Knowing the Role of Philippine International Trade Corp on Defense Procurement Deals

The Philippine Procurement on military equipment is usually done by the Department of National Defense itself wherein from bidding to government-to-government deals, they are the ones who directly get involved in it. It will get change as it will involve a mediator when it comes to negotiations which definitely includes the procurement of projects in the scope of the Modernization Program.

PITC or the Philippine International Trading Corporation
will be at the forefront of defense deals soon.
Photos from different owners.
The Department of National Defense or DND, at the first years of the revised AFP Modernization Program implementation, is the one who negotiates for military equipment that is slated as per the plans of each and every branch of the Armed Forces like the Navy, the Air Force and the Army which are based on their perceived needs.

With the Horizon 2 coming in months ahead, here comes the news reported by both the People's Television and IHS Janes about the signing of Memorandum of Understanding or MOU between the Department of National Defense and Department of Trade and Industry's sub-agency the Philippine International Trading Corporation in which it will aim the facilitation of procurement as well as trade services, government-to-government deals, and other matters which it may mean better negotiations with the supplier or provider to the government which it aligns to the agreements and specifications the Defense Department sets.

The said undertaking gives a piece of good news where military procurement deals will be helped upon in the sense that all considerations are in place as well as both the supplier and the Defense Department will have their terms complied with regards to the specifications, terms of payment, and other agreement that is attached to the deal.


Philippine International Trade Corp (website: is a government-owned and controlled corporation which in itself is attached under the Department of Trade and Industry which, as a state trading company has a role of partnering local entrepreneurs and industries to promote globally which it may involve promoting their goods and services as well as serving as a guide for foreign businesses to invest in the country.

To summarize their aim which as specified in the "About Us" section of their webpage, their primary goal is to contribute their 40-year expertise in terms of trade negotiations with professionalism and integrity being their main pillars for them to do their mandate. 

This is definitely good since their role focuses more on binding trade agreements and strengthening business relations to various clients which in it brings benefit to the businesses as well as to the stakeholders and the country itself. 

The creation of the Philippine International Trade Corporation traces back to the Marcos administration where Presidential Decree no. 1071 was approved back then which created this company. Being expanded as a prime mover in the expansion of the Philippine trade, their services and expertise may now be used to improve the capabilities of the Armed Forces of the Philippines through the said memorandum of agreement that was signed upon.

To understand further and deeper about the point of the deal between the Defense Department and PITC is about, it is worthy to gather knowledge and understand about the way military equipment is procured where, just like in any government-related transactions, involves a step-to-step process that is in adherence to procurement laws.

Electronic Procurement Systems like PhilGEPS aids for transparent
as well as an effective communications channel for the bidders to
know and participate.
For more in-depth reading, click this detail on the Government Procurement Reform Act or R.A. 9814. Presented below will be a summarized version intended for defense-related purposes.

Procurement or purchase of equipment for the government where it includes military platforms are governed by laws that are intended to supplement as well as to regulate the process to have the best equipment (whenever possible) suited for the job where it is to be done or materialized within the stipulated timeline as well as to get within the specifications and the budget provided. These things do come with integrity, transparency, and accountability in mind where taxpayer's contributions are felt being used on worthy projects such as the ones slated in the Revised AFP Modernization Program.

One way to purchase equipment for the government especially for the Philippine military is through competitive bidding wherein its definition, the supplier, manufacturer or contractor will come up an offer which is to compete with other bidders where measurements include determining the Approved Budget for the Contract (ABC), specifications or goods in legal terms, a timeline of delivery and other step-by-step processes which by nature upon the stipulation of the law shall be determined by a certain agency's Bids and Awards Committee or BAC

The Bids and Awards Committee plays a huge role in having a successful bid and eventually having fully-effective equipment units for various government agencies to use to conduct to the things they are mandated. It is their duty to conduct bidding and its processes like pre-procurement and pre-bid conferences, evaluating the bid details, undertaking post-qualification proceedings, and finally, awarding the contract to the winning bidder. Add to these things which are done step-by-step which the process is stringent to determine the bidder which will bag the project, let us consider that the BAC can create a Technical Working Group or TWG which consists usually of experts from financial, legal, and defense equipment or systems in the case of the military where they are exchanging ideas, gathering research papers and comes up in an idea which subsystems that can be fitted a single platform like a warship or determining the ideal platform for a certain military branch to have with considerations for logistics, spare parts, and the budget for fuel consumption and maintenance.

