FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House Bill No, 8034

EXPLANATORY NOTE

A looming healthcare crisis is upon us. The deplorable inequities in access
by Filipinos to health care services and the abysmal state of our national health
care service delivery infrastructure is now exacerbated by the exodus of our
health care workers. Unless, critical broad-based reforms are promptly
undertaken, millions or our citizens will continue to die without being seen by a
medical professional, unable to access hospitals or afford medicines.

The country's health investment is still below the 5% of gross domestic
product prescribed by the World Health Organization. As a necessary first step in

stimulating health carte investments, the government's investment in health
needs to be improved.

Beyond clinical outcomes, the country's unfavorable mortality and
morbidity indicators are also seen as purveyors of economic productivity losses.
Government should therefore undertake a comprehensive policy reform program
that aims to:

1. ensure equitable access to health care services;

2. provide access to safe, effective and high-quality medicines; and

3. Improve basic health indicators consistent with the Millennium
Development Goals, such as decreasing maternal, child and infant
mortality rates and reducing the incidence of preventable diseases.

Moreover, comprehensive health policy reforms should address:

1. the continued prevalence of preventable (communicable, water and
vector-borne) illnesses and increasing burden of lifestyle related
diseases;

2. the inequitable distribution of health services, highlighted by the fact
that while the National Capital Region (NCR) accounts for only 13% of


the national populations, it hosts 30% of the hospital beds nationwide
and 45% of practicing physicians;
fragmentation of health services as an offshoot of devolution;

. inadequate support value from the national health insurance program,
resulting in an expensive and inefficient out-of-pocket and pay-as-you-
go health care financing scheme;

5. the deplorable physician to population ratio, which can be expected to
further deteriorate with the rising trend of a mass exodus of doctors
and nurses to foreign countries and the declining enrolment in medial
schools in the last 5 years;

6. the need to strengthen the generic industry to increase access to high
quality, safe, effective and affordable essential drugs; and

7. The increasing incidence of counterfeit and substandard medicines.

RO

Accordingly, in order to address these issues, the following steps need to
be taken:

0) reforms in fiscal measures and investments priorities to
encourage local manufacturing of pharmaceutical products;
(ii) reforms to the Intellectual Property Code which are reasonable

to stakeholders and more importantly, supportive of patient
safety and welfare and consistent with the WTO TRIPS;

(0) enforcement of the Generics Act; and

(iv) Strengthening of the Bureau of Food and Drugs.

Cognizant that health care is a shared responsibility among various
stakeholders, this Bill seeks to provide a framework for a multi-stakeholder
collaboration in the structured reform of the health care system in the Philippines
with the goal of achieving equitable and sustainable access to quality health care
services in the country.

In view of the foregoing, immediate passage of this bill is earnestly
requested.

RUFYS B. nodfovez

MAXIMO B. RODRIGUEZ, JR.


FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES,

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House Bill No,_ 3031

AN ACT

PROVIDING FOR COMPREHENSIVE HEALTH REFORM OF THE
PHILIPPINES TO INCREASE AND MAKE EQUITABLE ACCESS TO HEALTH
CARE SERVICES, CREATING A NATIONAL HEALTH POLICY COUNCIL, A
NATIONAL HEALTH AND HOSPITALS CORPORATION AND A NATIONAL
HEALTHCARE FINANCING POLICY CLUSTER, AMENDING THE
INTELLECTUAL PROPERTY CODE (REPUBLIC ACT 8293) AND OTHER
RELEVANT LAWS, SUPPLEMENTING THE NATIONAL HEALTH
INSURANCE ACT (REPUBLIC ACT 7875), THE LOCAL GOVERNMENT
CODE (REPUBLIC ACT 7160) AND OTHER RELEVANT LAWS FOR THAT
PURPOSE

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

SECTION 1. Short Title — This Act shall be known as the “Comprehensive National
Health Reform Act of 2010”.

ARTICLE I
GENERAL PROVISIONS

SECTION 2. Declaration of Principles and Policies — Section 11, Article XIII of the
1987 Constitution of the Republic of the Philippines declares that the State shall adopt an
integrated and comprehensive approach to health development which shall endeavor to
make essential goods, health and other social services available to all the people at


affordable cost. Likewise, priority for the needs of the underprivileged, sick, elderly,
disabled, women, and children shall be recognized.

SECTION 3. General Objectives. - This Act seeks to:

(a) __ unite the various elements of the national health system with a common goal
to actively promote and improve the national health system in the Philippines;

(b) provide all citizens of the Philippines with the mechanism to gain equitable
access to basic health services;

(©) create the National Health Policy Council, hereinafter referred to as the
Council;

(@) create the National Health care Financing Policy Cluster, hereinafter referred
to as the National Financing Cluster, _

(©) prioritize and accelerate the provision of health care services to all Filipinos,
especially the segment of the population that cannot afford such services;

(establish the National Healthcare and Hospitals Corporation, hereinafter
referred to as the “Hospital Corporation”; and

(g) strengthen regulatory agencies in the Philippines primarily by adding
resources, reorganizing, aligning regulations with international best practices,
including those adopted by the Association of South East Asian Nations, and
increasing penalties for any violations of the mandates thereof.

ARTICLE 0
DEFINITION OF TERMS

SECTION 4. Definition of Terms. - For the purpose of this Act; the following terms shall
be defined as follows:

(a) Council - shall refer to the National Health Policy Council as created in this Act;

(b) DOH — shall refer to the Department of Health;

(©) Essential drugs are drugs identified: by the DOH as necessary to address a
national health emergency and the classification of drugs as such shall
automatically terminate as soon as the national health emergency situation ceases
to exist.

(@) Health care professionals — shall refer to any doctor of medicine, dentist, nurse,
midwife, or other health caré professional or practitioner duly licensed to practice
in the Philippines;

(©) health establishments — shall refer to the whole or part of a public or private
institution, facility, building or place, whether for profit or not, that is operated or
designed to provide inpatient or outpatient treatment, diagnostic or therapeutic
interventions, nursing, rehabilitative, palliative, convalescent, preventative or
other health services. When appropriate, it includes mobile health service units;

(f) health services - shall refer to hospital room and services, medical supplies,
professional services of physicians and other health care professionals, and



diagnostic and laboratory tests that are necessary for the diagnosis and/or
treatment of an illness or injury;

(g) Hospital Corporation — shall refer to the National Health and Hospitals _

Corporation created under this Act;

(h) implementing agencies — shall refer to the DOH, the Hospital Corporation and
the LHBs;

(i) LGUs — shall refer to local government units as defined under Republic’ Act No. ,,

7160, as amended;

(j) LHBs — shall refer to the local health boards constituted pursuant to the
provisions of Republic Act No. 7160, as amends

(k) medical centers — shall refer to all specialty medical institutions, whether created
under special charters or not, currently under the control and supervision of the
Department of Health;

(@ National health emergency is that situation which is deemed included under
Article VI, Section 23(2) of the Constitution. Specifically, it is an occurrence of a
sudden upsurge of an illness or health condition that causes a large number of
deaths in, or poses a sudden significant risk of substantial harm to a large number
of, the Filipino population. Such situation shall be declared pursuant to the
provisions of the Constitution and the period that such national health emergency
situation is deemed to exist shall be fixed upon its declaration. Otherwise, the
national health emergency situation is deemed to cease at the same time as the
President’ power to declare such ceases.

