1 
NINETEENTH CONGRESS 
) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) 
HOUSE OF REPRESENTATIVES 
Introduced by Representative Rufus B. Rodriguez 
House Bill No.  _____ 
EXPLANATORY NOTE 
The defense industry plays a key role in nation-building. It is therefore important that 
its development be prioritized in support of the goal of protecting national sovereignty. Hence 
this bill which aims to strengthen the Self-Reliant Defense Posture (SRDP) Program of the 
country. 
This bill also aims to strengthen the development of the national defense industry and 
attain self-reliance in defense materiel manufacturing and related services; aims to provide 
incentives for firms within the industry to locate and grow domestically; and aims to streamline 
government processes in support of strengthening the local defense industry. 
In view of the foregoing, immediate approval of this measure is earnestly requested. 
RUFUS B. RODRIGUEZ 
May 25, 2023
4:28 pm
8373


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NINETEENTH CONGRESS 
) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) 
HOUSE OF REPRESENTATIVES 
Introduced by Representative Rufus B. Rodriguez 
House Bill No.  _____ 
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-Reliant Defense Posture 
Program Act”. 
Sec. 2. Declaration of Policy. – It is hereby declared the policy of the State to promote and 
spur the growth of an independent national defense by establishing a self-reliant defense 
posture program that shall prioritize the development of the country’s national defense 
capabilities, including a competent domestic defense 
industry. 
In view thereof, the State shall endeavor to develop a National Defense Industry, 
hereinafter referred to as Industry, as an indispensable element of national defense. 
The State recognizes that: 
(a) The industry plays a vital role in nation-building in the achievement of the national
vision of an independent and self-reliant sovereign state, capable of providing its own
resources for defense, security, and national survival, specifically during war and other
national emergencies;
(b) The active participation of development of collaborative partnerships with the private
sector is an important strategy in the development of a viable, world-class defense
industry and that the grant of incentives for such participation can help ensure the
sector’s meaningful contribution thereto;
(c) The continued observance of the “Filipino First” policy in developing the Philippine’s
defense capability is consistent with the country’s national security aspirations; and,
(d) The Philippines has adequate human and other resources that can help ensure the
adequate 
supply 
of 
affordable, 
globally-competitive, 
high-quality 
defense
implements, equipment, 
machinery, systems 
and solutions, conduct defense
technology research, provide and develop defense-related technology, as well as
engineering and design education and training services that are necessary to the
development of the Industry.
(e) Science and technology, academic research and development institutions, and
technology transfer all play an important role in the development of 
effective
defense capabilities, the undertaking of successful defense missions, and the
achievement of peace and meaningful modernization.
Therefore, to foster the progressive growth of the industry and hasten defense
self-sufficiency, the government shall strengthen and revitalize the Self-Reliant
Defense Posture Program (SRDP), incentivize private sector participation in the
Industry, rationalize defense acquisition, and create the Office of the Undersecretary
for Defense Technology Research and Industry Development
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 government 
that helps ensure the proper and timely investment in technologies, programs 
and product support necessary for the purposes of the Philippine Armed Forces in 
promoting national defense and security. It shall include the acquisition of raw material, 
competent human resources, critical components and materiel; 
 
(b) Countertrade refers to international trade by exchange of goods rather than by 
currency purchase; 
 
(c) Critical components refer to components, systems, subsystems, and related 
special tooling and test equipment essential to the production, repair, maintenance, 
or operation of weapon systems or other items of equipment identified as being 
essential to the execution of any national defense and national security strategy; 
 
(d) Highest rated bid refers to the offer with the highest calculated rating based on the 
criteria and parameters not limited to capability, quality, timeliness of delivery, life 
cycle cost, after-sales support, transfer of technology, warranty, prerequisites and 
price; 
 
