respond to Disasters and Public Emergencies through the SRDP Projects. - In 
formulating the list of disaster-response materiel under the SRDP Program, the 
Council shall take into account the requirements of the DILG, the DND, the DOH, the 
local government units, and other government agencies involved in disaster- 
response in order to enhance their capability and readiness to effectively and safely 
respond to disasters and public health emergencies.
These projects shall, whenever necessary, be accompanied by the 
organization, training, and capacity building of special units of the government 
agency or agencies that will be the end-users of such materiel.
SEC. 14. Development of Technology and Systems to Counter 
Unconventional Threats. - The Council shall ensure that there shall be materiel 
under the SRDP Program that are designed to develop defense and/or disaster- 
response materiel that are necessary to effectively defend against or respond to 
chemical, biological, radiological, nuclear, and cyber-attacks or incidents. The 
Council shall likewise see to it that the DND, AFP, and any other government agency 
that may be involved in responding to such attacks or incidents upgrade and 
capacitate its special units tasked on chemical, biological, radiological and nuclear 
emergency response and risk mitigation.
SEC. 15. Government Arsenal Modernization. - The Government Arsenal 
shall be modernized and the Government Arsenal Defense Industrial Estate shall be 
developed into an industrial base to serve as the take-off point for the revitalization 
of the SRDP program.
The Secretary of National Defense shall implement a Master Development 
Plan to modernize the Government Arsenal and fully develop the Government 
Arsenal Defense Industrial Estate.


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SEC. 16. Modernization of the Phiiippine Aerospace Deveiopment 
Corporation. - The Council shall formulate a program for the Modernization of the 
Philippine Aerospace Development Corporation (PADC) to the end that the PADC 
shall be able to provide world-class support services and research for aerospace 
development and that it will be able to participate in the production, repair, 
assembly, and/or maintenance of air assets under the SRDP.
SEC. 17. Participation of the Locai Industry Sector. - The local industry 
sector representatives shall be consulted and tapped in the development and 
implementation of the SRDP program to ensure alignment of defense and disaster- 
response outcomes with industry requirements and add value qualifications within 
the workplace.
An institutionalized framework to operationalize a government - private sector 
partnership shall be established that will include guidelines in the creation of 
memoranda of understanding for liaising between government/defense entities and 
private sector stakeholders.
SEC. 18. Exemptions from the Government Procurement Reform Act. — 
Notwithstanding the provisions of Republic Act 9184, otherwise known as the 
Government Procurement Reform Act, and its implementing rules and regulations, 
the Government, upon advice of the Council, may enter into contracts, under such 
terms and conditions as may be agreed upon, with or without public bidding, for the 
procurement, manufacture, delivery, assembly, servicing, or operation of facilities, 
equipment, machineries, material, or components thereof that are necessary to 
conceptualize, design, manufacture, assemble, service, operationalize, or service the 
SRDP projects listed in the program: Provided, That the Secretariat shall certify that 
the consideration for such contracts is not excessive under the circumstances.
The Government may likewise procure, with or without public bidding, 
weapons, ammunition, systems, vehicles, equipment, and other materiel developed, 
manufactured, or assembled under SRDP or by in-country enterprises, provided the 
following circumstances are present:
a. The Secretariat shall certify that the weapon, ammunition, system, vehicle, 
equipment, or other materiel that will be procured was developed, manufactured, or 
assembled under the SRDP or by an in-country enterprise; that a substantial portion 
thereof, as defined by the Secretariat, was developed, manufactured, or assembled 
in the Philippines; and that the price of such weapon, ammunition, system, vehicle, 
equipment, or materiel is not excessive;


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b. The payment of the purchase/contract price shall be in Philippine Peso; and
c. The end user shall certify that such weapon, ammunition, system, vehicle, 
equipment, or other materiel is at least of similar quality and effectiveness as those 
manufactured by other countries and, if applicable, that the same will be 
interoperable with existing weapons, systems, equipment, or other materiel;
The procurement or engagement of professional or technical services by the 
Secretariat authorized under Section 6 of this Act shall likewise be exempted from 
the provisions of R.A. No. 9184 and its implementing rules and regulations.
