July 7, 2022
9:31 pm
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Republic of the Philippines  
House of Representatives 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
House Bill No. ___________ 
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Introduced by Representative Albert Raymond S. Garcia 
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AN ACT 
INSTITUTIONALIZING A PHILIPPINE SELF-RELIANT DEFENSE POSTURE 
PROGRAM AND PROMOTING THE DEVELOPMENT OF A NATIONAL DEFENSE 
INDUSTRY PURSUANT THERETO  
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Short Title. – This Act shall be known as the “Philippine Self-
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Reliant Defense Posture Program Act”. 
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SEC. 2. Declaration of Policy.– It is hereby declared the policy of the State to 
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promote and spur the growth of an independent national defense by establishing a self-
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reliant defense posture program that shall prioritize the development of the country’s 
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national defense capabilities, including a competent domestic defense industry. 
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In view thereof, the State shall endeavor to develop a National Defense Industry, 
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hereinafter referred to as Industry, as an indispensable element of national defense. 
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The State recognizes that: 
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(a) The industry plays a vital role in nation-building in the achievement of the
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national vision of an independent and self-reliant sovereign state, capable of
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providing its own resources for defense, security, and national survival,
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specifically during war and other national emergencies;
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(b) The active participation of development of collaborative partnerships with the
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private sector is an important strategy in the development of a viable, world-
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class defense industry and that the grant of incentives for such participation can
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help ensure the sector’s meaningful contribution thereto;
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(c) The continued observance of the “Filipino First” policy in developing the
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Philippines’ defense capability is consistent with the country’s national security
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aspirations; and,
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(d) The Philippines has adequate human and other resources that can help ensure 
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the adequate supply of affordable, globally-competitive, high- quality defense 
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implements, equipment, machinery, systems and solutions, conduct defense 
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technology research, provide and develop defense-related technology, as well 
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as engineering and design education and training services that are necessary to 
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the development of the Industry.  
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(e) Science and technology, academic research and development institutions, and 
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technology transfer all play an important role in the development of effective 
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defense capabilities, the undertaking of successful defense missions, and the 
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achievement of peace and meaningful modernization.  
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Therefore, to foster the progressive growth of the industry and hasten defense self-
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sufficiency, the government shall strengthen and revitalize the Self-Reliant Defense 
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Posture Program (SRDP), incentivize private sector participation in the Industry, 
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rationalize defense acquisition, and create the Office of the Undersecretary for Defense 
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Technology Research and Industry Development  
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SEC. 3. Definition of Terms. – As used in this Act: 
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(a) Acquisition refers to the management and procurement process of the 
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government that helps ensure the proper and timely investment in technologies, 
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programs and product support necessary for the purposes of the Philippine Armed 
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Forces in promoting national defense and security. It shall include the acquisition of 
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raw material, competent human resources, critical components and materiel;  
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(b)Countertrade refers to international trade by exchange of goods rather than 
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by currency purchase;  
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(c)Critical components refer to components, systems, subsystems, and related 
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special tooling and test equipment essential to the production, repair, maintenance, or 
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operation of weapon systems or other items of equipment identified as being essential 
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to the execution of any national defense and national security strategy.  
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(d)Highest rated bid refers to the offer with the highest calculated rating based 
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on the criteria and parameters not limited to capability, quality, timeliness of delivery, 
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life cycle cost, after-sales support, transfer of technology, warranty, prerequisites and 
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price;  
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(e) In-country enterprise refers to a Filipino-owned enterprises engaged in the 
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manufacturing, servicing and operation of materiel in the Philippines, or to a foreign-
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owned enterprise engaged in the manufacturing, servicing, and operation of materiel, 
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and which has located a substantial portion of its production activities within the 
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Philippines;  
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(f) Integrated logistics support refers to an integrated and iterative process for 
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developing materiel and a support strategy that optimizes functional support, leverages 
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existing resources, and guides the system engineering process to quantify and lower 
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life cycle cost and decrease the logistics footprint, making the system easier to support;  
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(g) Materiel refers to military technology, materials and equipment, including arms and 
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ammunition and combat clothing; 
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(h) Minimum local content refers to the minimum percentage of intermediate 
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goods used in the manufacturing processes to be sourced from in-country enterprises; 
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(i) National defense refers to the policies, measures and initiatives intended to 
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provide the necessary protection to the State against external and internal 
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threats; 
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(j) National security refers to a state or condition wherein the people’s welfare, 
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well-being, way of life; government and its institutions; territorial integrity; 
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sovereignty; and core values are enhanced and protected; 
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(k) Servicing refers to the process of maintaining, repairing or overhauling 
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materiel; 
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(l) Strategic Investments Priorities Plan (SIPP) refers to the government’s list of 
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priority areas and preferred activities that shall be entitled to tax incentives under 
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law.  
