NINETEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
SENATE 
S. No.
of tl)? &H’cr?larB
*22 JUL18 A 9 ‘42
RlXEtVED BV,
Introduced by Senator Jinggoy Ejercito Estrada
AN ACT
PROVIDING FOR THE DEVELOPMENT OF A NATIONAL DEFENSE INDUSTRY 
THROUGH THE STRENGTHENING AND REVITALIZING OF THE SELF 
RELIANT DEFENSE POSTURE (SRDP) PROGRAM, INCENTIVIZING IN 
COUNTRY ENTERPRISES, RATIONALIZING DEFENSE ACQUISITION, AND 
CREATING THE OFFICE OF THE UNDERSECRETARY FOR DEFENSE 
TECHNOLOGY RESEARCH AND INDUSTRY DEVELOPMENT UNDER THE 
DEPARTMENT OF NATIONAL DEFENSE, AND PROVIDING FUNDS THEREFOR
EXPLANATORY NOTE
There are two key interrelated reasons why countries develop a defense 
industry*—strategic and economic (Bitzinger, Richard A, 2013)1. Strategic reasons 
include ensuring security of supply to compensate for perceived strategic isolation, to 
prevent overdependence, or address vulnerability to sanctions; and for national 
prestige or "technonationalism" (Edgerton, David E.H, 2007)2. Economic reasons 
include the promotion of backward linkages with other sectors such as steel and 
machine tools; development of "technology locomotives"; import-substitution which 
help preserve foreign currency reserves and create jobs; and lastly, hopes for export 
earnings,3
1 Bitzinger, Richard A. "Revisiting Armaments Production in Southeast Asia: New Dreams, Same Challenges." Contemporary Southeast Asia, voi. 35, no. 3, 
2013, p. 369,10.1355,/cs35-3c. Accessed 21June 2019.
JEdgerton, David E.H. "The Contradictions of Techno-Nationaiism and Techno-Globalism: A Historical Perspective. "New Global Studies, vol. 1, no. 1, 31 Jan. 
2007, 10.2202/1940-0004.1013.
3 "Opportunities and Challenges Facing Philippine Defense Industrial Development.' NDCP, ndcp.edu.ph/opportunities-and-challenges-facing-phUippine- 
defen$e-industrial-development/P_ednref5. Accessed 24 June 2022,


The Self Reliant Defense Posture (SRDP) Program was setup and established in 
1974 under President Ferdinand Marcos to address the AFP's materiel requirements 
for counterinsurgency operations, aiming to establish the country's defense industry.
This bill seeks to reinvigorate and strengthen its objective for self-reliant 
defense capability or the Self Reliant Defense Posture (SRDP) Program. A defense 
industry that will sufficiently address the requirements for our country's desired 
defense buildup, to secure our sovereignty and national territory.
In this light, the Immediate passage of this bill is highly recommended.
JINCsGOY EJERCITO ESTRADA


NINETEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
72 JUL18 A9 m
42
S. No.
SENATE
682
RECEIVED DV.
Introduced by Senator Jinggoy Ejercito Estrada
AN ACT
PROVIDING FOR THE DEVELOPMENT OF A NATIONAL DEFENSE INDUSTRY 
THROUGH THE STRENGTHENING AND REVITALIZING OF THE SELF 
RELIANT DEFENSE POSTURE (SRDP) PROGRAM, INCENTIViZING IN 
COUNTRY ENTERPRISES, RATIONALIZING DEFENSE ACQUISITION, AND 
CREATING THE OFFICE OF THE UNDERSECRETARY FOR DEFENSE 
TECHNOLOGY RESEARCH AND INDUSTRY DEVELOPMENT UNDER THE 
DEPARTMENT OF NATIONAL DEFENSE, AND PROVIDING FUNDS THEREFOR
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
1 
Section 1. Short Title. - This Act shall be known as the "Self-Reliance Defense
2 
Posture Revitalization Act of2022'.
3 
Sec. 2. Declaration of State Policy. - The State declares the development of the
4 
National Defense Industry as an indispensable element of national defense. Towards
5 
this end, the State shall recognize the foliowing:
6 
(1) The vital role of the Industry in nation-building and that with respect to
7 
government acquisition and incentives, the Industry is a class on its own that
8 
must be prioritized;
9 
(2) The necessity of an independent and self-reliant sovereign state, capable of
10 
providing its own resources for defense, security and national survival as a
11 
matter of national strategy, specifically during war and other national
12 
emergencies;
13 
(3) The consistency of the Filipino First Policy in developing national defense;


