NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session
)
of tl)C
23 SEP 27 P5:20
RtCEIVEO BV,
SENATE
S. B. No. 2455
__________ (In Substitution of Senate Bill Nos. 315, 505, 682 and 2046)__________
Prepared and submitted jointly by the Committees on National Defense and Security, 
Peace, Unification and Reconciliation joint with the Committees on Ways and Means 
and Finance with Senators Zubiri, RevHia, Jr., Ejercito Estrada, Marcos, Gatchaiian, 
Villanueva and Legarda as authors thereof
AN ACT
REVITALIZING AND STRENGTHENING THE SELF-RELIANT DEFENSE 
POSTURE PROGRAM AND PROMOTING THE DEVELOPMENT OF A NATIONAL 
DEFENSE INDUSTRY PURSUANT THERETO AND PROVIDING FUNDS 
THEREFOR
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
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Section 1. Short Title. — This Act shall be known as the "Self-Reliant Defense
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Posture Revitalization Act".
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Sec. 2. Declaration of Policy. — It shall be the policy of the State to serve and
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protect its people and sovereignty at all times. The State also recognizes the important
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role of a self-reliant defense posture in national defense. Thus, it is imperative to
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revitalize the country's self-reliance defense posture program and to fully harness the
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potential of the defense industry at a time where security threats are imminent and
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continue to evolve.
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Towards this end, the State shall undertake to develop the defense industry
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and its capability to locally produce advanced weaponry and equipment for its armed
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forces through technology transfer, partnerships with and incentivizing the private
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sector.
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Sec. 3. Definition of Terms. - As used in this Act:


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(a) Acquisition refers to the process of procuring technologies, programs, and
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product support that are necessary for national defense and security, in order
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to support the armed forces of the country. It shall include the acquisition of
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raw material, critical components, and materiel;
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(b) Criticai Components refer to components, subsystems, systems, and related
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special tooling and test equipment essential to the production, repair,
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maintenance, operation of weapon systems or other items of equipment
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identified as being essential to the execution of any national defense and
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national security strategy;
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(c) Defense materiei refers to military technology, weapon systems, arms,
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ammunition, combat clothing, armor, vehicles, and other similar military
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equipment and materials;
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(d) Highest Rated Bid refers to the offer with the highest calculated rating based
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on criteria which shall include but not limited to capability, quality, timeliness
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of delivery, life cycle cost, after-sales support, transfer of technology, warranty,
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perquisites and price;
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(e) In-country Enterprises refer to either Filipino-owned or foreign-owned
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enterprises engaged in manufacturing, servicing, and operation of materiel in
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the Philippines. For foreign-owned enterprises, 
a substantial portion of their
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production must be located within the Philippines;
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(f) Integrated Logistics Support refers to an integrated and iterative process for
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developing materiel and support strategy that optimizes functional support,
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leverages existing resources, and guides the system engineering process to
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quantify and lower life cycle cost and decrease logistics footprint, making the
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system easier to support;
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(g) Minimum Locai Content refers to the minimum percentage of intermediate
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goods used in the manufacturing processes to be sourced from in-country
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enterprises;
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(h) Operating refers to the process of functioning or operating of materiel or
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facilities, utilities and appurtenances thereto which are necessary for the
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manufacturing, servicing or operating of the materiel or its components;


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(i) Plan refers to the Investment Priorities Plan as provided in Executive Order No.
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226 or the "Omnibus Investment Code of 1987," as amended;
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(j) Servicing refers to the process of maintaining, repairing or overhauling materiel.
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Sec. 4. Creation of the Office of the Undersecretary for Defense Technology
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Research and Industry Development - The Office of the Undersecretary for Defense
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Technology Research and Industry Development shall be created within the
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Department of National Defense (DND). It shall be headed by an officer with the rank
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of Undersecretary, assisted by an Assistant Secretary, both to be appointed by the
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President of the Philippines.
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Sec. 5. Powers and Functions of the Office of the Undersecretary for Defense
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Technology Research and Industry Development - The Office sha 11 have the fol lowi ng
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powers and functions:
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(a) Manage and administer a databank for analysis;
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(b) Conduct research and development;
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(c) Facilitate technology transfer;
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(d) Promote the defense industry;
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(e) Establish public-private partnerships;
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(f) Set-up domestic and foreign collaborations; and
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(g) Recommend and advise the Secretary on policies, rules, and regulations for
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the development of the National Defense Industry and the implementation
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of this Act.
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SEC. 6. Self-Reliant Defense Posture (SRDP) Program. — The DND, through the
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Office of the Undersecretary for Defense Technology Research and Industry
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Development, shall formulate and implement the SRDP program to revitalize the
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defense industry and address the short, medium, and long-term needs for defense
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materiel. The following shall be the guiding principles in formulating the program:
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(a) It shall be designed to be advantageous to in-country enterprises, generate
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and prioritize local employment, and contribute to foreign currency
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exchange savings;
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(b)It shall incentivize manufacturers to establish or relocate production or
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assembly of materiel in the Philippines while ensuring the protection of local
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manufacturers and assemblers against unfair competition;


