Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Sixteenth Congress
Second Regular Session

house BILL No, 911 2

Introduced by Honorable Eleandro Jesus F. Madrona

EXPLANATORY NOTE

This bill 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 is 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 escuers 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 concems 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.

I

ELEANDRO JESUS F, MADRONA



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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Sixteenth Congress
Second Regular Session

HousE BILL No. 5112

Introduced by Honorable Eleandro Jesus 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:

a. Maritime safety

b. Maritime search and rescue

c. Maritime security

d. Maritime law enforcement

e Marine environmental protection

SEC. 3. Philippine Coast Guard Modernization Program. — Within a

period not exceeding fifteen (15) years after the effectivity of this Act, the


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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;

c. 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


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specialization.
Ci 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:

B. 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 hostlile situations;

My 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

o 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 until 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


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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 Modernization 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


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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

g)  Allinterest income of the trust fund.

SEC. 10. Equipment Acquisition Per Functional Area. — \n 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.


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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.

s 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,