Section 20Sec./Art. 20

Countertrade and Offset. - Countertrade and offset shall be integrated as part of the procurement policy and procedures in the DND, including those of its attached agencies, bureaus, and offices, with respect to its purchase or procurement of imported capital equipment, machinery, supplies, material, and services, as an added value in the selection of a supplier during the procurement of goods and services.

In order to reduce foreign exchange outflow, generate local employment opportunities, and enhance technology transfer to the Philippines, the Secretary of National Defense, shall, as far as practicable, incorporate in each agreement involving the Government the development, production, manufacturing, assembly, servicing, or operation of materiel, special foreign exchange reduction schemes, offset, and countertrade, in-country manufacture co-production, or other innovative arrangements or combinations thereof.