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(c) It shall promote technology transfer;
(d) It shall endeavor to secure the country's sufficient access to resilient supply 
chains of materiel or critical components that are vital to national security;
(e) It shall drive proactive research and development efforts and the adoption 
of innovative technologies to enhance the existing inventory of equipment 
and weapons systems;
(f) It shall promote active participation of local innovative councils, invention 
societies, universities, and other higher learning institutions in advancing 
science-based industrialization and provide research grants and 
development subsidies to program participants;
(g) It shall complement the Philippine Development Plan, and align with the 
National Security Policy and Republic Act No. 10349 or the "Revised AFP 
Modernization Program";
(h) It shall assess the current state of the country and define developmental 
goals to allow the private industry time to acquire the necessary expertise 
and technology for future government request for products;
(i) It shall align with the objectives of Republic Act No. 11293 or the "Philippine 
Innovation Act," particularly by fostering partnerships among various 
stakeholders 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;
(j) It shall enumerate a comprehensive range of defense materiel covered by 
the program, while specifying materiel to be produced by the Government 
or Government-owned and controlled corporations, those that will be co­
developed with private entities, and those that will be wholly outsourced to 
private industry;
(k) It shall identify specific areas where prospective local and foreign-owned in­
country enterprises can participate in; and
(l) It shall promote the export of locally-made materiel and the in-country 
enterprises to other countries.
SEC. 7. Formulation of Projects under the SRDP Program. —


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(a) If the materiel is one which the Government shall develop, produce,
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assemble, service, or operate by itself, the lead agency or lead government-
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owned and controlled entity that will implement the development and
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production plan shall collaborate with the Undersecretary in the formulation
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of aforesaid project; and
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(b) If the materiel is one which shall be developed, produced, assembled,
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serviced, or operated with private entities or one whose development,
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production, assembly, servicing, or operation will be wholly sourced out to
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the private sector, the Undersecretary shall publish in two newspapers of
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general circulation and on its website the criteria and qualifications for
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participants of the project, the details and mechanics of the SRDP project
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in question, and the terms and conditions for participation in the project:
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Provided, however, That the Undersecretary shall not publish details,
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specifications, and such other information that must be kept confidential by
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reason of national security.
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SEC. 8. Implementation of Projects under the SRDP. — All projects formulated
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shall be subject to the approval of the President.
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(a) For projects conducted solely by the Government, the lead agency or lead
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government-owned and controlled entity shall be primarily responsible for
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implementing and completing the project;
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(b) For projects conducted jointly by a government agency or entity and private
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enterprises, both shall be equally responsible for the implementation and
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completion of the same; and
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(c) For projects conducted solely by private entities, the implementation and
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completion of the same shall be the responsibility of said private entities.
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The Undersecretary shall exercise supervision and monitoring over the project
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in all instances.
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Sec. 9. Development of Technology and Systems to Counter Unconventional
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Threats. — The SRDP Program shall include materiel essential to and designed to
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effectively counter and address chemical, biological, radiological, nuclear, and cyber-
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attacks or incidents.


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The DND, AFP, and all other government agencies involved in responding to
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such attacks or incidents shall enhance the capacity and capabilities of its special units
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tasked with chemical, biological, radiological and nuclear emergency response and risk
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mitigation.
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SEC. 10. Intellectual Property Office Special Lane. —The Intellectual Property
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Office shall establish a special lane to handle applications for patents, industrial
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designs, copyrights, and similar applications involving sensitive military and defense
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technologies, inventions, processes, and softwares in order to fast-track the evaluation
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and approval process and to ensure that confidential information pertaining to such
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applications are properly safeguarded.
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SEC. 11. Incentives.—
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(a) Any provision of law to the contrary notwithstanding, foreign or local
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enterprises engaged or proposing to engage in the development, manufacture,
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assembly, servicing or operation of materiel for Government may be registered
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with the Board of Investments and may avail of the incentives under R.A. 11534
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or the "Corporate Recovery and Tax Incentives for Enterprises Act": Provided,
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That, such enterprises shall locate a substantial portion of its development
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process, manufacturing, assembly, or servicing in the country.
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The development, manufacture, assembly, servicing or operation of
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materiel shall be included in the Strategic Investment Priority Plan every year
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by operation of law after the effectivity of this Act until otherwise removed by
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the Board of Investments or the President: Provided, That the removal of
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manufacturing, servicing, or operation of materiel from the Plan subsequent to
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the effectivity of this Act shall not be interpreted as a bar or restriction on the
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Board of Investments from later including the manufacturing, servicing or
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operation of materiel in the Plan.
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In the interest of National Security, the Board of Investments shall adopt
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a special procedure in the processing of applications for registration by
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enterprises in the Industry and offering goods and services to the Government.
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(b) Government financial institutions are highly encouraged to support the Industry
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by formulating and extending financial products that would benefit its hastened
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development.