(m)NEDA ~ shall refer to the National Economic Development Authority;

(n) other public health establishments — shall refer to public health establishments
which are neither medical centers, regional hospitals nor health establishments
that have been devolved to the LGUs pursuant to Republic Act No. 7160, as
amended. It shall include medical clinics in government-owned or controlled
corporations and hospitals or health facilities owned and managed by state
colleges and universities, by the Department of National Defense, by the
Department of Interior and Local Government, and by other goverment
agencies;

(0) patient — shall refer to a person who avails -himself of health services or is
otherwise the subject of such services;

(p) pharmaceutical drug/produets - any pharmaceutical or biological product which
requires a prescription before it may be dispensed and contains active ingredients
responsible for its desired effect intended for use in the diagnosis, cure,
mitigation, treatment or prevention of disease or to affect the structure or function
of the body &f man or animal, or substances intended for use a3 a component of
the same;

(@ pharmaceutical. company - any organization or company involved in the
manufacture, importation, repacking and/or eetnbytion of pharmaceutical
products;

(© PhilHealth — shall refer to the Philippine Health Sears Corporation

(S) primary health care services - shall consist of: (i) education concerning
prevailing health problems and the methods of preventing and controlling such
problems; (ii) promotion of food supply and proper nutrition; (iii) adequate supply



of safe water and basic sanitation; (iv) maternal and child health care including
family planning; (v) immunization against major infectious: diseases; (vi)
prevention and control of locally endemic diseases; (vii) appropriate treatment of
common diseases and injuries; (viii) provision of essential drugs; (ix) prevention
and control of leading non-communicable diseases arising from environmental
and occupatiofal health hazards; (x) promotion of dental health; and (xii) health
care of the elderly and the disabled;

() private health establishments — shall refer to health establishments that are
‘owned or controlled by private, natural or juridical persons;

(v) public health establishments — shall refer to health establishments that are
owned or controlled by LGUs or the national government or any of its agencies
and instrumentalities including government owned or controlled corporations;

(¥) public health services — shall refer to health services provided by public health
establishments:

(w)regional hospitals ~ shall refer to all hospitals, other than medical centers, which
are under the control and supervision of the DOH;

ARTICLE il
THE NATIONAL HEALTH POLICY COUNCIL

SECTION 5. Creation and Nature. — There is hereby created the National Health Policy
Council, which shall be an independent body and which will primarily formulate health
policies and the country’s medium-term health sector development program to address
the health needs of Filipinos. It shall be responsible for driving the health reform agenda
and programs that it may set. Henceforth, all health-related programs of the government
shall be consistent with the policies and programs that will be formulated by the Council
pursuant to the provisions of this Act. ~

SECTION 6. Composition of the Council. — The Council shall be composed of the
Secretary of the DOH as ex-officio Chairman and the Director General of the NEDA as
Co-Chairman. The members of the Council shall be as follows:

(@) President of PhilHealth

(b) Health Committee Chairmen of both Houses of the Philippine Congress

(©) President of the League of Governors

(@) President of the League of Mayors

(©) A representative from each of the following shall likewise be part of the
Council and shall be nominated by an organized association of the sector
which they represent:

medical doctors 4

nurses

hospital owners and administrators

pharmacists

deans of medical schools

Rene


deans of nursing schools

private health insurance companies
research-based pharmaceutical companies
local and generic pharmaceutical companies
(0. representatives from 2 patient groups

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The above members shall not receive any compensation for the services that they will

render for the Council except for the prevailing reasonable per diems given to those
assigned to sit in similar government panels.

SECTION 7. Powers and Functions. — The Council shall have the following powers

and functions:

(a) to formulate and promulgate policies to be implemented by the relevant
health-related goverriment agencies. The policies will protect, promote and
improve the health of Filipinos on the following =

1.

2:
3

5:

10.

targets, priorities, norms and standards relating to the equitable
provision and financing of health services;

efficient coordination of health services;

human resources planning, production, management and
development, for the purpose of, but not limited to, mitigating
the exodus of healthcare workers;

. development, procurement and use of health technologies;

investments to improve hospital facilities;

. quality assurance pre-requisites related to accreditation and

licensing of hospitals, pharmaceutical companies, drugstores,
etc.;

- quality assurance frerajuisies related to. registration” and

monitoring of pharmaceutical products;

equitable and appropriate financial meghanisms for the funding *

of health services;

usage of financial and other assistarice received from foreign
governments and non-governmental organizations;

mianagemént of health and health-care service at the local
government level;

(b) to formilate, update, or modify the country’s medium-term health sector
development program;

(©) to create a

Drug Access Program for the implementation of the National

‘Health and Hospitals Corporation that will be created pursuant to Article V of
this Act and other health facilities that the Council-may jdentify as partners;

(® pursuant to

the power of the President under the Constitution to declare a

national health emergency and pass measures to address the same, the Council
shall have the sole power to formulate measures and program that will ensure


access to essential drugs in cases where such national health emergency is
declared. :

(e) to receive and manage grants, donations and other forms of assistance for the
sole purpose of carrying out its policy-making mandate under this Act;
Provided that, the same shall be subject to the rules that the Council may
promulgate relating to terms and conditions of its acceptance; and Provided
‘further, that the decision to accept such grants or donations and the manner of
spending the same shall be subject to the decision making procedure of the
Council as described in Section 8 hereof and the source of the same should be
fully disclosed to the Council for its careful consideration;

(to call official meetings and public hearings, among various stakeholders,
other than those represented already in the Council, for assistance in the
policy-making function;

(g) to create the National Healthcare Financing Policy Cluster, more particularly
described in Article IH, Section 9 hereof, giving it powers and duties to
formulate and develop a health-care financing agenda to'sustain the programs
that will be set by the Council;

(h) to work with Local Health Boards, if necessary, to assist in creating specific
policies that will ensure delivery of health services at an identified locality;

(i) to call on various stakeholders in the health sector for additional assistance in
the form of technical expertise or other resources for the effective
implementation of health policies and programs; and

@ to perform such other acts that it may deem appropriate for the attainment of
the stated objectives of the Council and for the proper enforcement of the
provisions of this Act.

SECTION 8. Operation and Administration. - The Council shall act as a collegial body
and shall reach its decision by 2/3 vote of the entire membership. The members thereof
shall attend in person and are not allowéd to be represented during the meetings. It shall
convene its first meeting within sixty (60) days of the passage of this Act and it shall
have the right to determine procedures to be observed during its meetings.

SECTION 9. Powers and Functions of the National Healthcare, Financing Policy
Cluster. The Natiénal Healthcare Financing Policy Cluster, created pursuant to Article
ILI, Section [7]{e] of this Act and hereinafter referred to as “National Financing Cluster,”
shall formulate, implement and enforce health funding and financing objectives and
policies pursuant to the mandate and programs of the Council with a view to ensuring
equitable access to"health care services through targeted financing programs, and to
ensure the viability of health establishments that provide health services to identified
priority groups.

Specifically, the National Financing Cluster shall exercise the following powers and
functions:

(@) formulate @ national health financing agenda and other health
policies and programs to ensure adequate national, local,


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government and household investment in health and effective
allocation of financial resources to various types of public and
health services;
formulate, implement and enforce financial health policies and
programs to ensure the viability, institutionalization, expansion and
optimal operation of health establishments, in coordination with
the Hospital Corporation, PhilHealth, and the LGUs;
working with PhilHealth, formulate financing programs and
policies to expand the program benefits and coverage, the,
PhilHealth membership base, and the optimal utilization of
PhilHealth’s Reserve Fund (as defined in Republic Act No. 7875),
to finance operations and improvements in health care institutions;
make periodic assessments of prevailing health care financing
systems and submit reports with appropriate recommendations to’
the Council;
conduct consultative meetings among the relevant’ sectors and,
stakeholders, including _ international organizations,
intergovernmental bodies and regulatory authorities with”
significant experience in health care financing for the purpose of -
getting expert advice, technical information, assistance and
guidelines on health care policies and programs; and
perform such other acts as the Council may direct.

