Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Batasan Hills, Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL No. _____ 
-------------------------------------------------------------------------------------------------------- 
Introduced by  
ACT Teachers Party-List Rep. FRANCE L. CASTRO,  
GABRIELA Women’s Party Rep. ARLENE D. BROSAS,  
and KABATAAN Party-List Rep. RAOUL DANNIEL A. MANUEL 
-------------------------------------------------------------------------------------------------------- 
AN ACT 
CLASSIFYING THE SALE AND IMPORTATION OF ALL ESSENTIAL 
DRUGS AND MEDICINES, NUTRITIONAL FOODS AND DRINKS 
THEREOF AS VALUE-ADDED TAX EXEMPT TRANSACTIONS, 
AMENDING FOR THE PURPOSE SECTION 109 (1) OF REPUBLIC ACT 
8424, OTHERWISE KNOWN AS THE TAX REFORM ACT OF 1997, AS 
AMENDED BY REPUBLIC ACT 9337, AND FOR OTHER PURPOSES 
EXPLANATORY NOTE 
This Bill seeks to lessen the burden of the people by making all essential drugs 
and medicines, and nutritional food and drinks more affordable through exempting the 
sales and importation thereof from value-added tax (VAT). 
Article XIII, Section 11 of the 1987 Constitution mandates 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.  There shall be priority for the needs of the underprivileged 
sick, elderly, disabled, women, and children.  The State shall endeavor to provide free 
medical care to paupers.” 
Despite three years of implementation of Republic Act 11223 or the Universal 
Health Care Act, Filipino patients still bear almost half of total Philippine health 
expenditure.  According to the Philippine Statistics Authority (PSA), ₱400.10 billion or 
44.7% of the total health expenditure in 2020 was financed through household out-of-
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pocket payment.  It is way higher than the ₱154.62-billion (17.3%) and ₱133.21-billion 
(14.9%) contributions to total health expenditure of the Department of Health (DOH) 
and the Philippine Health Insurance Corporation (PhilHealth), respectively.1 
 
Pharmacies recorded the highest health expenditure among health care providers 
amounting to ₱252.67 billion.  Meanwhile, ₱184.80 billion was spent on 
pharmaceuticals, which accounts to 20.6% of the total health expenditure. 
 
Furthermore, even with the passage of RA 9508 or the Cheaper Medicines Act 
of 2008, Ulat ng Bayan September 2019 Report revealed that 99% of Filipinos said that 
they do not buy all their prescription medicines because they are expensive.  
Furthermore, based on another survey commissioned by the DOH, branded and generic 
medicines in the country cost 22 and 4 times more than international reference prices, 
respectively.2 
 
In a study by the Yuchengco Center,3 the Philippines has the second highest drug 
prices in Asia, next to Japan, with our cost of medicines 3.4 to 184 times higher than 
the international reference prices.  “The cost of some medicines sold in the Philippines 
is 259 to 1600 percent higher than the counterparts in India, Pakistan and Thailand.  
Local profit margins range from 1000 to 2860 percent.” 
 
Filipinos are burdened with the high cost of medicines and health services more 
so with the taxes imposed on these medicines.  While RA 11534 or the Corporate 
Recovery and Tax Incentives for Enterprises Act exempted the sale of and importation 
of prescription drugs and medicines for diabetes, high cholesterol, hypertension, cancer, 
mental illness, tuberculosis and kidney diseases from the imposition of value added tax, 
not all essential medicines are covered. 
 
Furthermore, this Bill seeks to help the poor and underprivileged to gain access 
to FDA-approved nutritional foods and drinks. These products have high potential for 
improving the health of the Filipinos, especially of the senior citizens, by boosting their 
nutrition and aiding their digestion. These nutritional food and drinks are also resorted 
to by older people to ease symptoms related to illness like diabetes and hypertension. 
                                               
1 “Health Spending Registered 12.6 Percent Growth, Share of Health to Economy Went Up to 5.6 Percent in 
2020.” Philippine Statistics Authority, 14 October 2021. https://psa.gov.ph/pnha-press-release/node/165216  
2 “99% of Filipinos Say Medicines are Expensive – September Ulat ng Bayan Report.” Department of Health, 5 
December 2019. https://doh.gov.ph/doh-press-release/99-percent-of-filipinos-say-medicines-are-expensive-
september-ulat-ng-bayan-report  
3 Liza, Christiene Jennil G. “The Philippine Medicines Policy (2017-2022): Will this Increase Access to Cheap 
Drugs?” Yuchengco Center, 2017. 
https://www.academia.edu/35191724/The_Philippine_Medicines_Policy_2017_2022_Will_this_Increase_Acces
s_to_Cheap_Drugs  


