] HOUSE REPRESENTATIVES
| RECEIVED
| pate:_-G5JUL 2016

Republic of the Philippines; oTive:

HOUSE OF REPRESENTATIVES | By:

Quezon City, Metro Manila | -
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SEVENTEENTH CONGRESS | REGISTRATION UNIT

First Regular Session | BILLS AND INDEX SERVICE

HOUSE BILL NO. 1199

Introduced by Reps. Cesar V. Sarmiento and Emmanuel F. Madrona

EXPLANATORY NOTE

This bill, filed by the veteran lawmaker, Eleandro Jesus F. Madrona, under
the 16" Congress, seeks to modernize the Philippine Coast Guard (PCG), creating
for the purpose the PCG Modernization Trust Fund and appropriating funds therefor.

Under Republic Act (RA) No, 9993, also known as the “Philippine Coast
Guard Law of 2009,” the PCG is tasked primarily to enforce applicable laws within
Philippine waters, conduct maritime security operations, safeguard life and property
at sea, and protect the marine environment and resources.

The PCG jis attached to the Department of Transportation and
Communications. Currently, it maintains a presence throughout the archipelago with
twelve coast guard (CG) districts, fifty-four CG stations and over one hundred ninety
CG detachments from Basco, Batanes to Bongao, Tawi-Tawi

Unfortunately, the capability of PCG, compared to coast guards of our
neighboring ASEAN countries, is below par. The current stand-off in Panatag
(Scarborough) Shoal with China highlights the country’s need to modernize its
capabilities to guard its 36,000 kilometers coastlines. Aside from maintaining
presence within our territorial waters, it is equally important for the country to be able
to protect its fishing industry and people traversing the internal waters of the
Philippines.

Admiringly, despite its inadequate capabilities, the PCG has continued to
perform its mandates with intensity and enthusiasm, The dedication and
commitment of PCG personnel as rescuers and law-enforcers could be further
enhanced if technologically improved material capabilities are introduced and
integrated into the coast guard organization and systems

With twelve CG districts, sixty-three CG stations and two hundred thirty eight
CG detachments, the PCG continues to discharge its functions with limited
resources,

In order to address the concerns of PCG, there is a need for a modernization
plan that would enhance its capabilities to guard effectively the entire Philippine
archipelago, its territorial waters and coastlines. The modernization program will


allow the PCG to perform its functions effectively and efficiently.
In view of the foregoing, the immediate passage of the bill is earnestly sought
<&E -
s i x)

CCESAR V. SARMIENTO Emm. F. MADRONA


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SEVENTEENTH CONGRESS
First Regular Session

1185

HOUSE BILL NO.

Introduced by Reps. Cesar V. Sarmiento and Emmanuel F. Madrona

AN ACT MODERNIZING THE PHILIPPINE COAST GUARD, CREATING FOR THE
PURPOSE THE PHILIPPINE COAST GUARD MODERNIZATION TRUST FUND
AND APPROPRIATING FUNDS THEREFOR

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 Coast
Guard Modernization Act."

SEC. 2. Declaration of Policy. ~ It is hereby declared the policy of the State
to modernize the Philippine Coast Guard to a level where it can fully perform its
mandates. Toward this end, the State shall develop and enhance the capabilities of
the Philippine Coast Guard in order to effectively and efficiently perform under the
following functional areas

Maritime safety

Maritime search and rescue
Maritime security

Maritime law enforcement
Marine environmental protection

e290

SEC. 3. Philippine Coast Guard Modernization Program. ~ Within a period
not exceeding fifteen (15) years after the effectivity of this Act, the Philippine Coast
Guard shall implement the PCG Modernization Program, hereinafter referred to as
the Program, The Philippine Coast Guard shall continue to perform its powers and
discharge its functions as provided in Section 3 of Republic Act No. 9993, also
known as the “Philippine Coast Guard Law of 2009."

Payments for the amortization of outstanding multi-year contract obligations
incurred under Section 7 of this Act may however extend beyond this period

SEC. 4. Objectives of the Program. - The Program shall be implemented in
accordance with the following objectives:


a To minimize, if not totally eliminate, accidents at sea;

b. To reduce the search effort and hasten response time during search
and rescue operations;

©. To contribute substantially in securing maritime zones or territorial
waters from terrorism, lawlessness, and other threats to national security and
territory;

d To effectively contribute in the enforcement of the Philippine criminal
and other special laws within the maritime zones or territorial waters; and

e. To minimize, if not totally eliminate, pollution in the maritime zones or
areas and hasten response time to recover spilt pollutants.