Finally, insofar as the procurements under this under this Act involve and 
affect national security, the disclosure of the specific components of the 
procurement documents, such as, but not limited to, the technical specifications, 
requirements, and components, shall be dependent upon the head of the procuring 
entity having due regard to the nature, classification, sensitivity and confidentiality 
of the relevant documents.
SEC. 19. Preference for in-country enterprises. - In the event of a public 
bidding for the manufacture, assembly, servicing or operation of materiel or 
components thereof, in the evaluation of the criteria on price, when comparing 
foreign enterprises with in-county enterprises, regardless whether such in-country 
enterprise is an SRDP participant, the following shall be observed:
a. If the pubic bidding utilizes the standard of lowest calculated and 
responsive bid, the bids of in-country enterprises shall be considered as having a 
price less than that proposed by foreign enterprises as long as such bids shall not be 
more than fifteen percent (15%) in excess of the bid of such foreign enterprise, and
b. In the event a public bidding utilizes the standard of highest rated bid, bids 
of in-country enterprises shall be considered as having won the criteria of price as 
long as its bid shall not be more than fifteen percent (15%) in excess of the bid of 
such foreign enterprise
SEC. 20. Other exemptions for SRDP participants and in-country enterprises. 
— The requirement under Section 4 (b) of Republic Act 7898, as amended, that 
major equipment and weapons system that shall be purchased by the government 
must be used by the armed forces in the country of origin or used by the armed 
forces of at least two countries shall not apply to weapons, equipment, vehicle, and 
other materiel produced by SRDP participants and in-country manufacturers. SRDP


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participants and in-country enterprises shall also be exempt from the SLCC 
requirement.
SEC. 21. Sale by SRDP participants and in-country enterprises of materiel. - 
The sale by SRDP participants and in-country manufacturers of materiel produced in 
the country to any entity other than the National Government or any of its agencies 
must first be approved by Council. The Council may only deny approval of such sale 
on the ground that the same will be prejudicial to national security or that it will be 
violative of international law obligations of the Philippines. Unjustified failure of the 
Council to approve or reject such sale within sixty (60) days from submission of the 
request for permission to sell shall be deemed an approval thereof.
SEC. 22. Intellectual Property Office Special Lane. -The Intellectual Property 
Office shall establish a special lane to handle applications for patents, industrial 
designs, copyrights, and similar applications involving sensitive military and defense 
technologies, inventions, processes, and software in order to fast-track the 
evaluation and approval process and to ensure that confidential information 
pertaining to such applications are properly safeguarded.
SEC. 23. The National Defense Industry. - For the interest of the nation, and 
as an anchor of the SRDP, a National Defense Industry shall be developed in 
accordance with the following objectives:
a. To develop the defense capability of the country and the development 
support and security operations capability of the AFP, the State shall give preference 
to in-country enterprises, allocating substantial resources and manpower to defense 
research, utilizing to the fullest the country's natural resources as the source of the 
country's defense and security needs, and providing relevant technical and financial 
assistance to the private sector;
b. 
The State shall rely primarily on defense and security articles that are 
being produced, manufactured or developed by in-country enterprises. The State 
shall only use materiel from foreign sources when such materiel cannot be locally 
produced, manufactured or otherwise competitive to international standard. 
Provided that, importation from such foreign sources shall be for the ultimate 
objective of acquiring technology for the production of such unavailable materiel,
c. 
In order to reduce foreign exchange outflow, generate local 
employment opportunities, and enhance technology transfer to the Philippines, the 
Secretary of National Defense shall, as far as practicable, incorporate special foreign 
exchange reduction schemes and countertrade, in-country manufacture co-
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production, or other innovative arrangements or combinations thereof in 
contracts and agreements for the manufacturing and servicing of materiel,
all
d. 
To support the development of advanced and frontier technology 
products relevant to national defense and security manufactured by in-country 
entrepreneurs;
e. 
To win the commitment of private sector stakeholders to the long 
gestation period associated with building a viable defense and security industry, and
f. 
For defense and security materiel developed by or with the private 
sector, the Government shall promote the export of locally-made materiel to other 
countries, whether civilian or military, for an expanded market and shall provide 
financial marketing support for such promotion to ensure the sustainability of the 
local defense industry.
