ic of the Philippines
HOUSE OF REPRESENTATIVES
| | Quezon City

Fifleenth Ci

ess

Second Regular Session

|
im al
| commrrree report No, 2277

24 JUL 2012
Submitted by the Committee on National Defense and Security on _

Re: House BiNo. | 6410 — TO

Recommending its approval in substitution of House Bill Nos. 4949, 76, 2112, House Resolution Nos, 3,
93, 578 and 333 |
Sponsor: Representative Rodolfo G. Biazon
|

|
Mr. Speaker | | |

| |
| |

The Committee gn National Defense and Security te which were raferred House Bill No. 4949
introduced by Rep. Rodallo G. Binzon, enti

REPUBLIC ACT NO. 7898, OF HERWIS KNOWN AS
ATION ACT, AND FOR OTHER PURPOSES”;

i
“AN ACT AMENDING
THE AFP MODERN

House Bill No.76 introduced by Re
R. Ortega ill, t

Albert S. Gare

Mel Senen S. Sarmiento, Francisco Emmanuel

poldo N. Bataoil and Imelda G. Calixto-Rubiano, entitled:

“AN ACT PROVIDING FOR THE MODERNI
ARSENAL AND APPROPRIATING FUNDS TH

PON OF THE GOVERNMENT
oR"; |
House Bill No. 2112 introduced by Reps. Rufus B. Rodr
Feodoro and Imelda G. Calixto-Rubiano. entitled
|
“AN ACT AUTHORIZING THE ARMED FORCES OF THE PHILIPPINES TO
LEASE OUT SOME OF ITS PROPERTIES TO RAISE FUNDS FOR ITS
MODERNIZATION”;

z, Maximo B. Rodriguez, Jr., Marcelino 8.



House Resolution No. 3 introduced by Reps. Rodolfo G. Biazon,
Lagman, entitled: |

eptali M. Gonzales II and Edcel C

“RESOLUTION DIRECTING THE COMMITTEE
AND SECURITY TO CONDUCT AN INQUIRY, IN AID OF LEGISLATIO.
THE IMPLEMENTATION OF THE ARMED FORCES OF THE PHILIPPINES
MODERNIZATION PROGRAM, WITH FOCUS ON ITS OBJECTIVES,
PRIORITIZATION IN EQUIPMENT ACQUISITION, | AND FUNDING
REQUIREMENTS AND SOURCES, IN RELATION TO )PHE COUNTRY'S
PRESENT NEEDS

ON NATIONAL DEFE!

House Resolution No. 93 introduced by Reps. Rufus B. Rodriguez and| Maximo B, Rodriguez, Jr..
entitled:

28 TO

“A RESOLUTIDN URGING THE ARMED FORCES OF THI PHULAPPIN!
Q TO THE

RAISE FUNDS BY LEASING OUT SOME OF ITS PROPE!
PRIVATE SECTOR”;

House Resolution No. 33 introduced by Reps. Rufus B. Rodr

M. Gonzales Il and Eded) C.

wucz, Maximo B. Rodi
wiman, entitled: |

Jn. Neptali

“RESOLUTION DIRECTING THE COMMITT
AND SECURITY TO CONDUCT AN INQUIRY, IN AID GF LEGISLATION,
INTO THE LEGALITY AND FEASIBILITY OF THE PROPOSED TIE-UP OF
THE ARMED FORCES OF THE PHILIPPINES WITH OLL COMPANIES OFF
PALAWAN” |

ON NATIONAL DE

and House Resolutior ns 578 introduced by Reps. Rodolfo G. Biazon, Nepftali_ M. Gonza

Edeel C. Layman, entitled:

“RESOLUTION DIRECTING THE COMMIT ON NATIONAL DEFENSE,
AND SECURITY TO CONDUCT AN INQUIRY, IN ALD OF LEGISLATION, ON
TH ATUS |OF| THE SECURITY ARRANGEMENTS PROVIDED BY THE
ARMED FORCES OF THE PHILIPPLNES WITH COMPANIES CONDUCTING
EXPLORATIONS AND EXTRACTIONS OF OIL, GAS AND OTHER ENERGY
RESOURCES IN ONSHORE AND OFFSHORE AREAS FOR THE PURPOSE OF
DETERMINING [TS SUFFICIENCY, ADEQUACY AND FUNDING SUPPORT
AND SOURCES TO MEET CONTINGENCIES AND THREATS TO THE
LATTER'S FACILITIES”



hhas considered the same and recommends that the attached House Bill No. |

aa
“AN ACT AMENDING REPUBLIC ACT NO. 7898, OTHER|
THE AFP MOE ERNIZATION ACT, AND FOR OTHER PURE

be approved in substitution pf House Bill Nos. 4949, 76, 2112, House Re:
$78 with Reps, Rodolfo) G. Biazon, Albert S. Garcia, Mel Senen S. Sarr
Maximo B. Rodriguez, }r., Neptali M. Gonzal
Ill, Leopoldo N, Bataoil} Imblda G. Cali
Zubiri Ill, Rodolfo B. A hal

Michael Angelo C. Riveta,
Mandanas, Eduardo R. Gullas, “Ma. Milagros H. Magsaysay, Danilo B.
Mare Douglas C. Cagas a louie T. Gunigundo I, George P. Amnaiz,

¢ II, Edcel C. Lagman, Fral

Anthony Rolando T. Golez, Jr. as authors thereof.

{vis oj

Rubiano, Marcelino R. Teodoro, Tupay T. Loong, Jose F.
jo, Ga a es na 1. Sahidul
rzid} P. Aggabao. Hermilando 1

6410

, entitled:

KNOWN AS

0!

lolution Nos, 3, 93, 333 and
ineto, Rufus B. Rodriguez.
neisco Emmanuel R, Ortega

a, Carlos M. Padilla,

Suarez, Tobias M. Tiangco.
| Fernando V. Gonzalez and

Defense and Security

|
j Respectfully submitted,
| | |
; |
1 |
i
i HON. RODOLFO G. BIAZON
| Chairman
| | Committee on National
i }
|
THE HONORABL PEA JER |
HOUSE OF REPRESENTATIVES ;
QUEZON CITY |
} | i
ne!
|
| |
i |
| | |
|
i 4 |
|
| |
|



i

Introduced by Re
B. Rodriguez, Mi
Francisco. Emma
Marcelino R. Teo.

R, Quisumbing, Nur Ana I. Sahidulla, Carlos M. Padilla, Michael Angdlo C. Rive

Yap. Reena Cone
Gullas, Ma. Milagt
Cagas {V, Magtal

Anthony Rolando

I

AMENDING RI

MODERNIZATION ACT, AND FOR OTHE!

Repubiic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon Ci

FIFTEENTH CONGRESS |

Third Regular Session

6410

House Bill No.

fs. Hodoifo G. Biazon, Albert S, Garcia; Mel Senen §. Sarmineto, Rufus
ximo B. Rodriguez, Jr., Neptali M. Gonzales ees C. Lagman,

lel (R. Ortega Ill, Leopoldo N. Bataoil, Imelda 43. Calixto-Rubiano,
Joro,| Tupay T. Loong, Jose F. Zubiri Ill, Rodolfo B. Albano, Gabriel Luis

pcign Obillo, Giorgidi P. Aggabao, Hermilando 1, Mandanas,
ros Hl. Magsaysay, Danilo E. Suarez, Tobias M. Tiangto, Mare Douglas C.
gzat T. Gunigundo 1, George P. Arnaiz, Fema V. Gonzalez and
1. Gblez Jr

er
i

AN ACT |

i NO. 7898, OTHERWISE KNOWN AS THE AFP

PURPOSE: i

PUBLIC

Be it enacted by the Senate and House of Represematives of the Philippines in

Congress assemble

SECTION
known as the AF

“SEC.4.C

i
XXX
(b) Capa

| |

id.
JONI. Section 4 (b), (d) and (e) of Republic Act No. 7898, otherwise
Modernization Act, is hereby amended to read as follows:

D AFP Modernization Progiam. ~

\
i

bnncliene of the REVISI
i

ili

 materifajE!, and technology development = ‘The AFP

[m]Mogernization {p}Program entails the development and eniployment of certain
capabilities that can address the assessed threats: Provided, THat the acquisition of

air force, navy and arm:

be mad|
modern]
and wel
and abj

equipment and materiel of such types and quantities shall
in hecordance with the need to develop AFP eh es pursuant to its

ization objectives: Provided, further, That the acquifition of equipment
pon systems shall be synchronized with the phase-dut of uneconomical
major equipment and weapons systems in the AFP inventory