Hence, these things need to be in place considering that it is the bounding laws implied by the government to purchase its needed equipment or various weapons platforms in the case of the military. Add to that, the projects under the revised AFP Modernization Program are slated upon by planners in the ranks, and the ones involved in it wherein it can get change by the time goes on. 

The military planners, particularly the BAC and the TWG which provides assistance are the ones who make military procurement things a reality where they provide indirect support for the personnel in the front lines in a way that they provided the platforms needed for them to do their mandate. Having these groups doing their jobs thoroughly, and there will be nothing to worry about with regards to weapons purchases.


A certain bids and awards committee in a Government Agency like the Department of National Defense and PITC are related in terms of dealing with third parties like weapons manufacturers, suppliers, and contractors which both are opting for negotiations where the former and the latter have different purposes and approach.

To further connect the dots, only the Philippine International Trade Corporation can implement the Counter-trade Policy on behalf of the Department of Trade and Industry [link]. This arrangement is existing upon the creation of it through Executive Order No. 120 of 1993 under the Presidency of Former Pres. Fidel Ramos. And speaking of the said executive order for Counter-trade Policy, it definitely emphasizes providing tech transfer and industrial growth in strategic industries which includes defense matters aside from improving economic development which is the main purpose of the said executive order. Being a partner of the Defense Department in the counter-trade program, it goes with hope that a recently-signed memorandum of understanding that further bind the Department of National Defense and PITC will open greater opportunities for both sides to help or assist with one another to further achieve the goals of Modernizing the Armed Forces which is definitely planning on purchasing military equipment from numerous foreign defense companies across the globe. 

In this sense, the PITC may play a key role as a mediator or rather, the bridge between the Defense Department and various weapons suppliers that in there goes with the hopes and opportunities that negotiations will get on smoothly which it is helpful in terms of settling things that may have agreed upon considering if there is a deal that may take place in the future. 


Such undertaking like signing a Memorandum of Agreement between PITC and DND alongside the Department of Trade and Industry is a welcoming action which in it may derive endless possibilities and potential that it may bring for the better economic development of the country as well as for its national security.

Furthermore, it also goes in line with the Revised AFP Modernization Program where military equipment required to attain minimum deterrence is being planned and slated for materialization wherein it goes with the hopes that the armed forces will further enhance its capabilities to conduct its mandate. 

Also, it is worth the understanding about the role of PITC as well as the inner workings of the Philippine Procurement law which provide the Bids and Awards Committee the mandate together with the assistance from its Technical Working Group are doing their part and making their best out for the fruition of the project that may eventually be turning it into reality should a purchase went well where it went smoothly through the procurement process.

Hence, this undertaking between a government department and a government-owned and controlled corporation (GOCC) specialized in promoting trade is something that we will be watching about where the agreement may see its application sometime in the future. 

And as far as the period of time this article is written is concerned, it is now less than two months until Second Horizon will start the next year 2018. Time will tell about this agreement being applied in defense deals, but with the AFP Modernization Program keeps on rolling, the hopes and dreams of attaining the minimum credible defense will remain there as always alongside economic growth, life alleviation from poverty, motivation, and inspiration for a better status within the family, the community, the city, and the nation. Inspire More!


Anonymous said...

This is indeed a good idea. However, we shall be vigilant especially on the "counter-trade" part. Anyways, it will be good if anything pushes through.

Just wondering how it is good to work in a certain government office or for what now. Just focusing more on food supply chain though.

~ Comrade

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