1 
(4) The indispensability of the active participation of and collaborative
2 
partnerships with the private sector in the strengthening of national defense
3 
of the country; and,
4 
(5) The capability of the Philippines in ensuring the adequate supply of affordable,
5 
globally-competitive; quality and accessible defense implements, equipment,
6 
machinery, systems and solutions, and in giving priority to stimulating and
7 
maintaining defense technology research, science and technology education,
8 
training and services, and defense industry development.
9 
For this purpose, the Government shall strengthen and revitalize the Self Reliant
10 
Defense Posture (SRDP) Program, incentivize private sector participation in the
11 
Industry, rationalize defense acquisition, and create the Office of the Undersecretary
12 
for Defense Technology Research and Industry Development which are all intended
13 
to foster the progressive growth of the Industry and hasten defense self-sufficiency
14 
of the country.
15 
Further, the State recognizes the important role of science and technology,
16 
academic research and development institutions, and technology transfer for
17 
developing effective defense capabilities to respond and accomplish defense missions
18 
and to drive genuine modernization.
19 
Sec. 3. Definition of Terms. - For purposes of this Act, the terms below shall be
20 
construed to mean, except when explicitly Indicated or where the context clearly
21 
indicates otherwise, as follows:
22 
(a) Acquisition shall refer to the bureaucratic management and procurement
23 
process dealing with the investment of the country in technologies, programs
24 
and product support necessary to support national defense and security and
25 
support its armed forces. It shall include the acquisition of raw material, critical
26 
components and materiel.
27 
(b) AFPsh^W refer to the Armed Forces of the Philippines.
28 
(c) BoardshaW refer to the Board of Investments.
29 
(d) CountertradeshaW refer to international trade by exchange of goods rather than
30 
by currency purchase.
31 
(e) Criticai Components shall refer to components, subsystems, systems, and
32 
related special tooling and test equipment essential to the production, repair.


1 
maintenance, or operation of weapon systems or other items of equipment
2 
identified as being essential to the execution of any National Defense and
3 
National Security strategy.
4 
(f) Departmentshd\\ refer to the Department of National Defense.
5 
(g) DOFshaW refer to the Department of Finance.
6 
(h) GPPB shaW refer to the Government Procurement Policy Board.
7 
(i) Government to Government Transactions shall refer to contractual
8 
arrangements between the Philippines and other sovereign nations for the
9 
acquisition of materiel and other defense -related acquisitions.
10 
(j) Highest Rated Bid shall refer to the offer with the highest calculated rating
11 
based on the criteria/parameters not limited to capability, quality, timeliness of
12 
delivery, life cycle cost, after-sales support, transfer of technology, warranty,
13 
perquisites and price.
14 
(k) In-country Enterprises s\\aW refer to (1) Filipino-owned enterprises engaged in
15 
the manufacturing, servicing and operation of materiel in the Philippines, or (2)
16 
foreign-owned enterprises engaged in the manufacturing, servicing and
17 
operation of materiel provided however, that such foreign-ov\/ned enterprises
18 
shall locate a substantial portion of their oroduction within the Philippines.
19 
(I) Industry s\\aW refer to the National Defense Industry.
20 
{vc\)Integrated Logistics Support refers to an integrated and iterative process for
21 
developing materiel and a support strategy that optimizes functional support,
22 
leverages existing resources, and guides the system engineering process to
23 
quantify and lower life cycle cost and decrease the logistics footprint, making
24 
the system easier to support.
25 
(n) Manufacturing refers to the process of converting raw materials, components,
26 
or parts Into finished materiel, whether using 
manpower, machines or a
27 
combination thereof.
28 
(o) MaterieishaW refer to military technology, materials and equipment, including
29 
but not limited to arms and ammunition and combat clothing.
30 
(p) Minimum Locai Content refers to the minimum percentage of intermediate
31 
goods used in the manufacturing processes to be sourced from in-country
32 
enterprises.