SEC, 5. Components of the Program. — The Program shall have the
following components:

a. Organization Development, The restructuring and streamlining of PCG
units and offices for economy and efficiency to avoid the overlapping of functions
simplify procedures and improve response time

b, Human Resources, The professionalization of its human resource with
educated, motivated and highly-skilled personnel in their respective fields of
specialization

¢. Doctrine Development. The rationalization of systems, standards and
procedures in the administration of PCG which includes the generation, evaluation,
consolidation and formalization of doctrines, the conduct of periodic review and
validation of doctrines through field application, testing and exercises; and the
dissemination of approved doctrines at all levels of command

d. Infrastructure Development. The basic and support systems required
to ensure that services are rendered efficiently which includes acquisition and
upgrade of basic and support facilities for administrative and operational services
and the acquisition and upgrade of basic facilities such as aircraft command, control
and communication platform which are range and endurance-capable to
continuously monitor edges of the exclusive economic zone (EEZ) with night
navigation capability, including remote-controlled drones.

e. Equipment and Facilities Acquisition and Modernization, The
acquisition and upgrade of contemporary, modern and state-of-the-art equipment
and system to enhance the capabilities of the PCG in the performance of its
mandate which includes the following

1 Upgrade of vessels to mission-specific level with a high degree
of flexibility to perform other functional area operations. The vessels must be
well-maintained for full operational status at least three hundred (300) days a


year and must be interfaced with latest cutting edge technology for ease of
operation;

2. Remotely operated submersibles for deep-sea search, retrieval
and monitoring operations;

3 Weapons which are marine-environment resistant and designed
primarily to disable hostile personnel and equipment;

4 K-9 Units which are capable of detecting bombs, drugs, toxic
substances and search and rescue (SAR) operations, among others

5 Uninterruptible PCG internal communications seamlessly
interoperable with other agencies as well as communications with commercial
vessels operating within the Philippine maritime zones or territorial waters;

6. Training equipment capable of simulating foreseeable
emergency or hostlle situations;

% Aids to navigation which are consistent with International
Association of Lighthouse Authorities standards:

8. Accurate and real time monitoring and detection systems; and

9 Laboratories with technologically current equipment

SEC. 6. Submission of the Program. — Within ninety (90) days from the
effectivity of this Act, the PCG Commandant shall, in coordination with the
Secretaries of Transportation and Communications and Budget and Management,
submit the PCG Modernization Program through the Congressional Oversight
Committee created under Section 14 hereof for its consideration and approval
through a joint resolution of the House of Representatives and the Senate

‘The Program shall indicate the following:

a The size and shape of the PCG in terms of personnel, equipment, and
facilities during the various phases of the Program;

b The modernization project under each phase including the major
weapon and non-weapon equipment and technology acquisitions, infrastructure
construction or improvement to be made and the particular objective(s) and
component(s) under sections 4 and 5 respectively, of this Act to which such intended
acquisition, construction or improvements belongs; and

c The priorities, schedules as well as estimated average cost for each
modernization component project or upgrading to be undertaken,

In the event Congress approves the PCG Modernization Program, the joint
resolution shall be the basis for subsequent executive and legislative actions to
implement the Program unti its completion and full realization.


SEC. 7. Multi-year Contracts. - The Secretary of Transportation and
Communications may, pursuant to the Program, projects and appropriations
approved by Congress and subject to the approval by the President, enter into multi-
year contracts and other agreements or arrangements in accordance with the
provisions of existing laws and regulations including those of the Commission on
Audit and under such terms and conditions most favorable to the government.

The Congress shall, upon certification by the President, make the
corresponding appropriation for the ensuing fiscal year in payment for multi-year
contracts; Provided, That Congress shall appropriate only such funds as may be
necessary to pay any unpaid amount when the appropriated funds mentioned in
Section 13 of this Act are not sufficient or available to meet the payment, in full or in
part

The Secretary of Transportation and Communications shall submit to
Congress, through the Congressional Oversight Committee, copies of these multi-
year contracts and other agreements or arrangements to enable Congress to
appropriate funds.

SEC. 8. Self- Reliance Program. ~ In implementing the Program, the PCG
shall, as far as practicable, give preference to Filipino contractors and suppliers and
secondly to foreign contractors or suppliers, willing and able to locate a substantial
portion of, if not the entire, production process of the terms involved within the
Philippines.