(e) In-country enterprise refers to a Filipino-owned enterprises engaged in the manufacturing, 
servicing and operation of materiel in the Philippines, or to a foreign-owned enterprise 
engaged in the manufacturing, servicing, and operation of materiel, and which has 
located a substantial portion of its production activities within the Philippines; 
 
(f) Integrated logistics support refers to an integrated and iterative process for developing 
materiel and a support strategy that optimizes functional support, leverages existing 
resources, and guides the system engineering process to quantify and lower life cycle 
cost and decrease the logistics footprint, making the system easier to support; 
 
(g) Materiel refers to military technology, materials and equipment, including arms and 
ammunition and combat clothing; 
 
(h) Minimum local content refers to the minimum percentage of intermediate goods used in 
the manufacturing processes to be sourced from in-country enterprises; 
 
(i) National defense refers to the policies, measures and initiatives intended to provide 
the necessary protection to the State against external and internal threats; 
 
(j) National security refers to a state or condition wherein the people’s welfare, well-
being, way of life; government and its institutions; territorial integrity; sovereignty; and 
core values are enhanced and protected; 
 
(k) Servicing refers to the process of maintaining, repairing or overhauling materiel; 
 
(l) Strategic Investments Priorities Plan (SSIP) refers to the government’s list of priority 
areas and preferred activities that shall be entitled to tax incentives under law. 
 
Sec. 4. Self-Reliant Defense Posture Program. – The Self-Reliant Defense Posture 
Program is hereby established and instituted as the tool of the State to undertake the 
development of a national defense industry. The underlying concept of self-reliance shall be 
manifested in the continued preference on local production when feasible, of materiel for the 
country’s defense forces through the partnership between the military and civilian 
establishments, and taking the recourse to importation only for those requirements that cannot 
be locally produced with the ultimate objective of acquiring the technology for the production 
of these materiel. Paramount to the attainment of this objective is the responsibility of the 
military and other government agencies to provide technical and financial assistance 
to 
civilian defense manufacturers. 
 
Sec. 5. National Defense Industry. – The National Defense Industry shall be developed in 
accordance with the following principles: 
 
(a) The foreign support for defense requirements shall be subject to this Act and the 


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policies approved by the President; 
 
(b) To develop the defense capability of the country, the State shall: 
 
I. 
Rely primarily on and give preference to In-country enterprises, allocate 
substantial resources and manpower to defense research, and provide 
relevant technical and financial assistance to the private sector; 
 
II. 
Utilize to the fullest the country’s natural resources as the source of the country’s 
defense 
needs, 
and 
rely 
on 
materiel 
readily 
available, produced, 
manufactured or otherwise created locally; and 
 
III. 
Use materiel from foreign sources only when such materiel cannot be locally 
produced, manufactured or otherwise created: Provided, That, importation 
from such foreign sources shall be for the ultimate objective of acquiring 
technology for the production of such unavailable materiel; 
 
(c) In order to reduce foreign exchange outflow, generate local employment 
opportunities, and enhance technology transfer to the Philippines, the Secretary 
of National Defense, hereinafter referred to as Secretary, shall, as far as practicable, 
incorporate in each agreement involving the government the manufacturing, servicing 
or 
operation 
of 
materiel 
special 
foreign exchange reduction schemes and 
countertrade, in-country manufacture co-production, or other innovative arrangements 
or combinations thereof. 
 
Sec. 6. Incentives.– 
 
(a) Any provision of law to the contrary notwithstanding, foreign and local enterprises 
engaged or proposing to engage in the manufacture, servicing and operation of 
materiel for the government may be registered and may avail of the incentives under 
and subject to the conditions in the National Internal Revenue Code of 1997, as 
amended: Provided, That the manufacture, servicing, and operation of materiel for the 
government as an industry sector, or its subsectors shall undergo the standard 
processes involved in the identification of preferred activities under the Strategic 
Investments Priorities Plan (SIPP) and shall be accompanied by a cost-benefit analysis 
showing the need for incentives. 
 