1 
(q) National Defense refers to the policies, measures and initiatives intended to
2 
provide the necessary protection of the State against externa! and internal
3 
threats.
4 
(r) National Security refers to the policies, measures and initiatives intended to
5 
protect the interests of the country and to protect the State from all forms of
6 
crises.
7 
(s) NEDA shall refer to the National Economic and Development Authority.
8 
(t) Operating refers to the process of functioning or operating of materiel or
9 
facilities, utilities and appurtenances thereto which are necessary for the
10 
manufacture, servicing or operating of materiel or components.
11 
(u) Plan shall refer to the Investment Priorities Plan as provided in the Omnibus
12 
Investment Code.
13 
(v) PresidentshaW refer to the President of the Republic of the Philippines.
14 
(w) Private Sector refers to the part of the country's economic system that is not
15 
under direct government control.
16 
(x) Program shall refer to the SRDP.
17 
(y) Raw Materials refer to the basic material from which materiel is manufactured.
18 
(z) Secretarys\\b}\ refer to the Secretary of National Defense.
19 
(aa) Servicing refers to the process of maintaining, repairing or overhauling
20 
materiel.
21 
(bb) 
SLCCs\\dW refer to the Single Largest Completed Contract requirement
22 
as provided in the implementing rules and regulations of Republic Act No. 9184.
23 
(cc) 
SRDPshd^\ refer to the Self Reliant Defense Posture as provided under
24 
pertinent laws.
25 
Sec. 4. The National Defense Industry - For the interest of the nation, the
26 
National Defense Industry shall be developed in accordance with the following:
27 
(a) The dependence of the country on foreign support for defense requirements
28 
shall be limited In accordance with this Act and/or the policies approved by the
29 
President;
30 
(b)To develop the defense capability of the country, the State shall rely primarily
31 
on and give preference to developing In-Country Enterprises, allocating
32 
substantial resources and manpower to defense research, utilizing to the fullest


1 
the country's natural resources as the source of the country's defense needs,
2 
and providing relevant technical and financial assistance to the private sector;
3 
(c) To develop the defense capability of the country, the State shall rely on materiel
4 
produced, manufactured or otherwise created locally;
5 
(d) To develop the defense capability, the State shall only use materiel from foreign
6 
sources when such materiel cannot be locally produced, manufactured or
7 
otherwise created: Provided, that importation from such foreign sources shall
8 
be for the ultimate objective of acquiring technology for the production of such
9 
unavailable materiel;
10 
(e)In order to reduce foreign exchange outflow, generate local employment
11 
opportunities and enhance technology transfer to the Philippines, the Secretary
12 
shall, as far as practicable, incorporate In each agreement involving the
13 
Government and the manufacturing, servicing or operation of materiel special
14 
foreign exchange reduction schemes and countertrade, in-country manufacture
15 
co-production, or other innovative arrangements or combinations thereof; and,
16 
(f) The Program shall be developed in accordance with the provisions of this Act.
17 
Sec. 5. Incentives. - (A) Any provision of law to the contrary notwithstanding,
18 
foreign and local enterprises engaged or proposing to engage in the manufacture,
19 
servicing and/or operation of materiel for the Government may be registered and may
20 
avail of the incentives under and subject to the conditions in Executive Order No. 226
21 
othervdse known as the Omnibus Investments Code: Provided, That, notwithstanding
22 
Article 27 thereof, manufacturing, servicing and/or operation of materiel shall be
23 
included in the Investment Priorities Plan every year by operation of law after the
24 
effectivity of this Act until otherwise removed by the Board or the President: Provided/
25 
further, That the removal of the manufacturing, servicing and/or operation of materiel
26 
from the Plan subsequent to the effectivity of this Act shall not be interpreted as a bar
27 
or restriction on the Board from later including the manufacturing, servicing and/or
28 
operation of materiel in the Plan.
29 
In the interest of National Security, the Board shall adopt a special procedure
30 
in the processing of applications for registration by enterprises in the Industry and
31 
offering goods or services to the government under the Program.