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SEC. 4. Self-Reliant Defense Posture Program. – The Self-Reliant Defense 
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Posture Program is hereby established and instituted as the tool of the State to 
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undertake the development of a national defense industry. The underlying concept of 
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self-reliance shall be manifested in the continued preference on local production when 
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feasible, of materiel for the country’s defense forces through the partnership between 
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the military and civilian establishments, and taking the recourse to importation only for 
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those requirements that cannot be locally produced with the ultimate objective of 
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acquiring the technology for the production of these materiel. Paramount to the 
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attainment of this objective is the responsibility of the military and other government 
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agencies to provide technical and financial assistance to civilian defense 
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manufacturers.  
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SEC. 5. National Defense Industry. – The National Defense Industry shall be 
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developed in accordance with the following principles: 
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(a) The foreign support for defense requirements shall be subject to this Act and 
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the policies approved by the President; 
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(b) To develop the defense capability of the country, the State shall:  
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(1) Rely primarily on and give preference to In-country enterprises, allocate 
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substantial resources and manpower to defense research, and provide 
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relevant technical and financial assistance to the private sector; 
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(2) Utilize to the fullest the country’s natural resources as the source of the 
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country’s defense needs, and rely on materiel readily available, produced, 
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manufactured or otherwise created locally; and,  
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(3) Use materiel from foreign sources only when such materiel cannot be 
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locally produced, manufactured or otherwise created: Provided, That, 
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importation from such foreign sources shall be for the ultimate objective 
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of acquiring technology for the production of such unavailable materiel;  
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(c) In order to reduce foreign exchange outflow, generate local employment 
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opportunities, and enhance technology transfer to the Philippines, the 
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Secretary of National Defense, hereinafter referred to as Secretary, shall, as 
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far as practicable, incorporate in each agreement involving the government 
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the manufacturing, servicing or operation of materiel special foreign 
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exchange reduction schemes and countertrade, in-country manufacture co- 
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production, or other innovative arrangements or combinations thereof.  
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SEC. 6. Incentives. –  
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(a) Any provision of law to the contrary notwithstanding, foreign and local 
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enterprises engaged or proposing to engage in the manufacture, servicing 
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and operation of materiel for the government may be registered and may avail 
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of the incentives under and subject to the conditions in the National Internal 
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Revenue Code of 1997, as amended: Provided, That the manufacture, 
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servicing, and operation of materiel for the government as an industry sector, 
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or its subsectors shall undergo the standard processes involved in the 
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identification of preferred activities under the Strategic Investments Priorities 
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Plan (SIPP) and shall be accompanied by a cost-benefit analysis showing the 
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need for incentives. 
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(b) Government financial institutions shall support the industry by formulating 
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and extending financial products that would hasten its development.  
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SEC. 7. Rationalization of Defense Acquisition. –  
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(a) Any provision of law to the contrary notwithstanding, the Secretary, in behalf 
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of the government, is hereby authorized to enter into contracts, under such 
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terms and conditions as may be agreed upon, with any natural or juridical 
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person, with or without public bidding, for the manufacture, servicing or 
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operation of materiel or components thereof, facilities, utilities and 
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appurtenances thereto necessary for national defense: Provided, That, in 
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the exercise of such authority, the Secretary shall comply with the reportorial 
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requirements under Section 13 of this Act.  
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(b) Any provision of law to the contrary notwithstanding, contracts for the 
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manufacture, procurement of services of local providers, servicing or 
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operation of materiel or components thereof, facilities, utilities and 
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appurtenances thereto which are necessary for national defense and which 
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are determined by the Secretary as not requiring public bidding, shall only 
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be awarded to in-country enterprises; Provided, That such materiel or 
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components thereof, facilities, utilities and appurtenances thereto can be 
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locally produced, manufactured or otherwise created.  
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(c) In the event that a public bidding is required by the Secretary, and the 
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manufacture, servicing, or operation of materiel or components thereof, 
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facilities, utilities and appurtenances thereto which are necessary for 
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national defense cannot be locally produced, manufactured, or otherwise 
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created, and whenever several bidders shall participate in the bidding, the 
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following principles shall be observed in the evaluation of the criteria on 
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price, when comparing foreign enterprises with in-country enterprises:  
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(1) In the event a public bidding utilizes the standard of lowest and 
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calculated and responsive bid, the bids of in-country enterprises 
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shall be considered as having a price less than that proposed by 
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foreign enterprises as long as such bids shall not be more than 
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fifteen percent (15%) in excess of the bid of such foreign enterprise; 
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and,  
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(2) In the event a public bidding utilizes the standard of highest rated 
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bid, the bids of in-country enterprises shall be considered as having 
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won the criteria of price as long as such bids shall not be more than 
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fifteen percent (15%) in excess of the bid of such foreign enterprise.  