In the interest of national security, the Board of Investments (BOI) shall adopt 
a special procedure in the processing of applications for registration of enterprises that 
desire to participate in the Industry and offer goods or services to the government 
under the SRDP. 
 
(b) Government financial institutions shall support the industry by formulating and 
extending financial products that would hasten its development. 
 
Sec. 7. Rationalization of Defense Acquisition.– 
(a) Any provision of law to the contrary notwithstanding, the Secretary, in behalf of 
the government, is hereby authorized to enter into contracts, under such terms and 
conditions as may be agreed upon, with any natural or juridical person, with or without 
public bidding, for the manufacture, servicing or operation of materiel or components 
thereof, facilities, utilities and appurtenances thereto necessary for national defense: 
Provided, That, in the exercise of such authority, the Secretary shall comply with 
the reportorial requirements under Section 13 of this Act. 
 
(b) Any provision of law to the contrary notwithstanding, contracts for the manufacture, 
procurement of services of local providers, servicing or operation of materiel or 
components thereof, facilities, utilities and  
appurtenances thereto which are 
necessary for national defense and which are determined by the Secretary as not 
requiring public bidding, shall only be awarded to in-country enterprises; Provided, 
That such materiel or components thereof, facilities, utilities and appurtenances 
thereto can be locally produced, manufactured or otherwise created. 
 
(c) In the event that a public bidding is required by the Secretary, and the manufacture, 


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servicing, or operation of materiel or components thereof, facilities, utilities and 
appurtenances thereto which are necessary for national defense cannot be locally 
produced, manufactured, or otherwise created, and whenever several bidders shall 
participate in the bidding, the following principles shall be observed in the evaluation 
of the criteria on price, when comparing foreign enterprises with in-country enterprises: 
 
i. 
In the event a public bidding utilizes the standard of lowest and calculated 
and responsive bid, the bids of in-country enterprises shall be considered as 
having a price less than that proposed by foreign enterprises as long as such 
bids shall not be more than fifteen percent (15%) in excess of the bid of such 
foreign enterprise; and 
 
ii. 
In the event a public bidding utilizes the standard of highest rated bid, the bids 
of in-country enterprises shall be considered as having won the criteria of price 
as long as such bids shall not be more than fifteen percent (15%) in excess of 
the bid of such foreign enterprise. 
 
(d) In the event that public bidding is required by the Secretary, and the manufacture, 
servicing or operation of materiel or components thereof, facilities, utilities and 
appurtenances thereto which are necessary for national defense cannot be locally 
produced, manufactured or otherwise created, and only foreign enterprises participate, 
the Department shall have the ultimate objectives of acquiring and transferring 
technology and knowledge, and generating local expertise towards the eventual 
local production of such materiel or components thereof. 
 
(e) Nothing in this Act shall prohibit or restrict lawful government-to-government 
transactions for the manufacture, servicing or operation of materiel or components 
thereof, facilities, utilities and appurtenances thereto, which are necessary for 
national defense. 
 
(f) The Department, in 
consultation 
with representatives  of in-country enterprises 
shall issue reasonable regulations on the minimum local content for all defense-related 
acquisitions. The Department may consult with other government agencies to 
determine such minimum local content. 
 
(g) To support the economic and employment generation thrusts of the country, all 
manpower needs of the industry requiring the engagement or hiring of civilian labor 
shall be sourced locally and, as far as practicable, be Filipino. 
 
(h) Logistics support must be incorporated in all contracts on defense-related acquisitions. 
 