1 
(B) Government financial institutions are highly encouraged to support the
2 
Industry by formulating and extending financial products that would benefit its
3 
hastened development
4 
(C) In addition to the incentives provided in E.O. 226, foreign and local
5 
enterprises engaged in the manufacture, servicing and/or operation of materiel
6 
registered with the Board shall enjoy exemption from customs duties and national
7 
Internal revenue taxes payable on the imporlation of raw materials and critical
8 
components by registered enterprises for the purpose of producing materiel.
9 
Sec. 6. Rationalization of Defense Acquisition. - (A) Any provision of law to the
10 
contrary notwithstanding, the Secretary, in behalf of the Government, is hereby
11 
authorized to enter into contracts, under such terms and conditions as may be agreed
12 
upon, with any natural or juridical person, with or without public bidding, for the
13 
manufacture, servicing or operation of materiel or components thereof, facilities,
14 
utilities and appurtenances thereto which are necessary for the manufacture, servicing
15 
or operating of such materiel or components thereof necessary for national defense:
16 
Provided, That in the exercise of such authority, the Secretary shall comply with the
17 
reportorial requirements under Section 13 of this Act.
18 
(B) Any provision of law to the contrary notwithstanding, contracts for the
19 
manufacture, servicing or operation of materiel or components thereof, facilities,
20 
utilities and appurtenances thereto which are necessary for the manufacture, servicing
21 
or operating of such materiel or components thereof necessary for national defense
22 
which are determined by the Secretary as not requiring public bidding shall only be
23 
awarded to in-country enterprises: Provided, That such materiel or components
24 
thereof, facilities, utilities and appurtenances thereto can be locally produced,
25 
manufactured or otherwise created.
26 
(C) In the event that public bidding is required by the Secretary, and the
27 
manufacture, servicing or operation of materiel or components thereof, facilities,
28 
utilities and appurtenances thereto which are necessary for the manufacture, servicing
29 
or operating of such materiel or components thereof necessary for national defense
30 
cannot be locally produced, manufactured or otherwise created, and whenever several
31 
bidders shall participate in the public bidding, in the evaluation of the criteria on price,
32 
when comparing foreign enterprises with in-country enterprises:


1 
(l)In the event a public bidding utilizes the standard of lowest and
2 
calculated and responsive bid, bids of in-country enterprises shall be
3 
considered as having a price less than that proposed by foreign
4 
enterprises as long as such bids shall not be more than fifteen percent
5 
(15%) in excess of the bid of such foreign enterprise; and
6 
(2) In the event a public bidding utilizes the standard of highest rated bid,
7 
bids of in-country enterprises shall be considered as having won the
8 
criteria of price as long as its bid shall not be more than fifteen percent
9 
(15%) in excess of the bid of such foreign enterprise.
10 
(D) In the event that public bidding is required by the Secretary, and the
11 
manufacture, servicing or operation of materiel or components thereof, facilities,
12 
utilities and appurtenances thereto which are necessary for the manufacture, servicing
13 
or operating of such materiel or components thereof necessary for national defense
14 
cannot be locally produced, manufactured or otherwise created, and only foreign
15 
enterprises participate, the ultimate objective of the Department will be technology
16 
transfer and the acquiring of knowledge for eventual local production.
17 
(E) Nothing in this Act will prohibit or restrict lawful government to government
18 
transactions for the manufacture, servicing or operation of materiel or components
19 
thereof, facilities, utilities and appurtenances thereto which are necessary for the
20 
manufacture, servicing or operating of such materiel or components thereof necessary
21 
for national defense.
22 
(F) In Section 5(C), 5(D) and 5(E), the Department In consultation with
23 
representatives of in-country enterprises will issue reasonable regulations on the
24 
minimum local content for all defense-related acquisitions. The Department may
25 
consult with other government agencies to determine such minimum local content.
26 
Further, in order to support the economic and employment generation thrusts
27 
of the country, all defense acquisitions requiring the engagement and/or hiring of
28 
civilian labor shall mandatorily require that all labor needs be sourced from local
29 
sources and shall, as far as practicable, be Filipino.
30 
(G) In Section 5(C), 5(D) and 5(E), Integrated Logistics Support must be
31 
incorporated In all contracts concerning defense-related acquisitions.


