EIGHTEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
Third Regular Session 
)
SENATE 
S. B. No. 2311
FILED
TH.iE¥
GILLS
Introduced by Senator SONNY ANGARA
AN ACT
PROVIDING FOR THE PROTECTION AGAINST PANDEMIC AND THE 
DEVELOPMENT OF THE HEALTHCARE AND MANUFACTURING INDUSTRIES, 
AND PROVIDING FUNDS THEREFOR
EXPLANATORY NOTE
The COVID-19 pandemic revealed many infirmities in our economy. Among 
these includes our lack of capacity to produce certain products domestically. In the 
immediate months after a State of Public Health Emergency1 was declared due to the 
rapid spread of COVID-19 and community quarantines were enacted nationwide 
starting March 2020, the Philippines faced serious supply shortages of critical products 
such as personal protective equipment (PPEs), extraction kits, and other laboratory 
equipment needed to process test results.
Several factors led to this situation. As global demand for such products 
skyrocketed because of the pandemic, many countries implemented export bans and 
prioritized building up their own reserves and stockpiles. This in turn imposed heavy 
burdens on the pandemic responses of countries like the Philippines who rely on 
imports and were without a domestic supply base for these products.
As a result, there emerged consistent complaints of healthcare workers and 
other frontliners not having enough PPEs, and laboratories being unable to process 
samples adequately for lack of equipment. Both came with dire, and at times deadly, 
consequences.
Presidential Proclamation No. 922, s. 2020


Emergency measures were needed. Congress speedily responded by passing 
the Bayanihan to Heal As One Act (RA 11469), which among other things authorized 
and empowered the President to liberalize the grant of incentives for the manufacture 
or importation of critical equipment and supplies; to ensure the availability of essential 
goods by adopting measures that will facilitate their production and minimize any 
disruption to the appropriate supply chain; and require businesses to prioritize 
contracts for materials and services critical to the country's response to the pandemic.
The Executive then acted upon this legal mandate, and with the energetic 
support from the private sector, some of the gaps in our supply chains of critical 
products were filled. Garments manufacturers repurposed their machines to produce 
PPEs. Distilleries shifted their production lines to produce hand-sanitizing alcohol. 
Customs procedures were streamlined and super green lanes were established to 
allow the faster entry of much-needed equipment.
Now that the end of the pandemic is on the horizon, it is imperative that as the 
country recovers and builds back, reforms are put in place so that we never experience 
the shortages we faced in the early days of the community quarantines.
Hence, this proposed measure aims to make it a policy of the State that 
whenever the Department of Health (DOH) affirms that a pandemic of national or 
international concern exists or when the President of the Republic declares a State of 
Public Health Emergency, duly accredited enterprises that manufacture or import 
critical products, or provide critical services are entitled to receive certain fiscal 
incentives, such as exemptions from value-added tax and other fees. The measure 
also temporarily suspends export requirements which bars covered enterprises from 
offering their products and services to the domestic market. It also mandates the 
government, as a primary procuring entity, to give preference for critical products that 
are domestically produced.
The measure also calls on the Department of Trade and Industry (DTI), in 
collaboration with the Department of Budget and Management (DBM), the National 
Economic and Development Authority (NEDA), and the Department of Health (DOH), 
to lead in the stockpiling of such critical products, and formulate a National Critical 
Products Stockpiling Plan to improve the resilience of country's supply chains and 
storage capacity. The DTI, including the Board of Investments (BOI), the Philippine


Economic Zone Authority (PEZA), and all other investment promotions agencies (IPAs) 
are also enjoined to attract the necessary investments and develop and promote the 
appropriate industries—such as in healthcare, medical products manufacturing, 
diagnostics, and even biotechnology.
Aligned with our "Tatak Pinoy" initiative, which is focused on helping Filipino 
enterprises and professionals to become more productive and globally competitive, 
this measure should be considered a critical component of our efforts to recover from 
the recessive effects of the COVID-19 pandemic. Hence, in the spirit of building back 
better, we urge the swift passage of this measure.
SONNY ANGARA


EIGHTEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
Third Regular Session 
)
SENATE 
S. B. No. 2311
FILED
¥
GILLS
Introduced by Senator SONNY ANGARA
AN ACT
PROVIDING FOR THE PROTECTION AGAINST PANDEMIC AND THE 
DEVELOPMENT OF THE HEALTHCARE AND MANUFACTURING INDUSTRIES, 
AND PROVIDING FUNDS THEREFOR
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
1 
Section 1. Short Title. — This Act shall be known as the "Pandemic Protection
2 
Act of 2021".
3 
SEC. 2. Declaration of Policy. - It is hereby the declared policy of the State
4 
to protect and promote the right to health of the people and instill health
5 
consciousness among them. The State recognizes pandemics and other public health
6 
emergencies as threats to public health and national security, which can undermine
7 
the social, economic, and political functions of the State. To this end, the State, shall
8 
protect the people from pandemics and other public health emergencies, and shall:
9 
(a) adopt efficient and effective measures that will prevent the overburdening
10 
of the healthcare system;
11 
(b) develop the healthcare and manufacturing industries and preserve and
12 
generate employment during the crisis;
13 
(c) ensure adequate and readily available supply of critical products and services
14 
for the health workers and the public;
15 
(d) protect the interest of the consumers and establish standards of conduct for
16 
business and industry; and
17 
(e) build strong partnership with the private sector and other stakeholders to
18 
deliver these measures quickly and efficiently.


1 
SEC. 3. Coverage. -This Act shall cover the manufacture or production of
2 
critical products, including repurposing of existing manufacturers, and supply of critical
3 
products and services. It shall include their entire supply chain and encompass their
4 
raw materials, packaging and its raw materials. The benefits under this Act shall be in
5 
addition to the incentives provided under existing laws.
6 
SEC. 4. Applicability. - This Act shall apply and shall remain in force and
7 
effect during the existence of a pandemic of national and/or international concern as
8 
declared by the Secretary of Health, or during a state of public health emergency as
9 
declared by the President.
10 
SEC. 5. Definition of Terms. - For the purpose of this Act, the following
11 
definitions shall apply:
12 
i. Accreditation - refers to the process of officially recognizing a person or
13 
entity under this Act;
14 
ii. Critical Products - refer to medicines, testing kits, vaccines, personal
15 
protective equipment, ventilators and such other supplies or equipment,
16 
including its raw materials, required to address pandemics and other
17 
public health emergencies as may be determined by the Department of
18 
Health (DOH) and other relevant government agencies;
19 
iii. Critical Services - refer to services required for the manufacture,
20 
production and distribution of critical products. This shall also include
21 
testing laboratories; waste management, including but not limited to
22 
waste segregation, storage, collection, sorting, treatment and disposal
23 
services; and other services as may be determined by the DOH and other
24 
relevant government agencies.
25 
iv. Manufacturer - refers to an enterprise duly accredited or registered
26 
under Section 6 hereof, engaged in the production of critical products
27 
including preparation, processing, compounding, formulating, 
filling,
28 
packing, repacking, altering, ornamenting, finishing and labeling;
29 
V. Packaging - refers to material used to wrap or protect critical products;
30 
vi. Producer - refers to an enterprise that manufactures, makes, grows, or
31 
produces critical products;


