Section 3Sec./Art. 3

Definition of Terms. - As used in this Act:

(a) Acquisition refers to the process of procuring technologies, programs, and product support that are necessary for national defense and security, in order to support the armed forces of the country. It shall include the acquisition of raw materials, critical components, and material;

(b) Allied Industries refer to various industries which are part of the supply chain in the development, production, manufacturing, assembly, servicing, or operation of material;

(c) Countertrade refers to a form of international trade whereby the supplier commits to introduce investments, technology transfer, training or skills upgrade, donations or related activities, including in-country production, all of which will assist in the establishment or development of local industries or technical facilities or expansion of technological and industrial capabilities of the Department of National Defense (DND) and the Philippines;

(d) Critical Components refer to components, systems, subsystems, and related special tooling and test equipment essential to the production, repair, maintenance, or operation of weapon systems or other items of equipment identified as being essential to the execution of any national defense and national security strategy;

(e) In-country Enterprise refers to: (1) a Filipino-owned enterprise engaged in the development, production, manufacturing, assembly, servicing, or operation of material in the Philippines or (2) a joint venture by a Filipino enterprise with a foreign-owned enterprise engaged in the development, production, manufacturing, assembly, servicing or operation of materiel, where at least sixty percent (60%) of the venture is owned by Filipinos: Provided, That in-country enterprise shall locate in the Philippines a substantial portion of their development, production, manufacturing, assembly, servicing, or operation of material to be determined in the rules and regulations implementing this Act by the DND, in consultation with the National Economic and Development Authority (NEDA) and the Board of Investments (BOI);

(f) Integrated Logistics Support refers to an integrated and iterative process for developing a materiel and support strategy that optimizes functional support, leverages existing resources, and guides the system engineering process to quantify and lower life cycle cost and decrease logistics footprint, making the system easier to support, and ensuring that defense materiel, personnel, goods, and services are at the appropriate place and time;

(g) Materiel refers to military technology, weapon systems, arms, ammunition, combat clothing, armor, vehicles, and other similar military equipment, and materials;

(h) Minimum Local Content refers to the minimum percentage of intermediate goods used in the manufacturing processes to be sourced from in-country enterprises;

(i) Operation refers to the process of functioning or operation of materiel or facilities, utilities, and appurtenances thereto which are necessary for the manufacturing, servicing, or operation of the materiel or its components;

(j) Servicing refers to the process of maintaining, repairing, or overhauling materiel; and

(k) Strategic Investments Priorities Plan (SIPP) refers to the government's list of priority areas and preferred activities that are entitled to tax incentives under law.