Provided, even further, That no major equipment shall be purchased if the same

are not

bbeing used by the armed forces in the country of origin or used by the

i

| i
i |
i i
i \
|
|
j


| 7
| |

armed forces of at least two countries: Provided, furthermore, That only offers
from suppliers who are themselves the manufacturers shall be entertained:
Provided, finally, That no supply contract. shall be enterdd into unless such

Geran

>

contrac} pre
the avajlabi

¥ of spare parts.

xxx | |

(@) Human} resch

objectives:
|
()) xxx

@2)| Yo develop and transform the AFI
oriented force] MULTI-MISS
EFFECTIVELY ADDRESSING INTERNAL AND E.
THREATS;

|

t0 a [primari}

TE]

G)) ax
hl) |
4) | AKX
(5) | ax
O| >

(e) Doctr
securit

purpose of formalizing such
Departmen{ of National Defense and the |
shall Ke responsible for the gene

Nn, evaluation, cons

of dogtrings through field application, testing and exerci
dissemination of approved doctrines at all levels of command,

The Secretary of Nationa
implement this section i
modernization program enumerated in the preceding section."

Sec, 2. Section 6 of the same Act is hereby amended to read as follows:

“Se¢. 6-Period of Implementation. - The REVISED AEP

period of fifteeh (15) years EFFECTIVE UPON THE DAT!
APPROVAL QF THIS ACT: Prov
amortization of} outstan

[m|Modernization {p}Program under this Act shall be rai a over a

led, however, That pi

ides for, in clear and unambiguous terms, an after-sales services and

esdturce development — The human resource develomemt component of
the REVISED AFP [m|Modemization [p[Program shall have the following

y external securi
ION ORIENTED HORCE CAPABLE OF
RNAL SECURITY

ines Hevelopment. — [The transition of the AEP fron} an internal
‘oriented force to an external security-oriented force requires the
Feview) evaluation and validation of its present set of docttines for the
rines, Towards this end, {| The
neral headquarters,| AFP
idation and
formaljzation of doctrines; the conduct of periodic review aild validation
and the

Defense shall formulate guidelines
accordance with the objectives of the

E OF THE
lyments for
ig multi-year contract obligations inclirred under


5
2
8
4
se
a
7
g
“

this period

[this] THE REVISED AFP MODERNIZATION Act may exfend beyond
i i
|

See. 3. Sectibn 7 bf the same Act is hereby amended to read as follqws:

“Seb. 7.| Submission of the REVISED AFP Moder»

|
sation Prograin, ~

(a) Within |ningty (90)] SIXTY (60) days from the effectivity of this Act, the
President. pon) the recommendation of the Secretaries of Natignal Defense
and Budget bnd Management, shell submit the REVISED AFP
[m|Modertiization [p]Program as provided for in this Act to Congress. [for its
consideration and approval in a joint resolution of thel House of

alia:

Representatives) and the Senate.] The [p]Program shall indicate | show inter

Sebriceradietraneatieseomal ext and
fies during the various phases of the modernization " gram:

(2) The| modernization projects under it, including the major pare and

nonfiwedpon equipment and technology acquisitions solight by the
resflective services and units of the AFP, any major ihfrastructure
construction or improvement to be made and the particular objective(s)
and|comiponent(s) under Sections 3 and 4, respectively, of this Act to
whith $uch intended acquisition, construction or irhprovements
belangs;jand |

|
|

(3) The| prigrities. schedules as well as estimated average dost of each

(b)

modernization project or upgrading to be undertaken|,) : PROVIDED,
HAT THE IMPLEMENTATION OF THE PROGRAM SHALL
DEVOTED. TOWARDS THE DEVELOPMENT OF THE
AFP WITH TE HE CAPABILITY TO ME!
INTERNAL AND ERNAL SE ITY THREATS.

|
[In| thé event’ “Congress approves’ |The REVIS

ED AFP

{mModernization [p}Program. AS SUBMITTED TO CONGRESS [the
joint etn Sal be the basis for subsequent executive anfi legislative

actions to mpl

ment the AFP [m|Modemization [p|Program from year to

year until ifs comptete and full realization.”