SECTION 10. Composition. The National Financing Cluster shall be composed of the
“following members:

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the President of the Philhealth as ex officio Chair;

Secretary of the Health ot his ec who shall be at least
an Assistant Secretary;

the Director General of the NEDA or his. representative who
should at least be a Deputy Director General;

the representative from’ the private insurance companies in the
Council; and

one (1) of the representatives of the patient groups in the Council.

ARTICLE IV
PUBLIC HEALTH EDUCATION PROGRAM
ON DISEASE PREVENTION*

SECTION 11. Prevention of Common Diseases through Education. - In recognition
that the most common diseases and causes of morbidity and mortality are preventable by


" observing proper health and sanitation practices, the Council shall increase awareness
thereof through effective health education at all levels throughout the country.

SECTION 12. Preventive Health Education Curriculum and Verification of Data by the
Department of Health. - In this regard, the Council shall undertake the following:

(a) cause the development and/or updating of modules on basic preventive health
care that refocuses current health curricula from curative to preventive therapy in
relation to the top causes of morbidity and mortality in the Philippines, in
coordination with the Department of Education, Commission on’ Higher
Education and relevant private sector organizations; and

(b) ensure integration of these modules into the curricula and determine the modules
appropriate for each level in all private and public elementary schools, high
schools, colleges and universities in the country, in coordination with the
Department of Education and the Commission on Higher Education

The: Secretary of the DOH shall certify that the DOH has verified the validity and
accuracy of all scientific data to be used in the modules including the content of the -
modules about the diseases and their prevention.

SECTION 13. Modules for Collegiate and Postgraduate Healthcare Professionals. ~"
Specific modules on the following topics, among others, shall be developed by the
Council in coordination with the Department of Education, Commission on Higher

Education, and other relevant organizations in the private sector for use in colleges,
universities and postgraduate programs: :

(a) Preventive, Public and Community Health;

(b) Management and Leadership concepts to emphasize health care;

(©) Professional and Community Leadership, Ethics and Satie and
(@) Health Economics.

‘The modules created for these levels shall instill love of country and develop a sense of
social responsibility among students in colleges and universities and among health
professionals:

SECTION 14. Time Devoted to Modules and Integration. - In the case of elementary
and high schools, thie Department of Education shall determine the appropriate number of

‘hours to be devoted to the foregoing modules and how to integrate them into the
curricula.

In the case of colleges, universities and postgraduate prograths, the determination of the
foregoing items in this section shall be the responsibility of the Commission on Higher
Education.


SECTION 15. Initial Modules on Top Ten Common Diseases as Identified by the DOH
and Pilot Areas - The Council, together with the Department of Education and the:
Commission on Higher Education, may identify pilot areas within the first year in order,
to enhance the modules prior to nationwide implementation at the beginning of the
following year.

SECTION 16. Acceptance of Assistance - The Council and other participating agencies
in this article may receive donations in cash or in kind from third parties in order to
implement or to promote the foregoing educational programs and shall be subject to the
requirements set forth in Section 7(e) hereof.

ARTICLE V
THE NATIONAL HEALTH
AND HOSPITALS CORPORATION

SECTION 17. Creation of the National Health and Hospitals Corporation. -
Recognizing the fiscal and operational constraints faced by the DOH in the management
of its retained health establishments, there is hereby established a National Health and *
Hospitals Corporation, hereafter the Hospital Corporation, which shall be attached to the
Council for policy direction and coordination.

The Hospital Corporation shall have supervision and control over all existing medical
centers, regional hospitals and such other hospitals currently under the control and
supervision of the DOH. All existing medical centers shall continue to be governed by
their existing special charters to the extent that such charters do not conflict with this Act.
‘The Hospital Corporation shall act as the primary provider of public health services and
shall provide, through its public health establishments, preventive and curative health
services as well as primary health services and specialized and advanced health services

SECTION 18. Purposes and Functions. ~The purposes and functions of the Hospital
Corporation are as follows:

(a) to formulate, develop and implement an integrated and comprehensive *
health services delivery system with respect to the public health
establishments under its jurisdiction;

(b) to formulate policies and implement rules and regulations for its public
health establishments concerning any matter that will protect, promote, «
improve and maintain the health of the population, including (j) targets,
priorities, norms and standards relating to the equitable provision and
financing of health services; (ii) efficient coordination of health services; *
(iii) human resources planning, production, mafiagement and development; **
and (iv) development, procurement and use of health technologies;

(©) to determine the range of health services that may be provided at its public
health establishments;


(@)_ to set and issue guidelines for the management and operation of its public

health establishments;

(©) to prescribe the procedures and criteria for admission to and referral from its
public health establishments;

(to maintain and operate specialty medical institutions through its medical
centers;

(g) to undertake continuing medical education programs subject to existing
policies and requirements of the Commission on Higher Education;

(h) to train health care professionals for the purpose of implementing its
programs and fulfilling its purposes;

(@ to develop, strengthen and enhance the capabilities and skills for
specialized, effective and efficient provision of health services to all
regional hospitals and medical centers under it8 jurisdiction;

() to formulate and implement its own procurement policies and procedures;

(k) to design and implement programs to provide for effective referral of
patients between health establishments within its jurisdiction;

(to strive to meet health-care quality standards, at a minimum licensing
standard, for health establishments under its jurisdiction;

(m) working with the LHBs, recommend to the Council mechanisms to enable
and. coordinate relationship between public and private health
establishments in the delivery of health services;

(n) to receive and accept grants, donations, and financial and other assistance
from any person, natural or juridical, foreign governments and
intergovernmental and nongovernmental organizations; and

(0) subject to the other provisions of this Act, to prescribe a schedule of fees
and charges for (i) different categories of patients; (ji) various forms of
treatment; and (jii) various categories of its public health establishments.

SECTION 19. Powers of the Corporation. - The Hospital Corporation shall have the
power of a corporation, the powers set forth in this Act and such other powers as may be
granted to it by other laws. .
SECTION 20. The Board of Trustees. - The government of the Hospital Corporation.
shall be vested in the Board of Trustees. It shall be the highest decision-making body of
the Hospital Corporation. The administration of the Corporation and the exercise of its
powers and functions are vested in the Board of Trustees as well as in the President of the
Hospital Corporation and such other officers as may be appointed ‘by the Board of
Trustees.

SECTION 21. Composition of the Board of Trustees. — The Board of Trustees shall be.
composed of the Director for National Center For Health Facilities Development as ex-
officio chairman; the President of the Hospital Corporation, as-ppointed by the Council;
two (2) members representing the medical and allied medical profession to be designated
by a representative Council from the sector, provided that no person representing the
medical and allied medical profession shall be appointed unless he shall have extensive



experience and training in hospital administration and proven managerial capability in
running tertiary level hospital; and one (1) representative of a patient group.

Except for reasonable per diem; the members of the Board of Trustees shall not receive
any compensation arising out of or in connection with their appointment to the Board.

