I already wrote something about the way Portugal would enter the war if Franco attacked. But I found some info about the plans for defense of Portugal.
The plans started to be made very soon, three months after the beginning of the civil war in Spain, and the conclusions that were made by then weren’t good. Once again, even knowing that the Spanish army was consider inefficient and didn't had the best commanders, their numeric superiority was overwhelming. One of the Portuguese commanders, Morais Sarmento, said that the only way the country could defend itself was by getting in "pé de guerra", in other words, to begin a silent process of mobilization.
In 1940 after the fall of France, two new things were added to the plans, they now had the way how forces should be placed in Alentejo and they stated the importance of preparing every bridge, between Spain and Portugal, to be destroyed as soon as the invasion started.
By then the plans of re-armament aren’t finished or even started. The major Portuguese ports aren’t defended against submarine attacks (anti-torpedo nets).
In 1940, when the operation Felix seemed for real, Portugal has enough armament for 10 divisions (The ones that weren’t for the force of 5 divisions, were destined to rearguard units), but it only had ammo for 4 days of fights.
In the Ministry of Defense’s data there are three divisions, but their armament and organization are obsolete, almost at the WW1 level. Portugal doesn’t have tanks or armored vehicles, it also doesn’t have anti-tanks weapons (this last one because the Spanish civil war a bad adviser).
Lisbon has some capability of aerial defense, but the whole country has only 12 British AA of 94mm, and 12 more of 75mm.
The unities of cavalry have enough weapons for 2 regiments, but don’t have enough horses.
Even after so many efforts, if Franco attacked Portugal, the Portuguese army couldn’t guarantee the territorial integrity.
If the 16th Panzer Division, which would attack by the north of Portalegre and the south of Elvas, with 120 tanks, probably supported by the 16th motorized division, their only enemy would be the damaged roads.