}

Sec. 4. Section § of the same Act is hereby amended to read as follows

“Se

Appropriations for the REVISED AFP Modernization

Program The anntial appropriations for the REVISED AFP
[nJModernizatibn {p)Program shall include the amounts necessally to support

the fundi
under the preceding secti

-equirements for all modernization projects approved by Congress
ie i

{ |

‘The| funlls to be appropriated by Congress under this Act shall be

treated as a distinct and separate budget item from the regular appropriation
for the Department of National Defense (DND) and the AFP and shall be

administered by!the

retary of National Defense.



SSwtes eG «ear

2:

[The proposed program shal! be based ona ceiling, for U inst five (S)
years, of Fifty billion pesos (P50,000.000,000.00): Provided, that thereafter,
mount may be inereased commensurate to the increase jp the Grose
National Produdt (GNP).
|

“THE REVISED AFP MODERNIZ
BE BASE) ON AN AMOUNT OF SEV
(P75,000,000,000.00) FOR THE F T FIVE (5) YEAR:
THAT THE RELEA OF THE AMOUNT SH.

THE CAPACI ILIZE AND IMP}
REVISED| AFP MODERNIZATION PROGRAM IN AC
wi iE DEFENSE SYSTEM OF MANAGEMENT.”

ATION PROGR.

TENT THE
RDANCE

Sec. 5. Section 9 (b) and (¢) of the same Act are

‘by amended to read as follows:

“SEC. 9. Multi-year Contracts and Other Contractual Arrangements «

XXX | | |
(b) For multi-ygar contracts, Congress shall, upon {the tion by the President]
ISSUANCE OF A MULTI-YEAR OBLIGATIONAL AUTHORITY BY THE

DEPARTMENT OF BUDGET EMENT (DBM), ma
Corresponding appropriation for the ensuing fiscal yearS: Provided, That [Congress
shall appropriate only such fu may be nec
where such|funds mentioned in Section 11 of this Act or available to
Meet such paynjent in full or in part) M SHALL ISSUE,

IMP -NTING GUIDELINE: RE CONS WITH
REVISED AFP MODERN \G
NES IN THE CONTRAC
(c) The Sterethry of National Defense shall submit to Coifgress, through. the
{chairmen]/ CHAIRPERSONS of th
Security ahd Finance and the [c nn] CHAIRPERSO!
Committees on} National Defense AND SECURITY and Apprapri
these multifyear contracts and other agreements/arrangements tolenable Congress to
appropriate} funds.”

See. 6. Section | of the same Act is hereby atnended to read as follows:

“See. 11. THE REVISED AFP Modernization Act Trust Fund.
‘There is hereby created a trust fund, to be known as the REVISED AFP
Modernization |Act Trust Fund. Said trust fund, which shall be used
exclusively) for the AFP modernization program INCLUDING ALL
NEI RY [EXPENSES TO 1 T THE PROCUREMENT
OF EQUIPMENT SUCH AS EX! "OR PRE-SELECTION AND
QUALIFICATION $1 but not to include Salaries and
allowances} shall be funded out of the follow:

(a) Appropiatins for the REVISED AFP {mjModernization [p]Program;
|
|} |

ke the

sary 0 pay hiny unpaid amount

nitiees on National Defense and
of the House
ions, copies of


(b) The pyoceeds from the sale|, lease or joint development}! of military

reservations. as may be authori

PRO’
Gov

including

not

Authority, as provided for in Republic A.

ed by Congress, PURSUANT TO THE

NISIONS OF EXISTING LAWS AND REGULATIONS

RRNING SALES OF GOVERNMENT PROPERTIES,

other facilities as may be fund therein

covered by the Bases Conversion Development
0. 7227, AS AMENDED;

THER WIS

|
(©) THE PROCEEDS FROM THE LEASR OR JOINT

DEV
AUT
PRO’

GOVERNING

ELOPMENT OF MILITARY RESERVATIONS,
HORIZED BY THE PRESIDENT, PURSUA\
ISIONS OF EXISTING LAWS AND REGULATIONS
LEASE OR JOINT VELOPMENT OF

