New defense bill up for signing

PRESIDENT Ferdinand R. Marcos, Jr. is set to sign a measure boosting the country’s defense program through investments in local defense equipment manufacturing on Tuesday, Senate President Francis G. Escudero said on Monday.

The approval of the bill will help the country assert an independent foreign policy, saying it’s a “major step” towards reducing reliance on foreign allies for materiel, he added.

“It is high time for the Philippines to reduce its reliance on its allies for the supply of its defense requirements,” Mr. Escudero said in a statement in mixed English and Filipino.

“This is also a major step toward fulfilling the Marcos administration’s goal of having an independent foreign policy. We will no longer be at the mercy of the whims of our ally suppliers, whose sentiments toward us could shift abruptly with a change in leadership.”

The measure will also “have a huge impact on the economy because not only will it create new jobs but also result in foreign currency savings for the government,” he added, noting it would help position the Philippines as an exporter of military weapons in the future.

The Philippines relies on government-to-government deals for the procurement of defense assets, according to Mr. Escudero. Philippine imports of military equipment amounted to $305 million in 2022, he said.

A priority measure by the Legislative-Executive Development Advisory Council, the self-reliant defense posture (SRDP) bill seeks the development of a domestic defense industry by exempting Philippine defense enterprises from value-added tax and customs duties on capital equipment imports and raw materials.

Mr. Escudero said the bill mandates the government to give preference to domestic defense companies for the “manufacturing, servicing or operation of materiel or components” of defense assets, with the state only considering foreign bidders if Philippine enterprises have no capability to do what was requested.

The bill also offers incentives to attract foreign defense industry investors to establish production lines of materiel in the Philippines while also providing protection for domestic industries against unfair competition.

It would also “promote technology transfer” of defense assets, he said, citing a “countertrade and offset” provision within the bill. “[It] will ultimately result in the improvement of processes, standards and efficiency in the manufacturing of materiel.”

“One of the goals of the SRDP is for the Philippines to become an exporter of military equipment. As the local industry develops, their market will expand, and the income of our citizens involved in these industries will also increase,” he said in mixed English and Filipino. — Kenneth Christiane L. Basilio