1 
Sec. 7. Multi-Year Contracts and Other Contractual Arrangements. - For the
2 
purpose of acquisition of materiei, notwithstanding existing laws to the contrary, and
3 
subject to Section 13 of this Act, the Department and its bureaus shall be authorized
4 
to enter into multi-year contracts and other multi-year contractual arrangements:
5 
Provided, That Congress shall, upon issuance of a multi-year obligation authority by
6 
the DBM, make the corresponding appropriation for the ensuing fiscal years: Provided, 
1 further, That the Department, in consultation with DBM shall issue implementing
8 
guidelines to ensure consistency with the Revised AFP Modernization Program and this
9 
Act: Provided, furthermore. That understanding that the absence of multi-year
10 
contracts is a primary reason for the poor development of the Industry, the DBM shall
11 
cooperate with the Department in expediting the Issuance of multi-year obligation
12 
authorities as necessary: Provided, finally. That the Department and its bureaus are
13 
directed to coordinate and to conduct acquisition planning for the purpose of
14 
imiplementing multi-year contractual arrangements and other multi-year obligations.
15 
Sec. 8. Performance Undertakings. - The DOF is authorized to recognize the
16 
obligations of the Department and its bureaus with regard to the acquisition of materiel
17 
as obligations of the Republic of the Philippines and to undertake to pay the same in
18 
the event of non-payment by the Department and its bureaus.
19 
Sec. 9. Countertrade. - Countertrade for defense-related acquisition shall be
20 
significant, meaningful and must be of benefit to the Industry.
21 
Sec. 10. Exemption from SLCC. - In-country enterprises participating in the
22 
acquisition of materiel by the Department and its bureaus shall be exempt from the
23 
SLCC requirement upon effectivity of this Act.
24 
Sec. 11. Acquisition System. - Subject to the provisions of this Act, the system
25 
and procedures for acquisition of materiei, with or without public bidding, shaii be in
26 
accordance with a special law on defense-related procurement: Provided, That
27 
Republic Act No. 9184 or any subsequent general law on procurement shall apply
28 
suppletorily: Provided, further. That the Department and its bureaus, in consultation
29 
with the DBM and the GPPB, shall strengthen their systems and procedures for
30 
acquisition of materiel under this Act.
31 
Sec. 12. Creation of the Office of the Undersecretary for Defense Technology
32 
Research and Industry Development - There shall be created in the Department an


1 
Office of the Undersecretary for Defense Technology Research and Industry
2 
Development directly under the Secretary. The Office shall be headed by an officer
3 
with the rank of Undersecretary, assisted by an Assistant Secretary and supported by
4 
at least three (3) directors with the equivalent rank of Director IV. The Office will be
5 
charged with the responsibility of managing and administering a databank for analysis,
6 
conducting research and development and technology transfer, facilitating defense
7 
industry promotion, establishing public-private partnerships, and setting up domestic
8 
and foreign collaborations, and advising the Secretary on all matters pertaining to the
9 
development of the National Defense Industr/ in accordance with this Act; and
10 
recommending policies, rules and regulations to the Secretary for the development of
11 
the National Defense Industry and the implementation of this Act. The Undersecretary,
12 
Assistant Secretary and Directors shall be appointed by the President of the
13 
Philippines.
14 
Sec. 13. Reporting and Oversight - The Secretary shall, not later than the end
15 
of the first quarter of the succeeding year, submit to the President and Congress:
16 
(1) An annual report on the acquisitions made under this Act; and,
17 
(2) Copies of the multi-year contracts and other agreements entered Into by the
18 
Department and its bureaus.
19 
Pursuant to Its constitutional duties, the Executive Department, particularly the
20 
NEDA, the Commission on Audit, and the Congress shall discharge oversight functions,
21 
to wit:
22 
(a) The NEDA shall conduct annual review of the status of all defense-related
23 
acquisitions via the authority exercised by the Secretary in Section 6 of this
24 
Act, identify causes of delays, reasons for bottlenecks, cost overruns, both
25 
actual and prospective, and continued viability, and report to Congress not
26 
later than June 30 of each year;
27 
(b) The Commission on Audit shall conduct: an audit on each ongoing, and
28 
completed acquisition and report to Congress not later than June 30 of each
29 
year; and,
30 
(c) There shall be a Congressional Oversight Committee composed of the
31 
Chairmen of the Committee on National Defense and Security of both the
32 
Senate and House of Representatives who shall serve as Co-Chairmen of the