GOVERNMENT —— PROPERTIES, — INCLUDING) SUCH
IMMOVABLES AND OTHER FACILITIES AS MAY BE FOUND

THE

REPUBLIC ACT NO. 7227, AS AMENDED;

lo
provi
LE

REIN, NOT SPECIFICALLY ENUMERATED UNDER

pes of the AEP from the proceeds of the sal
‘died for under Republic Act No. 7227, AS AME
‘T RIFTY PERCENT (50%) OF THE PROCE

litary camps

DIRECT EXPE AUTHORIZE) DEDUC »
SUCH PROC FROM THE LEASE AND/OR JOINT
VEN = AGREEMENTS AND SUCH OTHER DISPOSITIONS
PER ix) IN ACCORDANCE

RESERVATIONS OR PORTIONS THEREOF OR FACH
AND] IMMOVABLE:
COVERED UNDER Ri
IBIECT TO TH

ARP
OTL

(E) TE PROCE

ORDERS, RULI

|
DyD OR THE AFP MAY ASSIGN TO THE BASES
ERSION AND DEVELOPMENT AUTHORITY OR
IGNATE IL AS DISPOSITION ENTITY FOR THE SALE
SE | OR JOINT DEVELOPMENT OF MILITAR
i
LOCATED THEREIN NOT OTHERWISE
BLIC ACT NO, 7227, AS AMENDED,
= PARAMETERS SET BY THE DND OR THE
AND) APPLICABLE LAWS. RULES, REGULATIONS AND.
Hace 1D ISSUANC |

SDS DERIVED FROM PUBLIC-PRIVATE

PARTNERSHIPS ENTERED INTO BY THE DND OR THE AFP,

AS MAY BE AUTHORIZED BY TE

TO
REG

(id) (FY

E PRESIDENT, PURSUANT
STING LAWS AND

|THE PROVISIONS OF
iLar ONS:

INC ON IES. E ARN D EROM THE FOt ITY si
Gov ERNMENT ARSENAL FROM THE JOINT VENTURE
| |



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y
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6
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10
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a
B

if

&
Ie
th
i
4

so
2)

22
AB
24
pes
ei

27

28
29

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7
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33
3
35
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37
38
39
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41
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#3

[(e)1 (G) The proceeds from the disposal of excess and/or undconomically
Fepaitable equipment and other movable assets of the AFP and the
government arsenal:

j
[] (BD Funds from budgetary surplus. if as may be alanoneed by
onghess subject to the provisions of Section 8 of this Act; [and}

SOURCES, SPECIFICALLY EARMARKED TO BE USED FOR

() DONATIONS COMING FROM LOCAL AND he

ISED AFP MODERNIZATION PROGRAM

“

W) REASONABLE AMOUNT FROM THE SHARE OF THE
NAIFIONAL GOVERNM. ALAMPAYA OIL AND
GAS EXPLORATION AND SUCH OTHER SIMILAR OR
RELATED EXPLORATIONS FOR ENERGY, AS MAY BE
ar ROVED BY THE PRESIDENT; AND

((g)) (K) [All inuerest income of the trust fund, |
|

FOREGOING SOURCES,

[The trust fund] FUNDS FROM THi
REGARDLESS OF INCOME St
IAL ACCO!
SIFICALLY FOR
MODERNIZATION PROGRAM.
ALLOTMENT ASH ALLOCATION
TO THE, i

D AEP MODERNIZATION TRUST
ry of Natignal Defense
F ING AND auditing
DND SHALL CONDUCT P
PME UTIL

and regulations. TH!
ON HOW TO MAXIML
FUND AND HOW ADDI
TO FUND, THE REVE

Sec. 7. Seetion 12 ofthe same Act is hereby amended to read as {pllows

“Sec. 12. | Modernization of the Government Arsenal, — The modernization
of the ent arsenal, for the development of production capabilities to
enhance spif-sifficieney in defense requirements, shall be jpart of the
REVISED AFP [m|Modernization [p]Program. The government/arsenal shall
be effectively ytilized in the production of basic weapons, aminunition and
other munitions for the use of the AFP, [and] the Philippine National Police
(PNP) AND OTHER UNIFORMED GOVERNMENT AG INCIES, and
for the sald andjexport of products in excess of [AFP/PNP] THE feniifemente
OF THE|AFP. PNP AND OTHER UNIFORM GOVERNMENT
AGENCIES. The government arsenal may use such production faciliti
may own dr be|provided with under th
fotluction or similar
NT SITE OF