SECTION 22. Powers of the Board of Trustees. — The Board of Trustees shall have the
following powers and duties in addition to its general powers of administration:

(@) to receive and appropriate to the ends specified by law and by this Act
such sums as may be provided by law for the support of the Hospital
Corporation;

(b) to approve the annual budgetary allocations for the operation and
maintenance of its public health establishments, including the
determination of the portion of its revenue which may be used to increase
the salaries of its health care professionals and for its capital outlay; .

(c) to provide for the establishment of additional public health establishments *

as it may deem necessary;

(d) to appoint, on recommendation of the President of the Hospital
Corporation, health care professionals; to fix their compensation, hours of
service, and such other terms and conditions as it may deem proper and
consistent with civil service laws, rules and regulations;

(©) toestablish fund raising programs to supplement the funds appropriated by
the national government;

(to prescribe the rules for its government and for the maintenance and
operation of its public health establishments im accordance with this Act;

(g) to appoint such officers as it may deem necessary for the government of
the Hospital Corporation and its public health:establishments;

(h) to enact such rules and regulations as are consistent with the purposes and
functions of the Hospital Corporation;

(i) to determine the amount of compensation of its officers, and of the
President of the Hospital Corporation;

G) to exercise such other purposes as may be necessary for the proper
discharge of its functions and for the attainment of the purposes of the
Hospital Corporation.

SECTION 23. The Chairman. ~ The Chairman of the Board of Trustees shall preside
cover all its meetings. In his absence, the following shall act as the Chairman in the order
herein stated: the President of the Hospital Corporation, then the other members of the
Board of Trustees in the order of seniority of their appointment.

SECTION 24. Meetings; Quorum. - Regular meetings of th Board of Trustees shall be
held once every three months. Special meetings may be held as often and whenever
necessary as may be called by the Chairman or by the President of the Hospital
Corporation. A quorum of the Board of Trustees shall consist of a majority of all the
members holding office at the time the meeting of the Board of Trustees is called.


SECTION 25. Annual Report. On or before the first Friday following the opening of
he regular session of Congress, the Board of Trustees shall submit to the Council and to
the health-care committees of the Philippine Congress a detailed report setting forth the
progress, conditions and needs of the Hospital Corporation and of its public health
establishments.

SECTION 26. . The President of the Hospital Corporation. ~ The leadership and
executive functions of the Hospital Corporation shall be vested in the President who shall
be appointed by the Council. The procedure for the appointment of the Hospital
Corporation shall be set by the Council.

SECTION 27. Term and Qualifications of the President. ~ The President of the Hospital
Corporation shall serve for a term of six (6) years without prejudice to only one
reappointment to the same position. In the case of vacancy of the office of the President
of the Hospital Corporation before the lapse of the term of the incumbent, the person
appointed to fill the vacancy shall serve only for the unexpired portion of the said term.
No person shall be appointed President of the Hospital Corporation unless he shall have
an extensive experience and training in Hospital Administration and proven managerial
capability in running tertiary level hospital for at least five (5) years.

SECTION 28. Powers of the President. — The President of the Hospital Corporation
shall have the following powers and functions:

(a) to exercise general supervision over the day to day éperations of the Hospital
Corporation and of its public health establishments;
(b) to carry out the policies laid down by the Board of Trustees;

(c) to coordinate the activities of the various public health establishments of the

Hospital Corporation;

(4) to prepare an annual report to the Board of Trustees on the work of the past
year and the needs of the current year;

(e) to prepare and present to the Board of Trustees the annual budget of the
Hospital Corporation with estimates of income and expenditures;

(® to execiite and sign on behalf of the Hospital Corporation all contracts, deeds
and other instruments necessary for the proper conduct of the business of the
Hospital Corporation; and

(g) to exercise such other powers as may be delegated to him by the Board of
Trustees.

SECTION 29. Fiscal Autonomy; Audit. ~ The Hospital Corporation shall endeavor to
achieve financial viability through fiscal autonomy. All income, receipts, fees and
charges accruing to or derived by the Hospital Corporation‘ from the operation of its
public health establishments shall, upon their collection, be automatically released to the
Hospital Corporation. All appropriations for the Hospital Corporation shall be paid to it
in lump sum. All accounts and expenses of the Hospital CorporStion shall be audited by
the Commission on Audit.


SECTION 30. Initial Budget. - Such sum as may be necessary for the implementation’
of the provisions of this Act dealing with the creation and organization of the Hospital
Corporation is hereby authorized to be appropriated out of the National Treasury. The,
National Financing Cluster shall, as it deems necessary, include subsidy. for the Hospital
Corporation in the health care financial plan it submits for consideration in the Annual '”
General Appropriations Act.

ARTICLE VI
HEALTH HUMAN RESOURCE DEVELOPMENT. -

SECTION 31. Ensuring adequate supply of quality health human resource. To ensure
adequate supply of quality health human resource personnel in the country, the Council
shall be tasked with formulating and implementing strategies and programs to train,

“recruit and deploy health care personnel. The Council, working with the LHBs, shall
formulate policies and mechanisms to address issues regarding human resources in the
health services sector in order to:

(a) ensure that adequate resources are available for the education and training of
health care professionals to meet the human resources requirements of the
country;

(b) in coordination with the Commission on Higher Education and the
Professional Regulation Commission, ensure the education and training of!
health care professionals to meet the requirements of the country’s health
system;

(©) identify shortages of key skills, expertise and competencies in the country’s
health system and prescribe strategies for (i) the recruitment of health care
professionals and (ji) the education and training of health care professionals in
the country;

(2) prescribe strategies for the recruitment and retention of health care
professionals within the country;

(©) formulate policies to provide incentives to health care professionals to
encourage them to stay and render services in the country;

(®) ensure the existence of adequate human resources planning, development and
management structure at the national and local levels of the health sector; and

(g) ensure the availability of institutional capacity at the national and local levels
to plan for, develop and manage human resources.

SECTION 32. National Health Manpower Emergency. The current migration of nurses
and doctors to countries offering better opportunities have created a national crisis that
now endangers the delivery of quality health care to Filipino patients. Until the Council
subsequently certifies that the health human resource crisis is over, there shall be
mandatory one year field service for newly certified medical doctors and nurses in:

ies within the National Health and Hospitals Corporation; or



(b) other health facilities authorized and duly certified by the National Health
Policy Council as appropriate facility for field service.

ARTICLE VI
PATIENT SAFETY & REGULATORY REFORM

SECTION 33. General Framework. — This Article seeks to:

(a) ensure and promote the right of the Filipino people to readily available, safe,
effective and high quality pharmaceutical products, medical devices, health
facilities, and health environment; and

(b) advance and maintain an effective regulatory system with appropriate manpower
and research capability, responsive to the country’s health needs and problems.
Pursuant to this policy, the State must enhance its regulatory ;capacity and
strengthen its capability with regard to the licensing, registration, monitoring, and
accreditation of drugs, medical products, medical devices, and healthcare
facilities.

SECTION 34. Manpower Development. — The regulatory agencies under the DOH,
namely, the Bureau of Food and Drugs, the Bureau of Health Facilities and Services, and
the Bureau of Health Devices and Technology shall develop and maintain sufficient,
competent and suitable manpower that is responsive to the demands of the health care
industry and the public. In this regard, there shall be an appropriate adjustment in the
number of employees of the identified regulatory agencies in proportion to the amount of
work output required, especially in, but not limited to, the following areas:

(a) Administrative and clerical support in the processing of licensing,
registration, and accreditation requirements;

(b) Scientific and technical personnel specially trained to evaluate technical,
scientific, and clinical data for licensing, registration, and accreditation, as
well as for monitoring purposes; and

(©) Regulatory officers tasked to monitor compliance.