1 
Oversight Committee and four (4) mem,bers each from the Senate and the
2 
House representing the majority and two (2) members each from the Senate
3 
and the House representing the minority to be designated by the leaders of
4 
the majority and minority in the respective chambers.
5 
Sec. 14. Promotion and Marketing Support. - The Government shall promote
6 
the export of locally-made materiel and the in-country enterprises to other countries,
7 
and is encouraged to provide financial marketing support for the purpose of such
8 
promotion.
9 
Sec. 15. Cooperation of Government Agencies. - The DBM, DOF, Board, GPPB
10 
and other government agencies are enjoined to support the implementation of this
11 
Act.
12 
Sec. 16. Appropriation. - An initial funding of One billion pesos
13 
(P1,000,000,000.00) shall be appropriated to the Department for the purpose of
14 
implementing this Act. Subsequent funding shall be included in the annual General
15 
Appropriations Act.
16 
Sec. 17. Repeaiing Ciause. - Sections 1 and 2 of Presidential Decree No. 415,
17 
as amended by Presidential Decree No. 1081 is hereby repealed.
18 
The following laws, orders and regulations are .he.reby modified or
19 
supplemented, as the case may be, in accordance with this Act:
20 
(l)An exception is hereby made to Government Procurement Policy Board
21 
Resolution No. 06-2003 in relation to its amendment to Section 1 of Presidential
22 
Decree No. 415;
23 
(2) An exception is hereby made to Republic Act No. 10667 otherwise known as
24 
the Philippine Competition Law in relation to Its repeal of Section 4 of
25 
Commonwealth Act No. 
138;
26 
(3) An exception is hereby made to Republic Act No. 9184 otherv/ise known as the
27 
Government Procurement Reform Act insofar as it covers procurement of
28 
materiel;
29 
(4) An exception is hereby made to Republic Act No. 1884 insofar as the exercise
30 
of the responsibility of the Office of the Undersecretary of Defense for Munitions
31 
In research and development; and
10


1 
(5) Section 5 of Republic Act No. 10349 insofar as it amends Section 9 of Republic
2 
Act No. 7898 is hereby supplemented.
3 
Apart from the foregoing, all provisions of existing laws, orders, and regulations
4 
contrary to or inconsistent with this Act are hereby repealed or modified accordingly.
5 
Sec. 18. Separability Clause. - If any provision of this Act shall be held
6 
unconstitutional or invalid, the other provisions not otherwise affected shall remain in
7 
full force and effect.
8 
Sec. 19. Roie of the GPPB. - The GPPB shall continue to fulfill its functions as
9 
provided in Republic Act No. 9184 subject however to the provisions of this Act:
10 
Provided, That in no case shall the GPPB interpret Republic Act No. 9184 or any
11 
subsequent general law on procurement as overriding any of the provisions of this
12 
Act. The Secretary shall continue to serve as a member of the GPPB.
13 
Sec. 20. Rule of Interpretation. - Rights and obligations existing on the date of
14 
effectivity of this Act and arising out of contracts shall be governed by the original
15 
terms and conditions of said contracts or the law in force at the time such rights were
16 
vested.
17 
Sec, 21. Implementing Rules and Regulations; Supplementary Regulations. -
18 
Subject to the provisions of this Act, the President thru the Secretary is authorized to
19 
Implement this Act, formulate and amend, whenever necessary, the implementing
20 
rules and regulations and standard forms necessary for the implementation of this Act,
21 
and issue supplemental regulations to hasten and facilitate the implementation of this
22 
Act.
23 
Sec. 22. Effectivity. - This Act shall take effect fifteen (15) days following its
24 
complete publication In the Official Gazette or in two (2) national newspapers of
25 
general circulation.
Approved,
11