is with focal and for
ERNMENT ARS

jen entiti
AL, AS



|
DEFINED BY PRESIDENTIAL PROCLAMATION NUMBER 361-A
DATED 7 MARCH 1968, AS AMENDED, IS HEREBY DECLARED A.
DEFENSE INDUSTRIAL ECONOMIC ZONE WITH ave TMENTS,
THEREAT ENTITLED TO SUCH TAX PRIVILEGES AND OTHER
APPROPRIATE INCENTIVES THAT ARE ALLOWED UNDER
REPUBLIC ACT NO. 7916, AS AMENDED, AND OTHER EXISTING
Laws.” | |

wo TOGA,

See. 8. Section |I4 of the same Act is hereby deleted and in liew thereof, a new Section
14 shall be inserted to tead as follows

10 1Sec. 14. | AFP Procurement System, ~ The DND-AFP shall strengthen its
nl systeins aid procedures for equipment acquisition, taking into account new

ry requirements under the AFP mederization program, Contact| negotiations
B and equipmentacquisition shall be treated as two sequential /but separate
WH steps, each requiring the separate decision of the etary| of National
15 Defense, The decision making process. acquisition shall start at

(6 the appropfiateservice comma
1 Board, wifile fonimet

AFP Weapons Systems
general heacguarers AFP

ig level, In ith system and procedures for equipment acquisition, the provisions
9 of Presidestial Decree No. 1594, as amended, and other applicalhle laws shall
20 apply.|

ei] MODERNIZATION PLANNING AND PROCUREMENT.

ota ® REMISED AFP MODERNIZATION PROGRAM PLANNING
23 AND PROCUREMENT SHALL BE CONDUCTED IN ACCORDANCE,
wy WITH Tite | DEFENSE SYSTEM OF MANAGEMENT (DSOM)
ety WHICH IS DEFINED AS A STRATEC , CAPABILITY-
26 BASED MULTI-YEAR PLANNING AND EXECUTION PROC IN

aT THIS REGARD, STRATEGIC PLANNING, — CAPABILITY

2g ASSESSMENT AND PLANNING, ACQUISITION ILANNING,
29 AND CONTRACTING, AND RESOURCE:
GO PLANNING |AND FINANCIAL MANAGEMENT SHALL BE
Bl TREATE ey AN INTEGRATED AND WHOLISTIC PROCESS.

T OF THE

UPON PRIOR APPROVAL BY THE PRESIDI

33 PHILIPPINES,

34 AEP INVOLVE!

BS WITH THE DE 3

36 EQUIPMENT OR MATERIAL REQUIRED IS NOT AVAILABLE.

ey LOCALLY AND THE SECRETARY OF >

ATIONAL DEKENSE HAS

3s DETERMINED THAT THE INTERESTS OF THE COUNTRY SHALL.
39 BE PROTECTED BY NEGOTIATING DIRECTLY | WITH A
go MANUFAICT ee KR OR AN INSTRUMENTALITY OF |ANOTHER
4r COUNTRY WITH WHICH THE PHILIPPINES HAS ENTERED INTO.
Hod A DEFENSE} COOP! ATION AGREEMENT OR OTHERWISE
43 MAINTAL iS biecoms TIC RELATIONS, THE PROCUREMENT BY
4 THE AFH OF

THE EQUIPMENT ABOVEMENTIONED SHALL I
45 EXEMPTED FROM THE REQUIREMENT OF PUBLIC BIDDING
te UNDER REPUBLIC ACT NO. 9184: PROVIDED, HOWEVER, THAT



