Congress ratifies bill on local defense equipment production

CONGRESS has ratified a bicameral conference committee report of a bill that seeks to boost the country’s defense program through investments in local defense equipment manufacturing amid growing tensions with China.

At the Senate’s plenary session on Monday, Senate President Pro-Tempore Jose “Jinggoy” P. Estrada, Jr. said the consolidated bill includes a clause that would ensure preferential treatment for local defense industry players for the state’s military purchases.

The House of Representatives separately approved the bicameral report through a voice vote.

“Our proposal aims to ensure that our weapons, vehicles and other equipment for our soldiers, police officers and law enforcement personnel are made in the Philippines by Filipinos,” Mr. Estrada told the floor in Filipino.

“By strengthening the local defense industry to meet the needs of our armed forces and national defense, we expect this initiative to create job opportunities for our citizens, drive innovation and development and reduce foreign exchange outflow,” he added.

The senator said the bill offers incentives to attract foreign defense industry investors.

The Senate approved the bill in December, while the House approved its version in January.

The measure allows the Defense department to develop a self-reliant defense posture program that will encourage manufacturers to produce weapons and defense systems in the country for local use and exports. It will also give the agency P1 billion in funding.

Local defense enterprises will be exempted from value-added tax, Customs duties on capital equipment imports and raw materials.

“With the bill, we want to give the local defense industry a fighting chance at growing into a robust industry,” Senator Juan Miguel F. Zubiri, one of the authors of the bill, told the plenary.

“We want to help local producers accelerate their growth and their ability to come out with competitively priced quality material for our own use.”

China claims more than 80% of the South China Sea based on a 1940s map, which a United Nations-backed arbitration court voided in 2016.

The Philippines has been unable to enforce the ruling and has since filed hundreds of protests over what it calls encroachment and harassment by China’s coast guard and its vast fishing fleet. — John Victor D. Ordoñez and Kenneth Christiane L. Basilio