Sec. 8. Multi-Year Contracts and Other Contractual Arrangements.– For the purpose of 
materiel acquisition, notwithstanding existing laws to the contrary, and subject to Section 13 
of this Act, the Department and its bureaus shall be authorized to enter into multi-year 
contracts and other multi-year contractual arrangements: Provided, That Congress shall, 
upon issuance of a multi-year obligation authority by the Department 
of 
Budget 
and 
Management (DBM), make the corresponding appropriation for the ensuing fiscal years: 
Provided further, That the Department shall, in consultation with the DBM, issue implementing 
guidelines to ensure consistency with the Revised AFP Modernization Program and this Act: 
Provided furthermore, That the Department and its bureaus shall coordinate and conduct 
acquisition planning for the purpose of implementing multi-year contractual arrangements 
and other multi-year obligations. Provided finally, That the DBM shall expedite the issuance of 
multi-year obligation authorities as necessary: 
 
Sec. 9. Performance Undertakings. – The Department of Finance (DOF) is authorized to 
recognize the obligations of the Department and its bureaus with respect to acquired materiel as 
obligations of the Republic of the Philippines and to undertake to pay the same in the event of 
non-payment by the Department and its bureaus. 
 
Sec. 10. Countertrade. – Countertrade for defense-related acquisition shall be significant, 
meaningful and must be of benefit to the Industry. 
 


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Sec. 11. Exemption from the SLCC requirement. – In-country enterprises participating in 
the acquisition of materiel by the Department and its bureaus shall, upon the effectivity of this 
Act, be exempt from the Single Largest Completed Contract (SLCC) requirement as provided 
for under Sec. 23.5.1.3 of the revised rules and regulations issued to implement Republic 
Act No. 9184, otherwise known as the Government Procurement Reform Act. 
 
Sec. 12. Creation of the Office of the Undersecretary for Defense Technology Research and 
Industry Development. – There is hereby created in the Department an Office of 
the 
Undersecretary for Defense Technology Research and Industry Development. The 
Office shall be headed by an officer with the rank of Undersecretary, assisted by an Assistant 
Secretary, and supported by at least three (3) directors with the equivalent rank of Director 
IV. The Office will be charged with the responsibility of managing and administering a databank 
for analysis, conducting research and development and technology transfer, facilitating 
defense industry promotion, establishing public-private partnerships, and setting up 
domestic and foreign collaborations, and advising, recommending policies, rules and 
regulations to the Secretary on all matters pertaining to the development of the Industry and 
the implementation of this Act. Such Undersecretary, Assistant Secretary and Directors shall 
be appointed by the President of the Philippines. 
 
Sec. 13. Reporting and Oversight. – The Secretary shall, not later than the end of the first 
quarter of the succeeding year, submit to the President and the Congress: 
 
(a) An annual report on the acquisitions made under this Act; and 
 
(b) Copies of the multi-year contracts and other agreements entered into by the 
Department and its bureaus. 
 
Pursuant to its constitutional duties, the Executive Department, particularly the 
National Economic and Development Authority (NEDA), the Commission on Audit, and 
the Congress shall discharge oversight functions over the implementation of the 
program in the following manner: 
i. 
The NEDA shall conduct an annual review of the status of all defense-related 
acquisitions exercised by the Secretary in Section 7 of this Act, identify 
causes of delays, the reasons for bottlenecks, actual and prospective cost 
overruns, determine the continued viability of the SRDP and the industry, and 
submit its findings and recommendations to the Congress not later than June 30 
of each year; 
ii. 
The Commission on Audit shall conduct an audit on each ongoing and 
completed acquisition and render a report to the Congress thereon not later than 
June 30 each year; and 
iii. 
There shall be a Congressional Oversight Committee composed of the 
Chairpersons of the Committee on National Defense and Security of both 
Senate and House of Representatives who shall serve as Co-Chairpersons of 
the Oversight Committee, the Chairpersons of the Committee on Ways and 
Means of both Senate and House of Representatives who shall serve as Co-
Vice-Chairpersons, four (4) members each from the Senate and the House 
representing the majority and two (2) members each from the Senate and 
the House representing the minority to be designated by the leaders of the 
majority and minority in their respective chambers. 
 
Sec. 14. Promotion and Marketing Support. – The government shall promote the export of 
locally-made materiel and the in-country enterprises to other countries, and shall provide 
financial and marketing support for the purpose of such promotion. 
 