SEC. 24. Incentives. - (a) Any provision of law to the contrary 
notwithstanding, foreign or local enterprises engaged or proposing to engage in the 
development, manufacture, assembly, servicing and/or operation of materiel for 
Government may be registered with the Board of Investments and may avail of the 
incentives under R.A. 11534: Provided, That, such enterprises shall locate a 
substantial portion of its development process, manufacturing, assembly, or 
servicing in the country.
The development, manufacture, assembly, servicing and/or operation of 
materiel shall be included in the Strategic Investment Priority Plan every year by 
operation of law after the effectivity of this Act until otherwise removed by the Board 
of Investments or the President; Provided, That the removal of manufacturing, 
servicing, and/or operation of materiel from the Plan subsequent to the effectivity of 
this Act shall not be interpreted as a bar or restriction on the Board of Investments 
from later including the manufacturing, servicing and/or operation of materiel in the
Plan.
In the interest of National Security, the Board of Investment shall adopt a 
special procedure in the processing of applications for registration by enterprises in 
the Industry and offering goods and services to the Government.
(b) Government financial institutions are highly encouraged to support the 
Industry by formulating and extending financial products that would benefit its 
hastened development.
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(c) In addition to the incentives under existing laws, in-country enterprises 
engaged in the development, manufacture, assembly, servicing and/or operation of 
materiel registered with the Board of Investment shall enjoy exemption from 
customs duties and national internal revenue taxes payable on the importation of 
raw materials and critical components imported for the purpose of developing, 
manufacturing, assembling, servicing, and/or operating such materiel.
SEC. 25. Reportoria! Requirements. - The Council shall, not later than the 
end of the first quarter of the succeeding year, submit to the President and the 
Congress:
a) An annual report on the acquisitions made under this Act;
b) Status of local defense industry indicating therein information, such as, but 
not limited to, the total number of in-country enterprises, the total value and volume 
of materiel produced by in-country enterprises, and the total Filipinos employed by
in-country enterprises.
c) Status of SRDP projects
d) Copies of multi-year contracts and other agreements entered into by the 
Government for the acquisition of materiel
The NEDA shall submit to Congress not later than June 30 of each year an 
annual review of the status of all acquisitions under this Act, identify causes of 
delays, the reasons for bottlenecks, actual and prospective cost overruns, as well as 
its findings on the continued viability of the SRDP and the defense industry. NEDA 
shall likewise develop a Key Performance Indicator in the Philippine Development 
Plan that will reflect the condition of the capability of the defense industry to provide 
the military the defense equipment, materiel, and systems that are essential for it to 
perform its mandate.
The Commission on Audit (COA) shall conduct an audit on each ongoing and 
completed SRDP projects and all acquisitions under this Act.
SEC. 26. Congressional Oversight Committee. - There is hereby created a 
Congressional Oversight Committee to monitor progress of the implementation of 
the provisions of this Act. The Committee shall, among others, in aid of legislation 
monitor and ensure the implementation of this Act.
The Committee shall be composed of six (6) members of the Senate and six 
(6) members of the House of Representatives with the Chairpersons of the 
Committees on National Defense and Security of both Houses as Joint Chairpersons. 
The five (5) members from each Chamber shall be designated by the Senate
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President and the Speaker of the House of Representatives, respectively. The 
Minority shall have one (1) representative from both Chambers.
SEC. 27. Appropriations. - The sum of One billion pesos 
(P1,000,000,000.00) is hereby appropriated as initial fund to carry out this Act, 
taken from the current fiscal year's appropriation of the AFP modernization fund. 
Thereafter, the amount needed for the implementation of this Act shall be included 
in the General Appropriations Act.
SEC. 28. Implementing Rules and Regulations. - Within sixty (90) days 
from the effectivity of this Act, Council shall promulgate the necessary rules and 
regulations for the effective implementation of this Act. The Secretariat may likewise 
promulgate the necessary rules and regulations for formulation, implementation, and 
evaluation of SRDP projects and for the issuance of the certifications it is required to 
issue in appropriate circumstances under this Act.
SEC. 29. Separability Clause. - Should any provision herein be declared 
unconstitutional, the same shall not affect the validity of other provisions of this Act.
SEC. 30. Repealing Clause. - All laws, decrees, orders, rules, and 
regulations or other issuances of parts inconsistent with the provisions of this Act are 
hereby repealed or modified accordingly.
SEC. 31. Effectivity. - This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette ov in any two (2) newspapers of general circulation 
in the Philippines.
Approved,
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