THE PERFORMANCE BY THE SUPPLIER OF ITS OBLIGATIONS

!
-) UNDER THE PROCUREMENT CONTRACT SHALL BE COVERED
3 BY A PERFORMANCE SECURITY IN ACCORDANCE WITH
4 SECTION 39 OF REPUBLIC ACY NO. 9184; PROVIDED, FIN.
St THAT MAJOR DEFENSE QUIPMENT SHALL
6 AIRCRA’ VESSELS, ‘ANKS, ARMORED
bal COMMUNICATION EQUIPMENT, RADAR SYSTE A
g Bee FIREARMS. |
q NOTWITHSTANDING THE PROVISIONS OF THE Sl
/o ONLY DULY) AUTHORIZED REPRESENTATIVES OF SERVIC
Il PROVIDERS, MANUFACTURERS OR INSTRUMENTALITIE
pe OTHER COUNTRIES SHALL BE ALLOWED TO PARTICIPATE IN
B ANY ACTIVIT INVOLVING THE — REVISED AFP
H MODERNIZATION PROGRAM, INCLUDING BUT NO} LIMIT
ib TO SUPPLIES, REPAIR AND REHABILITATION OF MAJOR AND
Io MINOR EQUIPMENT. * |
{7 Sec. 9. Secticn 16 of the Same Act is hereby amended to read as follows:
gz Sec. 1§. [Annual] Reports. ~ [Not later than the end of the first
19 quarter of the succeeding year] |
Pr (a) NOT T THAN THE END OF THE FIRST QUARTER OF
ey THE SUCCEEDING YEAR, [T]the Secretary of Natignal Defense
ad shall submit to the President and Congress an annual eit on the
23 statlis df the REVISED AFP Modemization Act Trust Fund, as
oy provided for in Section 11 of this Act |
25 (b) The Chief of Staff, AFP, shall submit to the President and Cor
Ib thrdush| the Secretary of National Defense. din ai
a7 QUARTERLY report containing the progress of the implementation
of Of {he modernization program under this Act to include the AFP
24 modernization ies implemented prior to the approval of this
Bo Act, }
JI Sec. 10. Insert} sections after Section 16 of the same Att which shall now
32 become the new 17, 18 and 19 respectively, which shall read as;
33 17. YEMPTION FROM VALUE~ |DDED
ay CUSTOMS DUTIE. LE OF WEAPONS, FEQUIPME!
ua AMMUNITIONS TO AFP, WHICH ARE DIRECTLY AND
se LUSIVELY USED FOR ITS PROJE AKING
37 ACTIVITIES AND PROGRAMS UNDER: THE ) AEP
38 MODERNIZATION ACT, SHALL BE EXEMPT FROM THE VALUE
34 ADDED TAX! PROVIDED, THAT THE IMPORTATION OF THE
40 SAME BY THE AFP SHALL LIKEWISE BE EXEMPT FROM THE
)

4/ VALUE-ADDED TAX AND CUSTOMS DUTH


BRSSMMig HeLa

a

COMMITIE:

_ \g, CONGRESSIONAL 0! ERSIGHT
THERE 1b HEREBY CREATED & con JONAL OVERSIGHT
to. MONITOR OVERSEE 7
YMPLEMI VION OF THE PROVISIONS OF THIS jact. THE
COMMITTER SHALL BE COMPOSED OF SIX (6) MEMBERS FROM
THE SENATE AND SIX (6) MEMB S FROM THE HOUSE oF
REPRE! Lee IVES WITH THE CH AIRPER ONS | OF THE
COMME WTEES ON NATIONAL. DEFENSE A “Dp SECURITY OF
BOTH HOUSES AS JOINT CHAIRPE RSONS. THE TFIVE.6) OTHER
MEMBERS FROM g eR ALL BE DESIGNATED BY
THE SENAT ENT AN FP THE HOUSE OF
REPRESENTATIVES, RESPECT Fe . THE MINORITY SHALL
HAVE AT LEAST E ESENTATIVES FROM BOTH
CHAMBERS.. |
\ |
SEC. 19.
WITHIN | FIVE
CONGRESSIONAL OVE
REVIEW OF e i
SHALL | SYSTEMATIC EVALU ATION
ACCOMPLISHMENTS A? THis ACT, AS WELL
THE PERFORMANCE JONAL STRUCTURE OF
1 urea TING FOR STRYDSES OF
DETERM {INING REMEDIAL LE . |
See, 11. MI pections of the $2 Act are hereby amended and renumbered
accordingly | |
|

\ , ‘ \ ,
ec. 12, Repealing Clause, — All laws executive orders, ryles and copulation’
inconsistent with! or Eontrary to this Act, are hereby deemed accardingly repealed of
amended, \ | |

any section or provision of this Act

for any reas
ot affected thereby

ity Clause. ~ VE.