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(d) In the event that public bidding is required by the Secretary, and the 
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manufacture, servicing or operation of materiel or components thereof, facilities, 
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utilities and appurtenances thereto which are necessary for national defense 
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cannot be locally produced, manufactured or otherwise created, and only foreign 
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enterprises participate, the Department shall have the ultimate objectives of 
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acquiring and transferring technology and knowledge, and generating local 
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expertise towards the eventual local production of such materiel or components 
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thereof.  
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(e)Nothing in this Act shall prohibit or restrict lawful government-to- government 
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transactions for the manufacture, servicing or operation of materiel or 
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components thereof, facilities, utilities and appurtenances thereto, which are 
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necessary for national defense. 
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(f) The Department, in consultation with representatives of in-country enterprises 
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shall issue reasonable regulations on the minimum local content for all defense-
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related acquisitions. The Department may consult with other government 
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agencies to determine such minimum local content. To support the economic 
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and employment generation thrusts of the country, all manpower needs of the 
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industry requiring the engagement or hiring of civilian labor shall be sourced 
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locally and, as far as practicable, be Filipino.  
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(g) Logistics support must be incorporated in all contracts on defense-related 
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acquisitions.  
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SEC. 8. Multi-Year Contracts and Other Contractual Arrangements.– For the 
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purpose of materiel acquisition, notwithstanding existing laws to the contrary, and 
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subject to Section 13 of this Act, the Department and its bureaus shall be authorized to 
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enter into multi-year contracts and other multi-year contractual arrangements: Provided, 
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That Congress shall, upon issuance of a multi-year obligation authority by the 
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Department of Budget and Management (DBM), make the corresponding appropriation 
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for the ensuing fiscal years: Provided further, That the Department shall, in consultation 
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with the DBM, issue implementing guidelines to ensure consistency with the Revised 
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AFP Modernization Program and this Act: Provided furthermore, That the Department 
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and its bureaus shall coordinate and conduct acquisition planning for the purpose of 
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implementing multi-year contractual arrangements and other multi- year obligations. 
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Provided finally, That the DBM shall expedite the issuance of multi- year obligation 
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authorities as necessary:  
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SEC. 9. Performance Undertakings. – The Department of Finance (DOF) is 
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authorized to recognize the obligations of the Department and its bureaus with respect 
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to acquired materiel as obligations of the Republic of the Philippines and to undertake 
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to pay the same in the event of non-payment by the Department and its bureaus.  
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SEC. 10. Countertrade.– Countertrade for defense-related acquisition shall be 
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significant, meaningful and must be of benefit to the Industry.  
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SEC. 11. Exemption from the SLCC requirement. – In-country enterprises 
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participating in the acquisition of materiel by the Department and its bureaus shall, upon 
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the effectivity of this Act, be exempt from the Single Largest Completed Contract 
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(SLCC) requirement as provided for under Sec. 23.5.1.3 of the revised rules and 
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regulations issued to implement Republic Act No. 9184, otherwise known as the 
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Government Procurement Reform Act. 
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SEC. 12. Creation of the Office of the Undersecretary for Defense 
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Technology Research and Industry Development. – There is hereby created in the 
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Department an Office of the Undersecretary for Defense Technology Research and 
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Industry Development. The Office shall be headed by an officer with the rank of 
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Undersecretary, assisted by an Assistant Secretary, and supported by at least three (3) 
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directors with the equivalent rank of Director IV. The Office will be charged with the 
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responsibility of managing and administering a databank for analysis, conducting 
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research and development and technology transfer, facilitating defense industry 
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promotion, establishing public-private partnerships, and setting up domestic and foreign 
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collaborations, and advising, recommending policies, rules and regulations to the 
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Secretary on all matters pertaining to the development of the Industry and the 
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implementation of this Act. Such Undersecretary, Assistant Secretary and Directors 
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shall be appointed by the President of the Philippines.  
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SEC. 13. Reporting and Oversight.– The Secretary shall, not later than the end 
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of the first quarter of the succeeding year, submit to the President and the Congress:  
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(a) An annual report on the acquisitions made under this Act; and, 
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(b)Copies of the multi-year contracts and other agreements entered into by the 
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Department and its bureaus.  