SECTION 35. Regulatory Officers. — In order to secure an adequate number of
regulatory officers and to increase their effectiveness in monitoring compliance of drugs,
medical products, medical devices, and health facilities in the market, the regulatory
agencies under the DOH shall ensure that all regulatory officers receive appropriate
training, retraining, and timely updates on current development relevant to their duties in
order to make them effective and efficient in their monitoring operations.

SECTION 36. Regulatory Field Offices. - The regulatory agencies of the DOH shall
establish and/or develop field offices in all provinces or cities to effectively implement
their regulatory functions. Appropriate manpower shall be provided to support the field


offices of the regulatory agencies, subject to the appropriate rules and regulations of the
‘Civil Service Commission.

SECTION 37. Testing Capabilities. ~The regulatory agencies of the DOH are hereby
mandated to develop, improve, upgrade and widen their capability to evaluate technical,
scientific and clinical data, and test, assay, examine, and inspect drugs, medical products,
medical devises; and healthcare facilities applying for registration,’ licensing and
accreditation, as well as monitor compliance.

For the putpose of achieving the’above mandate, the regulatory agencies of the DOH
shall establish at least one (1) testing, assay, examination, or inspection facility each for
Luzon, Visayas and Mindanao. Every testing, assay, examination, or inspection facility
shall have all the necessary and appropriate state-of-the-art equipment and qualified
personnel complement. These regulatory agencies’ may accredit private entities and
academic and other appropriate institutions in order to meet this requirement or to
increase the number of testing, assay, examination, or inspection facilities in the
appropriate local government unit.

However, regardless of the number of testing, assay, examination, or inspection facilities,
licensing, registration and accreditation of all drugs, medical products, medical devices,
and healthcare facilities shall continue to be centralized in the central office of the
regulatory agency.

SECTION 38, Harmonization with International Guidelines. - The regulatory agencies
of the DOH shall adopt internationally accepted standards for conducting tests, assays,
examinations, and inspections and apply the same uniformly for all pharmaceutical
products sought to be marketed in the Philippines, such as the, ASEAN Common -
Technical Document, ASEAN Guidelines on the Conduct of Bio-availability and Bio-
equivalence Studies and other similar standards.

Based on its adopted international standard, the regulatory agencies of the DOH shall
develop and/or accredit additional qualified institutions to.conduct testing, assay,
examination, and inspection services,

SECTION 39. Regulatory Enforcement. ~ The regulatory agencies of the DOH shall
establish a Drug Enforcement Unit (DEU) which will be composed of not less than ten
(10) qualified and adequately trained personnel in every region who will be directly
under the supervision of the appropriate regulatory officers of the regulatory agencies.
Their authority and functions shall be strictly limited to the implementation of the
agency’s regulatory functions.

x

In the event of possible résistance, in addition to the DEU, the regulitory officer involved
may deputize and/or call on law enforcement officers and agents to assist in
implementing lawful orders or actions of the regulatory agencies. The Philippine National
Police or the appropriate law enforcement agency shall immediately respond to any call
or request for assistance from the regulatory officer.


SECTION 40. Recognition of the threat of Counterfeit Drugs. In recognition of the
findings of the World Health Organization International Conference on Combating
Counterfeit Medicines contained in the Declaration of Rome dated 18 February 2006, the
DOH and the appropriate regulatory agencies under it are mandated to further. their
efforts in combating the proliferation of counterfeit drugs in the country by coordinating
closely with law enforcement agencies, promoting inter-sectoral cooperation, creating
awareness about the severity of the problem among all stakeholders: and the public,
developing technical competence and skills in the relevant areas, and ensuring vigilance
and input from healthcare professionals, pharmaceutical manufacturers and the public.

SECTION 41. Automation and Information Security. The regulatory agencies of the
DOH shall undertake, develop and pursue a comprehensive computerization program that
will allow for the retention of all relevant information in a highly secure digital format
that is uniform and accessible by authorized and proper persons anywhere in the country.

The goal of the comprehensive computerization program is to, eventually, allow for all
filings and submissions for registration, licensing and accreditation to be made in digital
format, promoting efficiency in the delivery of services as well as of safe, high quality
and effective health care.

The concerned regulatory agency shall ensure that information contained by any system
used for the retention of information will remain strictly confidential, and secure access
thereto shall be a made a primary concern.

SECTION 42. Reorganization. The regulatory agenci¢s of the DOH shall, as necessary,
reorganize their operations to improve service delivery to individuals and entities
applying for registration, licensing and accreditation.

SECTION 43. Fee Adjustment. The regulatory agencies of the DOH shall conduct
comparative studies of regulatory agencies in the food and drug’ sector of other ASEAN
countries in order to make the appropriate adjustments in fees. Such adjustment may be
done on an annual. basis but any adjustment, whether an increase or decrease in fees;
should in no case“be more than 5% of the figure being adjusted. . The purpose of the
adjustments is to obtain the necessary funds to carry out the reforms containéd in this
Article and for the efficient operations of the regulatory agencies.

SECTION 44. Work Program. — The Council shall prepare the necessary work
programs to cover the staggered implementation of these regulatory reforms over a period
not exceeding five (5) years.

SECTION 45. Appropriations, Income Retention, ands Self-sufficiency. - The
appropriations for the regulatory agencies of the DOH under the current General
‘Appropriations Act shall be used to carry out the initial implementation of the provisions
of this Article. Thereafter, such sums as may be necessary for its staggered


implementation in accordance with the work programs developed by the Council shall be
included separately in the annual General Appropriations Act.

In order to supplement the allocation from the General Appropriations Act and in order to
effect the reforms contained herein, the regulatory agencies shall be authorized to retain,
without need of a separate approval from any government agency, and subject only to the
existing accounting and auditing rules, all of its receipts derived from registration and
licensing fees, sale of publications and services, assessments, fines, penalties and other
charges. Usage of the funds in this special account shall be made in accordance with the
work plan of the Council and like all other public funds, shall be subject to audit.

After five (5) years, the Council shall determine whether or not the retained earnings of
the regulatory agency involved is, and will be, sufficient to cover all of its operations and
development plans, in which event, the Council shall recommend that the regulatory
agency cease to receive fund allocations from the General Appropriations Act.

However, at any time, the regulatory agency may receive grants, donations and
endowments from various sources, domestic or foreign, for purposes related to their

functions, which the regulatory agency may, likewise, retain without need of any further
approval.

ARTICLE VU
IMPROVING ACCESS TO AFFORDABLE AND.
HIGH QUALITY MEDICINES

SECTION 46, General Framework - This title supplements Republic Act No.
6675, otherwise known as the “Generics Act of 1988,” which enhances patients’ access
to safe, effective, high quality and affordable generic medicines as an alternative. The
Council is thereby mandated to likewise formulate policies to ensure enforcement of the
Generics Act as well as the provisions under this Article.

