AN ACT PROVIDING FOR THE MODERNIZATION OF THE ARMED FORCES OF THE PHILIPPINES AND FOR OTHER PURPOSES

Nineth Congress
Third Regular Session

[ REPUBLIC ACT No. 7898, February 23, 1995 ]

AN ACT PROVIDING FOR THE MODERNIZATION OF THE ARMED FORCES OF THE PHILIPPINES AND FOR OTHER PURPOSES

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 "AFP Modernization Act."

Section 2. Declaration of Policy. - It is hereby declared the policy of the State to modernize the Armed Forces of the Philippines (AFP) to a level where it can effectively and fully perform its constitutional mandate to upbold the sovereignty and preserve the patrimony of the Republic of the Philippines. Toward this end, the principal thrusts of the modernization program under this Act shall be:

Section 3. Objectives of the AFP Modernization Program. -The AFP modernization program shall be implemented in accordance with the following objectives:

Section 4. Components of the AFP Modernization Program. -The AFP modernization program shall consist of the following components:

Section 5. Development of AFP Capabilities. - the AFP modernization program shall be geared towards the development of the following defense capabilities:

Section 6. Period of Implementation. - the modernization program under this Act shall be implemented over a period of fifteen (15) years: Provided, however, That payments for amortization of outstanding multi-year contract obligations incurred under this Act may extend beyond this period.

Section 7. Submission of the AFP Modernization Program. -

Section 8. Appropriations for the AFP Modernization Program. -The annual appropriations for the AFP modernization program shall include the amounts necessary to support the funding requirements for all modernization projects approved by Congress under the preceding section.

The funds to be appropriated by Congress under this Act shall be treated as a distinct and separate budget item from the regular appropriation for the Department of National Defense (DND) and the AFP and shall be administered by the Secretary of National Defense.

The proposed program shall be based on a ceiling, for the first five (5) years, of Fifty billion pesos (P50,000,000,000.00): Provided, That thereafter, this amount may be increased commensurate to the increase in the Gross National Product (GNP).

Section 9. Multi-year Contracts and Other Contractual Arrangements. -

Section 10. Self-Reliant Defense Posture Program. -

Section 11. AFP Modernization Act Trust Fund - There is hereby created a trust fund, to be known as the AFP Modernization Act Trust Fund. Said trust fund, which shall be used exclusively for the AFP modernization program, but not to include salaries and allowances, shall be funded out of the following:

The trust fund shall be administered by the Secretary of National Defense in accordance with existing government auditing rules and regulations.

Section 12. Modernization of the Government Arsenal. -The modernization of the government arsenal, for the development of production capabilities to enhance self-sufficiency in defense requirements, shall be part of the AFP modernization program. the government arsenal shall be effectively utilized in, the production of basic weapons, ammunition and other munitions for the use of the AFP and the Philippine National Police (PNP) , and for the sale and export of products in excess of AFP/PNP requirements. the government arsenal may use such production facilities as it may own or be provided with under this Act or as it may arrange, under joint venture, co-production or similar agreements with local and foreign entities.

Section 13. Austerity and Use of Savings. - Effective upon the approval of this Act, the Secretary of National Defense, shall submit to Congress, within the first quarter of the succeeding year, a report on:

The amount of all unused or undisbursed funds, other than unused appropriations for salaries and benefits of the AFP personnel, remaining from all previous DND and AFP appropriations; and

The amount of savings from austerity measures, which are hereafter to be pursued by all services and units of the AFP, generated in the previous fiscal year.

The savings generated under this section are hereby authorized to be used to augment funds for the AFP modernization program.

Section 14. AFP Procurement System. - the DND-AFP shall strengthen its systems and procedures for equipment acquisition, taking into account new requirements under the AFP modernization program. Contract negotiations and equipment acquisition shall be treated as two sequential but separate steps, each requiring the separate decision of the Secretary of National Defense. the decision making process for equipment acquisition shall start at the appropriate service command and submitted to the AFP Weapons Systems Board, while contract negotiation shall start at general headquarters AFP level. in its system and procedures for equipment acquisition, the provisions of Presidential Decree No. 1594, as amended, and other applicable laws shall apply.

Section 15. Guidance for the President. - to meet unforeseen national security emergencies, the President, upon the recommendation of the Secretary of National Defense, may modify the program through substitution or revision of a component project therein: Provided, however, That he shall report such action to Congress within thirty (30) days.

Section 16. Annual Reports. - Not later than the end of the first quarter of the succeeding year:

The Secretary of National Defense shall submit to the President and Congress an annual report on the status of the AFP Modernization Act Trust Fund, as provided for in Section 11 of this Act;

The Chief of Staff, AFP, shall submit to the President and Congress, through the Secretary of National Defense, an annual report containing the progress of the implementation of the modernization program under this Act to include the AFP modernization activities implemented prior to the approval of this Act.

Section 17. 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.

Section 18. Repealing Clause. - All laws, executive orders, rules' and regulations inconsistent with or contrary to this Act, are hereby deemed accordingly repealed or amended.

Section 19. Effectivity Clause. - This Act shall take effect after fifteen (15) days from its publication in at least two (2) newspapers of national circulation.

Approved,

This Act which is a consolidation of House Bill No. 13574 and Senate Bill No. 1867 was finally passed by the House of Representatives and the Senate on February 21, 1995 and February 20, 1995, respectively.

Approved: February 23, 1995

(Sgd.) FIDEL V. RAMOS
President of the Philippines