The aircraft was acquired by Derco in 2007 after being damaged in a runway incursion in Gafsa, Tunisia, says the Philippine defence ministry.
"The US C-130 technical co-ordination group team that conducted the assessment of the damaged aircraft subsequently recommended its repair by replacing specified sections of the fuselage and the nose section," it adds.
Derco repaired the aircraft - serial number 5020 - in partnership with Malaysian MRO firm Airod. The Philippine air force expects to receive the aircraft before the end of 2011. It already operates two C-130Hs, as listed in Flightglobal's MiliCAS database.
The aircraft will come with upgraded avionics, including a glass cockpit, plus other flight management, navigation and communication enhancements. The deal also includes two years of support.