SECTION 47. Allowing Early Registration of Generic Products. - ‘To allow
immediate entry of generic products in the Philippine market, Section 72 of Republic Act
No. 8293, otherwise known as the “Intellectual Property Code of the Philippines” is
hereby amended to read as follows:

“Sec. 72. Limitations of Patent Rights. - The owner of a patent has no
tight to prevent third parties from performing, without his authorization,
the acts referred to in Section 71 hereof in the following circumstances:

4

72.1. Using a patented product which has been put on the market
in the Philippines by the owner of the product, or with his expressed
consent, insofar as such use is performed after that product has been so put
on the said market;


72.2. Where the act is done privately and on a non-commercial
seale or for a non-commercial purpose: Provided, that it does not
significantly prejudice the economic interests of the owner of the patent;

72.3. Where the act consists of making or using exclusively for
EXPERIMENTAL USE OF THE INVENTION FOR SCIENTIFIC
PURPOSES

72.4. WHERE THE ACT INCLUDES TESTING, USING,
MAKING OR SELLING THE INVENTION, SOLELY FOR PURPOSES
REASONABLY RELATED TO THE DEVELOPMENT AND
SUBMISSION OF INFORMATION OR MATERIALS REQUIRED
UNDER ANY LAW OF THE PHILIPPINES THAT REGULATES THE
MANUFACTURE, CONSTRUCTION, USE OR SALE OF» ANY
PRODUCT; PROVIDED, THAT SUCH INFORMATION SHALL NOT
BE OFFERED FOR SALE OR SOLD WITHIN OR WITHOUT THE
PHILIPPINES; PROVIDED FURTHER THAT SUCH ACT MAY ONLY
BE DONE NOT MORE THAN TWO YEARS PRIOR TO THE
EXPIRATION OF THE PATENT.

72.5. Where the act consists of the preparation for individual cases,
in a pharmacy or by a medical professional, of a medicine in accordance
with a medical prescription or acts concerning the medicine so prepared;

72.6. . Where the invention is used in any ship, vessel, aircraft, or
land vehicle of any other country entering the territory of the Philippines
temporarily or accidentally: Provided, That, such invention is used
exclusively for the needs of the ship, vessel, aircraft, or land vehicle and
not used for the manufacturing of anything to be sold within the
Philippines. (Secs. 38 and 39, R.A. No. 1652)”

SECTION 48. Reducing Cost of Importation of Medicines. To reduce the cost of the
importation of pharmaceutical products into the Philippines, thereby reducing its price to
Filipino patients, Section 105 of Presidential Decree No. 1464; otherwise known as the
“Tariff and Customs Code of the Philippines”, as amended, is hereby amended to read as
follows:

“Sec. 105. Conditionally Free Importations: — The following articles shall
be exempt from the payment of import duties upon compliance with the
formalities prescribed in, or with the regulations which shall be
promulgated by the Commissioner of Customs with the approval of the
department head:

a. Animals and plants for scientific, experimental, propagation,
botanical, breeding, zoological and national defense -purposes: Provided,
That no live trees, shoots, plants and moss, and bulbs, tubers and seeds for
propagation purposes may be imported under this section, except by order
of the Government of the Philippines or other duly authorized institutions:
Provided, further, That the free entry of animals for breeding purposes


shall be restricted to animals of a recognized breed, duly registered in the
book of record established for that breed: And Provided, finally, That
cettificate of such record, and pedigree of such animal duly authenticated
by the proper custodian of such book of record, shall be produced and
submitted to the Collector of Customs, together with an affidavit of the
owner or importer confirming that such animal is the identical animal
described in said certificate of record and pedigree.

b. Aquatic products (e.g., fish, crustaceans, mollusks, marine
animals, seaweed, fish oil, roe), including preparations or manufactures
thereof, caught or gathered by vessels of Philippine registry: Provided,
That they are imported in such vessels or in crafts attached thereto: And
Provided, further, That they have not been landed in any foreign territory
or, if so landed, they have been landed solely for transshipment without
having been advanced in condition.

c. Samples of the kind, in such quantity and of such dimensions or
construction as to render them impossible to sell or of no appreciable
commercial value, models not adapted for practical use and samples of
medicine properly marked physicians’ samples not for sale".
Commercial samples, except those that are not readily and easily
identifiable (c.g,, precious and semi-precious stones, cut or uncut, and
jewelry set with precious or semi-precious stones), the value of any single
importation of which does not exceed ten thousand pesos, upon the giving
of a bond in an amount equal to one and on¢-half times the ascertained
duties, taxes and other charges thereon, conditioned for the exportation of
said samples within six months from the date of the acceptance of the
import entry, or in default thereof, the payment of the corresponding
duties, taxes and other charges. If the value of any single consignment of
such commercial samples exceeds ten thousand pesos, the importer thereof
may select any portion of same’ not exceeding in value ten thousand pesos
for entry under the provisions of this subsection, and the excess of the
consignment may be entered in bond, or for consumptidn, as the importer
may elect.

d. Articles, including binnacles, propellers, and the like, the
character of which, as imported, prevents their use for other purposes than
the construction, equipment, or repair of vessels and aircraft, and life-
preservers and life buoys, related equipment and parts and accessories
thereof, which are necessary for the take-off and landing and for the safe
navigation éf vessels and aircraft.

e. Equipment for use in the salvage of vessels or aircraft, upon
identification and the giving of a bond in an amount equal to one and one-
half times the ascertained duties, taxes and other charges thereon,
conditioned for the exportation thereof or payment of the corresponding
duties, taxes and other charges within six months from the date of
acceptance of the import entry: Provided, That the Collector of Customs
may extend the time for exportation or payment of duties, taxes and other


charges for a term not exceeding six months from the expiration of the
original period.

£. Cost of repairs made in foreign countries upon vessels or aircraft
documented, registered or licensed in the Philippines, upon satisfactory
proof to the Collector of Customs (1) that adequate facilities for such
repairs are not afforded in the Philippines, or (2) that such vessels or
aircraft, while in the regular course of her voyage or flight was compelled
by stress of weather or other casualty to put into a foreign port to make
such repairs in order to secure the safety, seaworthiness or airworthiness
of the vessel or aircraft and to enable her to reach her port of destination.

g. Articles brought into the Philippines for repair, processing or
reconditioning to be re-exported upon completion of the repair, processing
or reconditioning: Provided, That the Collector of Customs may, in his
discretion, require the giving of a bond in an amount equal to one and one-
half times the ascertained duties, taxes and other charges thereon,
conditioned for the exportation thereof or payment of the corresponding
duties, taxes and other charges within six months from the date. of
acceptance of the import entry.

h. Medals, badges, cups and other small articles bestowed as
trophies or prizes, or those received or accepted as honorary distinctions.

i, Wearing apparel and household effects, including those articles
provided for under subsections "j" and "k", and belonging to residents of
the Philippines returning from abroad, which’ were exported from the
Philippines by such returning residents upon their departure therefrom or
during their absence abroad, upon the identity of such articles being
establishéd to the satisfaction of the Collector of Customs; personal and
household effects brought into the Philippines by returning residents, the
export value of which does not exceed five hundred pesos, solely for
personal or household use but not imported for the account of any other
person nor intended for barter, sale or hire: Provided, That such returning
residents have not received the benefit of any exemption hereunder within
one hundred and eighty days from and after the date of the last exemption
granted: And Provided, further, That in the event the total export value of
the imported article or articles exceeds the amount of five hundred pesos,
such article or articles shall be subject to duty only on thé amount in
excess of five hundred pesos; articles of the same kind and class purchased
in foreign countries by residents of the Philippines during their absence
abroad and- accompanying them upon their return to the Philippines, or
arriving within a reasonable time which in no case shall exceed ninety (90)
days before or after the owner's return, upon ;proof satisfactory to the
Collector of Customs that same have been in their use abroad for more
than one year; articles in any single shipment consigned to any single
person when the total export value of such shipment does not exceed one
hundred pesos: Provided, finally, That when the export value exceeds the
amount of one hundred pesos, only the amount in excess of one hundred:
pesos shall be subject to duty.