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Pursuant to its constitutional duties, the Executive Department, particularly the 
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National Economic and Development Authority (NEDA), the Commission on Audit, and 
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the Congress shall discharge oversight functions over the implementation of the 
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program in the following manner:  
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(1) The NEDA shall conduct an annual review of the status of all defense-
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related acquisitions exercised by the Secretary in Section 7 of this Act, 
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identify causes of delays, the reasons for bottlenecks, actual and 
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prospective cost overruns, determine the continued viability of the SRDP 
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and the industry, and submit its findings and recommendations to the Congress 
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not later than  June 30 of each year; 
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(2)The Commission on Audit shall conduct an audit on each ongoing and 
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completed acquisition and render a report to the Congress thereon not 
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later than June 30 each year; and, 
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(3)There shall be a Congressional Oversight Committee composed of the 
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Chairpersons of the Committee on National Defense and Security of both 
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Senate and House of Representatives who shall serve as Co-
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Chairpersons of the Oversight Committee, the Chairpersons of the 
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Committee on Ways and Means of both Senate and House of 
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Representatives who shall serve as Co-Vice-Chairpersons, four (4) 
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members each from the Senate and the House representing the majority 
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and two (2) members each from the Senate and the House representing 
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the minority to be designated by the leaders of the majority and minority 
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in their respective chambers.  
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SEC. 15. Cooperation of Government Agencies. – The DBM, DOF, BOI, 
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Government Procurement Policy Board (GPPB) and other government agencies are 
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enjoined to support the provisions of this Act. The Department and its bureaus, in 
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consultation with the DBM, AND THE GPPB, shall strengthen their systems and 
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procedures to support the objectives of the SDRP and the acquisition of materiel under 
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this Act.  
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SEC. 16. Appropriations. – The amount necessary for the effective 
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implementation of this Act shall be charged to the appropriations of the Department of 
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National Defense under the current General Appropriations Act. Thereafter, such sum 
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as may be necessary for its continued implementation shall be included in the annual 
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General Appropriations Act.  
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SEC. 17. Role of the GPPB. – The GPPB shall continue to fulfill its functions as 
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provided in Republic Act No. 9184, subject however to the provisions of this Act: 
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Provided, That in no case shall the GPPB interpret Republic Act No. 9184 or any 
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subsequent general law on procurement as overriding any of the provisions of this 
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specific law. The Secretary shall continue to serve as a member of the GPPB.  
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SEC. 18. Rule of Interpretation. – Rights and obligations existing on the date of 
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effectivity of this Act and arising out of contracts shall be governed by the original terms 
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and conditions of said contracts or the law in force at the time such rights were vested.  
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SEC. 19. Implementing Rules and Regulations; Supplementary Regulations.– 
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The Secretary shall issue the necessary rules and regulations and standard forms for 
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the effective implementation of this Act and issue supplemental regulations to facilitate 
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its implementation.  
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SEC. 20. Separability Clause. – If any provision of this Act shall be held 
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unconstitutional or invalid, the other provisions not otherwise affected shall remain in 
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full force and effect.  
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SEC. 21. Repealing Clause. – Sections 1 and 2 of Presidential Decree No. 415, 
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Authorizing The Secretary Of National Defense To Enter Into Defense Contracts To 
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Implement Projects Under The Self-Reliant Defense Programs And For Other 
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Purposes, as amended by Presidential Decree No. 1081 are hereby repealed. The 
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following laws, orders and regulations are hereby modified or supplemented, as the 
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case 
may 
be, 
in 
accordance 
with 
this 
Act: 
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(a) An exception to Government Procurement Policy Board Resolution No. 06- 2003 
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in relation to its amendment to Section 1 of Presidential Decree No. 415 shall be 
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observed 
with 
respect 
to 
provisions 
of 
this 
specific 
law; 
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(b) An exception to Republic Act No. 10667, otherwise known as the Philippine 
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Competition Law, in relation to its repeal of Section 4 of Commonwealth Act No. 
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138, entitled “An Act To Give Native Products And Domestic Entities The 
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Preference In The Purchase Of Articles For The Government” shall be observed 
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with respect to provisions of this specific law;  
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(c) An exception to Republic Act No. 9184 insofar as it covers procurement of 
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materiel shall be observed;  
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(d) An exception to Republic Act No. 1884 entitled, “An Act To Establish A 
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Government Arsenal, Provide For Its Operation And For Other Purposes”, insofar as 
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the exercise of the responsibility of the Office of the Undersecretary of Defense for 
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Munitions in research and development; and,  
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(e) Section 9 of Republic Act No. 7898 entitled, “An Act Providing For The 
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Modernization Of The Armed Forces Of The Philippines And For Other Purposes”, as 
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amended by Section 5 of Republic Act No. 10349 entitled, “An Act Amending Republic 
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Act No. 7898, Establishing the Revised AFP Modernization Program and for Other 
36 
Purposes” is hereby modified.  
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All other provisions of existing laws, orders, and regulations contrary to or 
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inconsistent with this Act are hereby repealed or modified accordingly.  
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SEC. 22. Effectivity. – This Act shall take effect after fifteen (15) days from its 
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publication in the Official Gazette or in a newspaper of national circulation.  
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Approved,  
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