Sec. 13. Sdparabil
is declared unconstitutional oF invalid.
Shall remain in full forge and effect

or provisio

ier sect

een (15) days ater its

shall take effect after
nal circulation. i

This A\
apers of

See. 14. Elfectivity Clause
publication in at east wo 2) ENS?



| 4 FACT SHEET

6410 |

i HOUSE BILL NO.

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(In substitution of HB Nos. 4949, 76, 2112, HR Nos. 3, 93, 578 and 333, as approved by

j the Committee) i

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AN ACT AMENDING REPUBLIC ACT NO. 7898, OTHERWISE KNOWN AS THE AFP
MODERNIZATION ACT, AND FOR OTHER PURPOSES

Introduced by: Reps.|. Rodolfo G. Biazon, Albert S. Garcia, Mel Senen S. Sarmineto,
Rufus B, Rodriguez, Maximo 8. Rodriguez, Jr, Neptali M. Gdnzales II, Edcel C.
Lagman, Francisco Emmanuel R. Ortega Ili, Leopoldo N. Batagil, Imelda G. Calixto-
Rubiano, Marcelino R. Teodoro, Tupay T. Loong, Jose F. Zubinijll, Rodolfo B. Albano,
Gabriel Luis R. Quisumbing, Nur Ana |. Sahidulla, Carlos M. Padilla, Michael Angelo C.
Rivera, Susan Yap,| Reena Concepcion Obillo, Giorgidi P. Aggabao, Hermilando |.
Mandanas, Eduardo R, Gullas, Ma. Milagros H. Magsaysay, Danilo E. Suarez, Tobias
M. Tiangco, Marc Douglas C. Cagas IV, Magtanggol T. Gunigundo |, George P. Amaiz,
Fernantio V. Gonzalez and Anthony Rolando T. Gplez, ur.

Committee Referral: Committee on National Defense and Security
Committee Chairperson: Hon, Rodolfo G. Biazon (Primary)

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OBJECTIVES: |

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* To make the provisions of RA 7898 more responsive to a continuously changing
international and regional security environment.

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KEY PROVISIONS: |
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* Provides for the revision of the AFP Modernization Rrogram that shall be
substantially focused and directed towards addressing the internal and external
security thréats|to the country and develop the AFP towards an organization with
a shifting capability to meet internal and external security threats
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* Provides for a tevised AFP Modernization Program to be implemented over the
next 15 yeals. | |

* Mandates the |submission to Congress of the revised AFP Modernization
Program within 60 days from approval ofthis Act. |

+ Mandates that the Revised AFP Modemization Program Planning and
Procurement shall be conducted in accordance with the Defense System of
Management (DSOM) which is a strategy-driven, capability-based multi-year
planning and execution process


* Mandates hen [proceeds from lease and joint venture agreements of military
camps shall, acorue to the AFP Modernization Program Trist Fund

* Provides a awe billion budget for the first five (5) yeats of the Revised AFP
Modernization Program provided that the release of the amount shall be subject
to the rel of the Department of National Defense (DND) to utilize and
implement the said program in accordance with the DSOM

5 fees a reasonable amount of the National Government share in the
Melee VA oil and gas exploration and such other similar(or related explorations

for eneray shalllikewise accrue to the AFP Modernization [Trust Fund, as may be
approved by the President \

Declares the plesent site of the Government Arsenal as a defense industrial
economic zone.

+ €xempts certain major defense purchases, such as aircraft, vessels, tanks,
armored vehiclas, communications equipment and high ppwered firearms, from
the requirement of public bidding |

*° Exempts idm value-added tax and customs duties the sale and importation of
weapons, equipment and ammunitions to the AFP which are directly and
exclusively used for its projects, undertakings, activities He programs under this
Act |

RELATED LAWS:| | |

«RA 7898, otherwise known as the AFP Modernization Act |

* RA7227, a amended otherwise known as the Bases Conversion and
Development Act

« RA9184, otherwise known as the Government Procuremeht Reform Act

© PD 361-A creating the Government Arsenal

« RA7042 otherwise known as the Foreign Investments Act of 1991