j. Wearing apparel, articles of personal adornment, toilet articles,
portable tolls and instruments, theatrical costumes, and similar personal
effects, accompanying travelers or tourists in their baggage or arriving
within a reasonable time, in the discretion of the Collector of Customs,
before or after the owners, in use of and necessary and appropriate for the
‘wear or use of such persons according to their profession or position for
the immediate purposes of their journey and their present comfort and
convenience: Provided, That this exemption'shall not be held to apply to
articles intended for other persons or for barter, sale or hire: Provided,
further, That the Collector of Customs may; in his discretion, require a
bond in an amount equal to one and one-half times the ascertained duties,
taxes and other charges upon articles classified under this subsection,
conditioned for the exportation thereof or payment of the corresponding
duties, taxes and other charges, within six months from the date of
acceptance of the import entry: And Provided, finally, That the Collector
of Customs may extend the time for exportation or payment of duties,
taxes and other charges for a term not exceeding six months from the
expiration of the original period. uf

k. Vehicles, horses, harness, bed and table linen, table service,
furniture, musical instruments and personal effects of like character,
owned and imported by travelers or tourists for their convenience and
comfort, upon identification and the giving of a bond in an amount equal
to one and one-half times the ascertained duties, taxes and other charges
thereon, conditioned for the exportation thereof or payment of the
corresponding duties, taxes and other charges within six months from the
date of acceptance of the import entry: Provided, That the Collector of
Customs may extend the time for exportation or payment of duties, taxes
and other charges for a term not exceeding six months from the expiration
of the original period. =

1. Professional instruments and implements, tools of trade,
occupation or employment, wearing apparel, doméstic animals, and
personal and household effects, including those of the kind and class
Provided for under subsections "j" and "k" and belonging to persons
coming to settle in the Philippines, in quantities and of the class suitable to
the profession, rank or position of the person importing them, for their
own use and not for barter or sale, aecompanying such persons, or arriving
within a reasonable time, in the discretion of the Collector of Customs,
before or afier the arrival of their owners, upon the production of evidence
satisfactory to the Collector of Customs that such persons are actually
coming to settle in the Philippines, that the articles are brought from their
former place of abode, that change of residence is bona fide, and that the
privilege of free entry under this subsection has never been previously
granted to them: Provided, That neither merchandise of. any kind, nor
machinery or other articles for use in manufacture, shall be classified
under this subsection.



m. Animals, vehicles, portable theaters, circus and theatrical
equipment, including musical instruments, sceneries, panoramas,
properties, saddlery, wax figures and similar objects for public
entertainment, and other articles for display in public expositions, or for
exhibition or competition for prizes, and devices for projecting pictures
and parts and appurtenances therefor, upon identification and the giving of
a bond in an amount equal to one and one-half times the ascertained
duties, taxes and other charges thereon, conditioned for exportation
thereof or payment of the corresponding duties, taxes and other charges
within six months from the date of acceptance of the import entry:
Provided, That the Collector of Customs may extend the time for
exportation or payment of duties, taxes and other charges for a term not
exceeding six months from the expiration of the original period; and
technical and scientific films when imported by technical, cultural and
scientific institutions, and not to be exhibited for profit: Provided, That if
any of the said films is exhibited for profit, the proceeds therefrom shall be
subject to confiscation, in addition to the penalty provided under section
three thousand six hundred and ten of this Code.

n. Articles (e.g., photographic, sound recording, electrical and
other equipment, vehicles, animals, costimes, apparel, properties,
supplies, unexposed motion picture films) brought by foreign producers
for making or recording motion pictures on location in the Philippines,
upon identification and the giving of a bond in an amount equal to one and
one-half times the ascertained duties, taxes and other charges thereon,
conditioned for exportation thereof or payment of the corresponding
duties, taxes and charges within six months from the date of acceptance of
the import entry. Unexposed motion picture films allowed free entry under
bond for exportation falling within this subsection and subsequently
exposed, whether or not devéloped, may be re-exported free of import
duties, taxes and other charges. Negative films, undeveloped, exposed
outside the Philippines by resident Filipino citizens’ or by producing
companies of Philippine registry where the principal actors and artists
employed for the production are Filipinos, upon affidavit by the importer
that such ‘exposed films are the same films previously exported from the
Philippines. As used in this paragraph, the terms “actors” and “artists”
iniclude the persons working the photographic camera or other
photographic and sound recording apparatus by means of which the film is
made.

©. Costumes, regalia and other articles, including office supplies
and equipment, imported for the official use of members and attaches of
foreign embassies, legations, consular officers and other representatives of
foreign government: Provided, That the country which any such person
represents accords like privileges to corresponding officials of the
Philippines.

Articles imported for the personal or family use of the members
and attaches of foreign embassies, legations, consular officers and other


representatives of foreign governments: Provided, That such privilege
shall be accorded under special agreements between the Philippines and
the countries which they represent: And Provided, further, That the
privilege may be granted only upon specific instructions of the
Department of Finance in each instance which. will be issued only upon
request of the Department of Foreign Affairs.

p. Regalia, gems, statuary, specimens or casts of sculptures
imported for the bona fide use and by the order of any society
incorporated or established solely for religious, philosophical, educational,
scientific or literary purposes, or for the encouragement of the fine arts, or
for the use and by the order of any institution of learning, public library,
museum, orphan asylum or hospital, and not for barter, sale’ or hire:
Provided, That the term "regalia" shall be held to embrace only such
insignia of rank or office or emblems as may be worn upon the person or
bore in the hand during public exercises or ceremonies of the society or
institution, and shall not include articles of furniture or fixtures, or
ordinary wearing apparel, nor personal property of individuals.

4. Musical organs imported for the bona fide use and by the owner
of any society incorporated or established for religious ot educational
purposes or expressly for presentation thereto.

r. Scientific apparatus, instruments and utensils specially imported
for the bona fide use and by the order of any society or institution
incorporated or established solely for educational, scientific, or charitable
purposes, or for the encouragement of the fine arts, or for the bona fide use
and by the order of any institution of learning in the Philippines, and not
for barter, sale or hire.

s. Philosophical, historical, economic, scientific, technical and
vocational books specially imported for the bona fide use and by the order
of any soci or institution, ‘incorporated or established solely for
philosophical, educational, scientific, charitable or literary purposes, or for
the encouragement of the fine arts, or for the bona fide use of and by the
order of any institution of learning in the Philippines: Provided, That the
provisions of this subsection shall apply to books not exceeding two
copies of arly one work when imported by any individual for his own use,
and not for barter, sale or hire.