1 
vii. Raw Material - refers to materials and inputs from which a critical product
2 
and its packaging is made; and
3 
viii. Stockpiling - refers to the accumulation of stocks of critical products.
4 
SEC. 6. Conformity to Standards. The materials, products, processes, and
5 
services shall conform and comply with the guidelines on the standards and
6 
requirements issued by the relevant government agencies such as, but not limited to,
7 
the DOH, the Food and Drug Administration (FDA), and the Bureau of Philippine
8 
Standards. In the case of other critical services, the equipment, technologies and
9 
services should be approved by the Department of Environment and Natural
10 
Resources, DOH or other concerned regulatory agencies
11 
For this purpose, the relevant government agencies shall prioritize the
12 
facilitation of the issuance of licenses and other requirements to manufacturers
13 
covered by this Act.
14 
SEC. 7. Accreditation. - Prior to the availment of benefits herein, the
15 
manufacturers and producers shall apply for accreditation with the Department of
16 
Trade and Industry (DTI), through the Board of Investments (BOI). Provided, that
17 
manufacturers who are registered with other Investment Promotion Agencies (IPAs)
18 
shall directly apply for authority to import with the concerned IPA, in lieu of the DTI-
19 
BOI accreditation.
20 
SEC. 8. Exemption from Custom Duties, Vaiue Added Tax (VA T), Other
21 
Taxes and Fees. - Regardless of the country of origin, importation under this Act of
22 
the capital equipment, spare parts and accessories, raw materials, packaging and its
23 
raw materials, or any articles needed in the supply chain of the critical products or
24 
services shall be exempt from custom duties, VAT, other taxes and fees such as import
25 
processing fees and fees imposed by the Bureau of Customs, FDA and other relevant
26 
agencies. In cases of emergency, where there is a need to augment the domestic
27 
supply, the foregoing exemption shall likewise apply to the importation of critical
28 
products: Provided, that for purposes of qualifying for exemption herein, the DTI shall
29 
certify that the articles being imported are not locally available or of insufficient
30 
quantity and preference: Provided, further, that the exemption under this Section shall
31 
terminate upon declaration by the President that the public health emergency has
32 
ceased to exist.


1 
SEC. 9. Exemption from Donor's Tax. - Donations of imported articles
2 
pertaining to the containment or mitigation of the pandemic or other public health
3 
emergency shall be exempt from donor's tax: Provided, that the donated articles shall
4 
not be intended for commercial use but shall be for free distribution to or use for the
5 
foregoing purpose. Any resale of the donated articles shall be prohibited: Provided,
6 
further, that the Department of Finance (DOF) and the Bureau of Internal Revenue
7 
(BIR) shall issue the necessary guidelines governing donations to private entities:
8 
Provided, furthermore, that the exemption claimed under this section shall be subject
9 
to post audit by the BIR or the Bureau of Customs (BOC), as may be applicable:
10 
Provided, furthermore, that the donations shall be subject to the rules of deductibility
11 
pursuant to the provisions of the National Internal Revenue Code, as amended and
12 
applicable rules and issuances of the BIR: Provided, finaiiy, that the exemption under
13 
this Section shall terminate upon declaration by the President that the public health
14 
emergency has ceased to exist.
15 
SEC. 10. Exemption from VAT on Local Sales. - Sale of critical products
16 
and services during a pandemic or other public health emergencies shall be exempt
17 
from VAT, subject to existing rules and regulations issued by the Bureau of Internal
18 
Revenue (BIR).
19 
The DTI-BOI and the BIR shall come up with the list of VAT-exempt critical
20 
products or services, including the new and/or additional critical products covered
21 
under this Act. The list of VAT-exempt critical products or services shall be posted in
22 
the BIR website through a Revenue Memorandum Circular.
23 
The exemption provided under this Section shall terminate upon declaration by
24 
the President that the public health emergency has ceased to exist.
25 
SEC. 11. Suspension of Export Requirement - The export requirement
26 
imposed under the laws administered by relevant IPAs may be suspended by the
27 
President of the Philippines, upon recommendation of the Fiscal Incentives Review
28 
Board, to satisfy national interest or in an emergency situation. During such
29 
suspension, export enterprises that manufacture critical products or render critical
30 
services shall supply up to eighty percent (80%) of their daily production or service to
31 
government institutions, hospitals, and private establishments in the country for local
32 
or domestic use.