Sec. 15. Cooperation of Government Agencies .– The DBM, DOF, BOI, Government 
Procurement Policy Board (GPPB) and other government agencies are enjoined to support 
the provisions of this Act. The Department and its bureaus, in consultation with the DBM, 
AND THE GPPB, shall strengthen their systems and procedures to support the objectives 
of the SDRP and the acquisition of materiel under this Act. 
 
Sec. 16. Appropriations. – The amount necessary for the effective implementation of this Act 
shall be charged to the appropriations of the Department of National Defense under the 
current General Appropriations Act. Thereafter, such sum as may be necessary for its 


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continued implementation shall be included in the Annual General Appropriations Act.  
 
Sec. 17. Role of the GPPB. – The GPPB shall continue to fulfill its functions as provided in 
Republic Act No. 9184, subject however to the provisions of this Act: Provided, That in no 
case shall the GPPB interpret Republic Act No. 9184 or any subsequent general law on 
procurement as overriding any of the provisions of this specific law. The Secretary shall 
continue to serve as a member of the GPPB. 
 
Sec. 18. Rule of Interpretation. – Rights and obligations existing on the date of effectivity of this 
Act and arising out of contracts shall be governed by the original terms and conditions of 
said contracts or the law in force at the time such rights were vested. 
 
Sec. 19. Implementing Rules and Regulations; Supplementary Regulations. – The Secretary 
shall issue the necessary rules and regulations and standard forms for the effective 
implementation of this Act and issue supplemental regulations to facilitate its implementation. 
 
Sec. 20. Separability Clause. – If any provision of this Act shall be held unconstitutional 
or invalid, the other provisions not otherwise affected shall remain in full force and effect. 
 
Sec. 21. Repealing Clause. – Sections 1 and 2 of Presidential Decree No. 415, Authorizing 
The Secretary Of National Defense To Enter Into Defense Contracts To Implement Projects 
Under The Self-Reliant Defense Programs And For Other Purposes, as amended by 
Presidential Decree No. 1081 are hereby repealed. The following laws, orders and 
regulations are hereby modified or supplemented, as the case may be, in accordance with 
this Act: 
 
(a) An exception to Government Procurement Policy Board Resolution No. 06-2003 in 
relation to its amendment to Section 1 of Presidential Decree No. 415 shall be 
observed with respect to provisions of this specific law; 
 
(b) An exception to Republic Act No. 10667, otherwise known as the Philippine 
Competition Law, in relation to its repeal of Section 4 of Commonwealth Act No. 138, 
entitled “An Act To Give Native Products And Domestic Entities The Preference In 
The Purchase Of Articles For The Government” shall be observed with respect 
to provisions of this specific law; 
 
(c) An exception to Republic Act No. 9184 insofar as it covers procurement of materiel 
shall be observed; 
 
(d) An exception to Republic Act No. 1884 entitled, “An Act To Establish A 
Government Arsenal, Provide For Its Operation And For Other Purposes”, insofar 
as the exercise of the responsibility of the Office 
of the Undersecretary of 
Defense for Munitions in Research and Development; and 
 
(e) Section 9 of Republic Act No. 7898 entitled, “An Act Providing For The 
Modernization Of The Armed Forces Of The Philippines And For Other 
Purposes”, as amended by Section 5 of Republic Act No. 10349 entitled, “An Act 
Amending 
Republic 
Act 
No. 
7898, 
Establishing 
the 
Revised 
AFP 
Modernization Program and for Other Purposes” is hereby modified. 
 
 
All other provisions of existing laws, orders, and regulations contrary to or 
inconsistent with this Act are hereby repealed or modified accordingly. 
 
Sec. 22. Effectivity. – This Act shall take effect after fifteen (15) days from its publication in 
the Official Gazette or in a newspaper of national circulation. 
 
Approved,