EIGHTEENTH CONGRESS OF THE )

REPUBLIC OF THE PHILIPPINES )
First Regular Session )
HOUSE OF REPRESENTATIVES
H.No. $357

Introduced by Rep. Vilma Santos-Recto
6th District of Batangas

AN ACT
MODERNIZING HEALTHCARE AND HEALTH INFRASTRUCTURE,
PROVIDING FUNDS FROM THE ANNUAL VALUE-ADDED TAX COLLECTIONS,
AMENDING FOR THE PURPOSE THE NATIONAL INTERNAL REVENUE CODE
OF 1997, AS AMENDED

EXPLANATORY NOTE

‘The Philippines’ health profile is typical of a middle developing country. Aside from
increasing population, deteriorating environment and poor nutrition, one of the biggest
factors responsible for the weak performance of the health sector is the inadequate and
ineffective public spending for health.

The passage of Republic Act No. 11223 or the Universal Health Care (UHC) Act
during the last Congress marks an era of health care system reforms. Among others, the UHC
law intends to achieve an integrated and comprehensive approach to the health system,
addressing both its demand and supply sides. It endeavors to make medicines and medical
supplies as well as quality health care services available to all Filipinos at an affordable cost.
It also puts premium on the prudent use of financial resources on programs and projects that

can help prevent, control, and cure diseases.

This bill proposes to allocate ten percent (10%) of the annual Value-Added Tax
(VAT) collections to augment the pool of funds to support the implementation of the UHC
law, specifically for the expanded immunization program and the modernization of facilities
and equipment of rural health units, and public hospitals run by local government units and
the Department of Health.


Additional funding support to expand the immunization program will help address the
risk of infant mortality, and support our goal to reduce under-five mortality rate by 67%.

Rural health units and district hospitals exercise the first line of defense against
sickness. Thus, this bill allocates VAT dividends to modernize public health facilities in
areas that need most of the funding support - the fourth to sixth-class municipalities.

It also seeks to establish regional specialty hospitals without the use of loans, but
instead earmark tax collections of government. Creation of these additional hospitals would
unburden the specialty hospitals located in the National Capital Region. It would also allow
patients who come from the provinces, and those who do not have the resources to combat
orthopedic, heart, lung, and kidney diseases, immediate and more affordable hospital services
without the need to travel long distance.

In light of the foregoing, immediate passage of this bill is,

VILMA SANTOS-RECTO



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EIGHTEENTH CONGRESS OF THE)
REPUBLIC OF THE PHILIPPINES. )
First Regular Session )

HOUSE OF REPRESENTATIVES

wn 4357

Introduced by Rep. Vilma Santos-Recto
6th District of Batangas

AN ACT
MODERNIZING HEALTHCARE AND HEALTH INFRASTRUCTURE,
PROVIDING FUNDS FROM THE ANNUAL VALUE-ADDED TAX COLLECTIONS,
AMENDING FOR THE PURPOSE THE NATIONAL INTERNAL REVENUE CODE
OF 1997, AS AMENDED

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

Section |. A new section, to be numbered two hundred eighty-seven, shall be added to
Chapter Il, Title XI of the National Internal Revenue Code, as amended to read as follows:
"SEC. 287. DISPOSITION OF PROCEEDS OF VALUE-ADDED TAX. - TEN
PERCENT (10%) OF THE VALUE-ADDED TAX COLLECTED UNDER
TITLEIV OF THIS ACT, AS AMENDED, SHALL BE ALLOCATED TO THE
FOLLOWING HEALTH EXPENDITURES IN THE FOLLOWING
PROPORTIONS:

1. TEN PERCENT (10%) SHALL BE ALLOCATED FOR THE
EXPANSION OF THE IMMUNIZATION PROGRAM, TO BE
ADMINISTERED BY THE DEPARTMENT OF HEALTH
(OH);

2. THIRTY PERCENT (30%) SHALL BE ALLOCATED FOR THE
IMPROVEMENT AND MODERNIZATION OF HEALTH
INFRASTRUCTURE AND MEDICAL EQUIPMENT OF
RURAL HEALTH UNITS: PROVIDED, THAT PRIORITY
SHALL BE GIVEN TO THOSE LOCATED IN THE FOURTH
TO SIXTH-CLASS MUNICIPALITIES: PROVIDED,
FURTHER, THAT THE ALLOCATION SHALL BE


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ADMINISTERED BY THE DOH IN CONSULTATION WITH
‘THE LOCAL GOVERNMENT UNITS (LGUs) CONCERNED;

3. TWENTY PERCENT (20%) SHALL BE ALLOCATED FOR
THE IMPROVEMENT AND MODERNIZATION OF HEALTH
INFRASTRUCTURE AND MEDICAL EQUIPMENT OF
DISTRICT AND PROVINCIAL HOSPITALS, TO BE
ADMINISTERED BY THE DOH IN CONSULTATION WITH
‘THE LGUs CONCERNED; AND

4. FORTY PERCENT (40%) SHALL BE ALLOCATED FOR THE
ESTABLISHMENT OF A SPECIALTY DEPARTMENT IN
MEDICAL CENTERS AND REGIONAL HOSPITALS, TO BE
ADMINISTERED BY THE DOH IN CONSULTATION WITH
THE LGUs CONCERNED. FOR PURPOSES OF THIS ACT, A
“SPECIALTY DEPARTMENT” IS DEFINED AS A
DEPARTMENT IN MEDICAL CENTERS AND REGIONAL
HOSPITALS THAT IS PRIMARILY OR EXCLUSIVELY
ENGAGED IN THE CARE AND TREATMENT OF ONE OF
THE FOLLOWING:

A. PATIENTS WITH A CARDIAC CONDITIO!

B. PATIENTS WITH A LUNG CONDITION;

C. PATIENTS WITH A KIDNEY CONDITION; AND

D. PATIENTS WITH AN ORTHOPEDIC
CONDITION.

Sec. 2. The succeeding Sections of the National Internal Revenue Code, as amended,
are hereby renumbered accordingly.

Sec. 3. Implementing Rules and Regulations (IRR). ~ The Department of Budget and
Management (DBM), DOH, Department of Interior and Local Government (DILG) and the
Bureau of Internal Revenue (BIR) shall within thirty (30) days after the effectivity of this Act
issue the IRR for its effective implementation.


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Sec. 4. Repealing Clause. — All laws, decrees, executive orders, rules and regulations,
or parts thereof which are inconsistent with this Act are hereby repealed, amended or
modified accordingly.

Sec. 5. Effectivity. — This Act shall take effect fifteen days (15) days following its
publication in at least two (2) newspapers of general circulation or in the Official Gazette.
Approved,