1 
The local sales of critical products and services of such export enterprises shall
2 
be deemed and treated as "export sales" in compliance of their export requirement
3 
As such, the corresponding treatment, exemption on duties, taxes and fees, and other
4 
incentives warranted under the existing laws governing these export enterprises shall
5 
continue to apply. Further, if such export enterprises are located in special economic
6 
zones with status of separate customs territory under relevant laws, such local sales
7 
shall likewise be exempt under Sections 7 and 8 hereof. For this purpose, the DTI-BOI
8 
or concerned IPA shall monitor the requisite compliance of said export enterprises.
9 
The exemption on duties, taxes and fees under this Section shall subsist for a
10 
period of three (3) years after the declaration by the World Health Organization that
11 
the pandemic has ended.
12 
SEC. 12. Procurement of Critical Products by the Government — To
13 
ensure adequate and responsive supply of critical products and supplies, the
14 
government, as the procuring entity shall give preference and procure critical products
15 
manufactured, produced or made in the Philippines: Provided, that the concerned
16 
procuring entity shall make the award to the lowest domestic manufacturer-bidder
17 
notwithstanding that its bid is fifteen percent (15%) in excess of the lowest foreign
18 
bid: Provided further, that the winning bidder has secured from the DTI a certification
19 
that the products, articles, materials, or supplies are produced, made or manufactured
20 
in the Philippines: Provided, finaiiy. That other qualification and documentary
21 
requirements for local manufacturers and suppliers shall be prioritized and expedited
22 
by the DOH, FDA and other concerned departments and agencies.
23 
Private enterprises are also encouraged to source their requirements for critical
24 
products from local manufacturers.
25 
SEC. 13. National Critical Products Stockpiling Plan. The DTI, in
26 
collaboration with the DOH, the Department of Budget and Management (DBM), the
27 
National Economic and Development Authority (NEDA) and appropriate
28 
representatives from the private sector and academe, shall lead in the formulation of
29 
a national critical products stockpiling plan to enhance the resilience of the country's
30 
supply chains for goods that are essential to protecting the health and wellness of
31 
citizens during pandemics and other public health emergencies.


1 
With due consideration to fiscal responsibility and sustainability, the national
2 
critical products stockpiling plan may outline programs for long-term strategic
3 
investments from the public and private sector; expansion of warehousing, storage
4 
capacity, and logistics networks for critical products; and building back-up production
5 
capacity nationwide such as through the establishment of networks of fabrication labs,
6 
testing labs, and distilleries, among others.
7 
Sec. 14. Stockpiling of Critical Products. -The DTI, in coordination with
8 
the DOH and the DBM, shall stockpile necessary critical products to prepare for an
9 
imminent or potential pandemic or public health emergency, in accordance with the
10 
National Critical Products Stockpiling Plan. The DTI shall procure the critical products
11 
in accordance with Section 10 and shall distribute the stockpiled critical products to
12 
DOH or other relevant government agencies as the need arises.
13 
SEC. 15. Relocation or Expansion of Manufacturing Enterprises in the
14 
Philippines. - Manufacturers or producers of critical products that will relocate or
15 
expand operations in the Philippines are qualified to avail of the exemptions under this
16 
Act provided that they meet the requirements prescribed herein.
17 
SEC. 16. Development and Promotion of Heaithcare/ Manufacturing
18 
and Other Related Industries. - The DTI-BOI and all relevant IPAs shall actively
19 
develop and promote the healthcare, manufacturing and other related industries to
20 
encourage investors in this area of investments.
21 
SEC. 17. Synchronized and Integrated Government Approach. - All
22 
departments, bureaus, agencies or instrumentalities of the government shall ensure
23 
the implementation of this Act by the agencies concerned in a synchronized and
24 
integrated manner. No government body shall adopt any policy or take any course of
25 
action contrary to or inconsistent with this Act.
26 
SEC. 18. Funding. - Funding to operationalize the provisions and mechanisms
27 
shall be allocated to the DTI-BOI, according to the General Appropriations Act.
28 
SEC. 19. Implementing Rules and Reguiations (IRR). -The DTI and BOI
29 
shall promulgate the rules to implement this Act.
30 
SEC. 20. Repealing Clause. All laws, issuances, orders, rules and regulations,
31 
or parts thereof, which are contrary or inconsistent with this Act are hereby repealed,
32 
amended or modified accordingly.


1 
SEC. 21. Separability Clause. If any provision of this Act is declared invalid
2 
or unconstitutional, the other provisions not affected thereby shall remain valid and
3 
subsisting.
4 
SEC. 22. Effectivity Clause. This Act take shall effect immediately upon its
5 
publication in a newspaper of general circulation or in the Official Gazette.
Approved,