In order to reduce foreign exchange outflow, generate local employment
opportunities and enhance technology transfer to the Philippines, the Secretary of
Transportation and Communications shall, as far as feasible, incorporate in each
contract or agreement special foreign exchange reduction schemes such as
countertrade, in-country manufacture, co-production, or other innovative
arrangements or combinations thereof.

The PCG shall likewise ensure that in negotiating all applicable contracts or
agreements, provisions are incorporated respecting the transfer to the PCG of the
principal technology involved as well as the training of PCG personnel to operate
and maintain such equipment and technology.

SEC. 9. PCG Modernization Trust Fund. - There is hereby created a trust
fund, to be known as the PCG Modernization Trust Fund to be administered by the
Secretary of Transportation and Communications in accordance with existing rules
and regulations. The trust fund shall be used exclusively for the PCG Modernization
Program excluding salaries and allowances. The trust fund shall be funded out of
the following

a) Appropriation for the PCG Modemization Program;
b) The proceeds from the sale, lease or joint development of coast guard

properties and lighthouse reservations, as may be authorized by the Congress,
including such immovable and other facilities as may be found therein, not covered


by the Bases Conversion Development Authority, as provided for in Republic Act No.
7227, otherwise known as the Bases Conversion and Development Act of 1992,

c) Shares of the PCG from the proceeds of the sale of coast guard
properties provided for under the Bases Conversion and Development Act of 1992;

d) The proceeds from the disposal of excess or uneconomically repairable
equipment and other movable properties in the PCG arsenal;

e) Funds from budgetary surplus, if any, as may be authorized by
Congress subject to the provisions of Section 13 of this Act,

f) Dues, fines, and penalties collected by PCG in the exercise of its
functions; and

9) _Allinterest income of the trust fund.

SEC. 10, Equipment Acquisition Per Functional Area. ~ In order to further
specialize PCG capabilities, equipment acquisition shall be initiated within the
respective functional areas as mentioned in Section 2 of this Act but integrated into
the Program to allow inter-operability and ensure greater degree of reliability

SEC. 11, Contract Negotiation. - The procurement process shall be
governed in accordance with Republic Act No. 9184, otherwise known as the
"Government Procurement Reform Act,” and its revised implementing rules and
regulations. The procurement process shall be exercised by the PCG General
Headquarters unless delegated to the next lower level management by the PCG
Commandant

SEC. 12, Use of Savings Annual Reports. - The Secretary of
Transportation and Communications shall submit to the President and Congress
through the Congressional Oversight Committee, an annual report on the status of
the PCG Modernization Act Trust Fund, as provided for in Section 9 of this Act not
later than the end of the first quarter of the succeeding year.

The Commandant of the PCG shall also submit to the President and
Congress, through the Congressional Oversight Committee and the Secretary of
Transportation and Communications, an annual status report containing the process
of the implementation of the modernization program under this Act including the
PCG modernization activities implemented prior to the approval of this Act not later
than the end of the first quarter of the succeeding year.

SEC. 13. Appropriations. - The annual appropriations for the PCG
modernization program shall include the amounts necessary to support the funding
requirements for all modernization projects approved by Congress pursuant to this
Act

The funds to be appropriated by the Congress shall be treated as a distinct and
separate budget item from the regular appropriation for the PCG and shall be
administered by the Secretary of Transportation and Communications. The


proposed program shall be based on a ceiling of Fifty billion pesos
(P50,000,000,000.00) for the first five (5) years. Thereafter, this amount may be
increased commensurate to the increase in the gross national product (GNP)

SEC. 14, Joint Congressional Oversight Committee. — A Joint
Congressional Oversight Committee is hereby created to monitor and oversee the
implementation of the provisions of this Act. The Joint Congressional Oversight
Committee shall be composed of six (6) Senators and six (6) Representatives to be
appointed by the Senate President and the Speaker of the House of
Representatives, respectively. It shall be co-chaired by the Chairperson of the
Committee on Transportation of both Houses. The minority parties of both Houses
shall have at least two (2) representatives in the Joint Congressional Oversight
Committee.

SEC. 15. Sunset Review. - Five (5) years after the effectivity of this Act, the
Joint Congressional Oversight Committee shall conduct a systematic evalutation of
the accomplishments and impact of this Act as well as the performance and
organizational structures of PCG.

SEC. 16. Separability Clause. - If any provision of this Act is declared
unconstitutional or invalid, the remainder of this Act or any provisions not affected
thereby shall remain in full force and effect.

SEC, 17. Repealing Clause. — All laws, executive orders, rules and
regulations inconsistent with or contrary to this Act, are hereby repealed or amended
accordingly.

SEC. 18. Effectivity. — This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation

Approved,