Bibles, missals, prayerbooks, koran, ahadith and other religious
books of similar nature and extracts therefrom, hymnal and hymns for
religious uses, specially prepared books, music and other instrumental aids
for the deaf, mute or blind, and textbooks prescribed for use in any school
in the Philippines: Provided, That complete books published in parts in
periodical form shall not be classified herein.

t. Newsprint, whenever imported by or for publishers for the
exclusive use in the publication of newspapers.

u. Articles donated to public or private institutions established
solely for educational, scientific, cultural, charitable, health, relief,



philanthropic or religious purposes, for free distribution among, or
exclusive use of, the needy.

v.Food, clothing, house-building and sanitary-construction
materials, and medical, surgical and other supplies for use in emergency
relief work, when imported by or directly for the account of any victim,
sufferer, refugee, survivor or any other person affected thereby, or by or
for the account of any relief organization, not operated for profit, for
distribution among the distressed individuals,. whenever the President
shall, by proclamation, declare an emergency to exist by reason of a state
of war, pestilence, choleta, plague, famine, drought, typhoon, earthquake,
fire, flood and similar conditions: Provided, That the importation free of
duty of articles described in this herein subsection shall continue only
during the existence of such emergency, or within such limits and subject
to such conditions as the President may, by his proclamation, deem
necessary to meet the emergency.

w. Philippine articles previously exported from the Philippines and
returned without having been advanced in value.or improved in condition
by any process of manufacture or other means, and upon which no
drawback or bounty has been allowed, and foreign articles when returned
after having been loaned and exported for use temporarily abroad solely
for exhibition, examination or experimentation, for scientific or
educational purposes, and foreign containers packed with. exported
Philippine articles and returned empty if imported by or for the account of
the person or institution who exported them from the Philippines and not
for sale, subject to identification: Provided, That any Philippine article
falling under this subsection upon which drawback or bounty has been
allowed shall, upon re-importation thereof, be subject to a duty under this
subsection equal to the amount of such drawback or bounty.

x. Large containers (¢.g., demijohns, cylinders, drums, casks and
other similar receptacles of metal, glass or other material) which are, in the
opinion of the Collector of Customs, of such a character as to be readily
identifiable may be delivered to the importer thereof upon identification
and the giving of a bond in an amount equal to one and one-half times the
ascertained duties, taxes and other charges thereon, conditioned for the
exportation thereof on payment of the corresponding duties, taxes and
other charges within one year from the date of acceptance of the import
entry

y. Supplies or ship stores listed as such for the use of the vessel;
supplies which are intended for the reasonable requirements of the vessel
in her voyage outside the Philippines, including such articles transferred
from a bonded warehouse in any collection district to any vessel engaged
in foreign trade, for use or consumption of the passeigers or its crew on
board such vessel as sea stores; or articles purchased abroad for sale on
board a vessel as saloon stotes or supplies: Provided, That any surplus or
excess of such ship, sea or saloon stores arriving from foreign ports shall
be dutiable according to the corresponding heading or subheading.


z. Articles and salvage from vessels recovered after the period of
two years from the date of filing the marine protest or the time when the
vessel was wrecked or abandoned as determined by the Collector of
Customs, or such part of Philippine vessel or her equipmerit, wrecked or
abandoned in Philippine waters or elsewhere: Provided, That articles and
salvage recovered within the said period of two years shall be dutiable
according to the corresponding heading or subheading.

aa. Articles of easy identification exported from the Philippines for
Tepairs abroad and subsequently reimported: Provided, That the cost of the
repairs made to any such article shall pay a rate of duty of twenty-five per
cent ad valorem.

bb. Coffins or urs containing human remains, bones or ashes, and
all articles for ornamenting said coffins or ums and accompanying same;
used personal and household effects, not merchandise, of decéased
persons, upon identification as such, satisfactory to the Collector of
Customs. .

cc. PHARMACEUTICAL PRODUCTS IN BULK FORM OR
AS FINISHED PRODUCTS, AND RAW MATERIALS TO BE USED
FOR THE MANUFACTURE OF SAID PRODUCTS; PROVIDED
THAT, THE SAME HAD BEEN- DULY. APPROVED FOR
COMMERCIAL SALE BY THE BUREAU OF FOOD AND DRUGS
AND THE CORRESPONDING CERTIFICATE OF PRODUCT
REGISTRATION IS SHOWN TO EVIDENCE SUCH APPROVAL;
PROVIDED FURTHER THAT, SUCH PRODUCT AS NAMED IN THE
REGISTRATION CERTIFICATE. MATCHES THE IMPORTER’S
DECLARATION; AND PROVIDED FINALLY THAT SUCH
IMPORTATION DOES NOT- VIOLATE A THIRD PARTY'S
INTELLECTUAL PROPERTY RIGHTS.”

SECTION 49. Strengthening of the Generic Industry. To encotfage local manufacturing
of generic products and strengthen the pharmaceutical generic industry, pharmaceutical
manufacturing shall be deemed to have met all the criteria set forth under Article 26 of
the Omnibus Investment Code of 1987. Thus, upon full evaluation of the Board of
Investments, it shall be considered every year for inclusion in the cotintry’s Investment
Priorities Plan.

ARTICLE IX
APPROPRIATIONS

SECTION 50. Initial Appropriation. — An initial budget, from the General
Appropriations Act shall be allocated for the establishment of. the Council and the
Hospital Corporation and to enable the same to initiate its operations, including the
formulation of the rules and regulations necessary for the implementation of this Act.


SECTION 51. Special Fund - Upon effectivity of this Code, all amounté paid to the .
government by the pharmaceutical manufacturers and other healthcare related businesses
as Expanded Value-Added Tax shall be automatically appropriated to fund the healthcare
reform agenda and programs that may be set pursuant to the provisions of this Code.

SECTION 52. Additional Appropriations. - The Council shall request Congress to

appropriate supplemental funding to meet targeted milestones of the policies and
programs which it has set.

ARTICLE X
TRANSITORY PROVISIONS

SECTION 53. The Council.~ Within thirty (30) days from the date of this Act taking
effect, the Secretary of the DOH as Chair of the Council’ shall issue notices to the
members of the Council and the sectors which should be represented therein. He shall
thereafter direct the sectors to nominate a representative to the council within thirty (30)
days from receipt of notice and advise him of such nomination in writing, Thereafter, but
in no case should be later than sixty (60) days from the date of this Act taking effect, the
Council shall convene its first meeting where it shall set its initial budget requirements
and to plan its future activities.

SECTION 54. Implementing Rules and Regulations. - Within thirty (30) days from the
first meeting of the Council, it shall reconvene to formulate the rules and regulations
necessary for the implementation of this Act.

SECTION 55. Promulgation. - Within six (6) months from its first meeting, the Council
shall promulgate the aforementioned rules and regulations in at least two (2) national
newspapers of general circulation.”

ARTICLE XI
MISCELLANEOUS PROVISIONS

SECTION 56. Oversight Provision. - Congress shall conduct a regular review of, the
performarice of the Council and the Hospital Corporation which shall entail a systematic
evaluation of the Council’s and Corporation’s policy and program impact or
accomplishments with respect to its objectives or goals. Such review shall be undertaken

by the Committee of the Senate and the House of Representatives which have legislative
jurisdiction over the Program. :

For this purpose, the Council shall submit an annual report to'the said Committee before ,
the opening of the Congress in July of each year.


SECTION 57. Information Campaign. - There shall be provided a period of sixty (60)
days to undertake an intensive public information campaign prior to the implementation
of the rules and regulations of this Act.

SECTION 58. Repealing Clause. — All laws, as well as pertinent rules and regulations
thereof which are inconsistent with the provisions of this Act are hereby repealed or
amended accordingly.

SECTION 59. Separability Clause. - In the event any provision of this Act or the
application of such provision to any person or circumstances is declared invalid, the
remainder of this Act or the application of said provisions to other persons or
circumstances shall not be affected by such declaration.

SECTION 60.  Effectivity. - This Act shall take effect fifteen (15) days after its
publication in at least three (3) newspapers of general circulation.

Approved.