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(c) In addition to the incentives under existing laws, in-country enterprises
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engaged in the development, manufacture, assembly, servicing or operation of
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materiel registered with the Board of Investments shall enjoy exemption from
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customs duties and national internal revenue taxes payable on the importation
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of raw materials and critical components imported for the purpose of
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developing, manufacturing, assembling, servicing, or operating such materiel.
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Sec. 12. Rationalization of Defense Acquisition. - (a) Notwithstanding any
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contrary provision of law, the Secretary, on behalf of the Government, is hereby
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authorized to negotiate with other governments for the manufacture, servicing or
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operation of materiel or components thereof, facilities, utilities and appurtenances
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thereto which are necessary for national defense: Provided, That in the exercise of
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such authority, the Secretary shall comply with the reportorial requirements under
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Section 14 of this Act;
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(b) In-country enterprises participating in the acquisition of materiel by the
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DND and its bureaus shall be exempt from the Single Largest Completed Contract
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(SLCC) requirement;
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(c) In cases where the manufacture, servicing or operation of materiel or
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components thereof, facilities, utilities and appurtenances thereto essential to national
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defense cannot be made locally and several bidders participate in the public bidding,
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the bid submitted by foreign enterprises and in-country enterprises shall be evaluated
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based on the following criteria on price:
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(l)If the public bidding uses the standard of lowest calculated and
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responsive bid, bids of in-country enterprises shall be considered as
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having a price less than that proposed by foreign enterprises as long as
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such bids shall not be more than fifteen percent (15%) in excess of the
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bid of such foreign enterprise; and
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(2) If the public bidding uses the standard of highest rated bid, bids of in-
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country enterprises shall be considered as having met the criteria of price
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as long as its bid shall not be more than fifteen percent (15%) in excess
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of the bid of such foreign enterprise;
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(d) In cases where the manufacture, servicing or operation of materiel or
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components thereof, facilities, utilities, and appurtenances thereto essential to


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national defense cannot be made locally, and only foreign enterprises participate, the
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ultimate objective of the DND shall be technology transfer and the acquiring of
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knowledge for eventual local production;
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(e) In Section 12(c) and 12(d), the DND, in consultation with representatives
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of in-country enterprises and other government agencies, shall issue regulations on
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the minimum local content for all defense-related acquisitions; and
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(f) In Section 12(c) and 12(d), Integrated Logistics Support must be
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incorporated in all contracts concerning defense-related acquisitions.
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Sec. 13. Multi-Year Contracts. - For the purpose of acquisition of materiel,
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notwithstanding existing laws to the contrary, and subject to Section 12 of this Act,
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the DND and its bureaus shall be authorized to enter into multi-year contracts:
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Provided, That corresponding appropriation for the ensuing fiscal years shall be
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included in the annual General Appropriations Act (GAA) upon issuance of a multi-year
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obligation authority by the Department of Budget and Management (DBM): Provided,
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further, the DND, in consultation with DBM, shall issue implementing guidelines to
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ensure that contracts are consistent with the Revised AFP Modernization Program and
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this Act: Provided, finally, the DND and its bureaus shall coordinate and conduct
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acquisition planning for the implementation of multi-year contracts.
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Sec. 14. Reportoriai Requirement - The DND Secretary shall submit the
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following to the President and Congress at the end of the first quarter of the
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succeeding year from effectivity of this Act:
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(1) An annual report on the implementation of this Act;
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(2) Copies of the multi-year contracts and other agreements entered into by the
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DND and its bureaus; and
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(3) Status of local defense industry indicating therein information, such as, but
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not limited to, the total number of in-country enterprises, the total value and
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volume of materiel produced by in-country enterprises, and the total Filipinos
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employed by in-country enterprises.
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Sec. 15. Rule of Interpretation. - Rights and obligations arising from existing
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contracts as of the date of effectivity of this Act shall be governed by their original
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terms and conditions or the law in force at the time such rights were vested.


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This Act shall take precedence over Republic Act No. 9184 or the "Government
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Procurement Reform Act," or any subsequent general law on procurement regarding
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transactions subject to the requirement of public bidding. The DND Secretary shall
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continue to serve as a member of the Government Procurement Policy Board (GPPB).
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Sec. 16. Implementing Rules and Regulations - Within ninety (90) days from
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the effectivity of this Act, the DND shall formulate and promulgate rules and
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regulations necessary for the implementation of the law.
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Sec. 17. Appropriation. - An initial funding of One billion pesos
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(P1,000,000,000.00) shall be included in the annual appropriations of the DND for the
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purpose of implementing this Act. Subsequent funding shall be included in the annual
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General Appropriations Act.
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Sec. 18. Separability Clause. - If any provision of this Act is declared
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unconstitutional, the remainder thereof not otherwise affected shall remain in full force
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and effect.
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Sec. 19. Repealing Clause. - All laws, presidential decrees, executive orders,
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letters of instruction, and administrative regulations that are inconsistent with the
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provisions of this Act are hereby repealed, amended, or modified accordingly.
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Sec. 20. Effectivity. - This Act shall take effect after fifteen (15) days following
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the completion of its publication in the Official Gazette, or in a newspaper of general
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circulation.
Approved,