These kind of opportunity for health development should be made accessible to every 
Filipinos 
In recognition of people’s right to health, ACT Teachers Party-List Rep. France 
Castro, Gabriela Women’s Party Rep. Arlene Brosas and Kabataan Party-List Rep. 
Raoul Manuel filed this measure in the 19th Congress.  To provide immediate relief to 
Filipino patients from the high cost of drugs and medicines, and nutritional foods and 
drinks, this Bill seeks to exempt all essential drugs and medicines, and nutritional foods 
and drinks from the imposition of value added tax.  This will not only make the 
medication more affordable and accessible for the poor, but it will also improve the 
health and well-being of the Filipinos. 
This proposal is being forwarded with other Bills towards an “integrated and 
comprehensive approach to health development” for specific sectors and for all 
Filipinos in general, including House Bill 208 or An Act Providing for a Free, 
Comprehensive, and Progressive, National Public Health Care System, House Bill 
2631 or the Anti-Privatization of Public Hospitals, Health Facilities and Health 
Services Act, and House Bill 205 or The Medical Examination and Treatment Allowance 
for Public School Teachers Act. 
Thus, immediate approval of this Bill is earnestly sought. 
________________________________ 
Rep. FRANCE L. CASTRO 
ACT Teachers Party-List 
________________________________ 
Rep. ARLENE D. BROSAS 
GABRIELA Women’s Party 
________________________________ 
Rep. RAOUL DANNIEL A. MANUEL 
KABATAAN Party-List 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Batasan Hills, Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL No. _____ 
-------------------------------------------------------------------------------------------------------- 
Introduced by  
ACT Teachers Party-List Rep. FRANCE L. CASTRO,  
GABRIELA Women’s Party Rep. ARLENE D. BROSAS,  
and KABATAAN Party-List Rep. RAOUL DANNIEL A. MANUEL 
-------------------------------------------------------------------------------------------------------- 
AN ACT 
CLASSIFYING THE SALE AND IMPORTATION OF ALL ESSENTIAL 
DRUGS AND MEDICINES, NUTRITIONAL FOODS AND DRINKS 
THEREOF AS VALUE-ADDED TAX EXEMPT TRANSACTIONS, 
AMENDING FOR THE PURPOSE SECTION 109 (1) OF REPUBLIC ACT 
8424, OTHERWISE KNOWN AS THE TAX REFORM ACT OF 1997, AS 
AMENDED BY REPUBLIC ACT 9337, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Section 109 (1), Chapter 1, Title IV, Value-Added Tax of Republic Act 
8424, otherwise known as the Tax Reform Act of 1997, as amended by Republic Act 
9337, is hereby further amended to read as follows: 
“SEC. 109. Exempt Transactions. – (1) Subject to the provisions of subsection 
(2) hereof, the following transactions shall be exempt from the value-added tax:
“(A) xxx 
“(B) xxx 
After paragraph (G), insert the following paragraphs (H). 
“(H) SALE OR IMPORTATION OF ALL ESSENTIAL DRUGS AND 
MEDICINES AS PROVIDED FOR IN THE PHILIPPINE NATIONAL 
FORMULARY, AND OTHER DRUGS AND MEDICINES GRANTED A 
COMPASSIONATE SPECIAL PERMIT (CSP) OR EMERGENCY USE 
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AUTHORIZATION 
(EUA) 
BY 
THE 
FOOD 
AND 
DRUG 
ADMINISTRATION (FDA), AND THOSE DEEMED NECESSARY 
AMID A PUBLIC HEALTH EMERGENCY BY THE HEALTH 
TECHNOLOGY ASSESSMENT COUNCIL OR THE SECRETARY OF 
HEALTH. 
 
“(I) SALE OR IMPORTATION OF ALL NUTRITIONAL FOODS AND 
DRINKS: PROVIDED THAT FOR THIS PURPOSE, NUTRITIONAL 
FOODS AND DRINKS SHALL REFER TO ANY FOOD OR BEVERAGE 
PRODUCT 
APPROVED 
BY 
THE 
FOOD 
AND 
DRUGS 
ADMINISTRATION WHICH CONTAINS MICRONUTRIENTS AND 
WERE FORMULATED TO MEET THE DIET OF INDIVIDUALS WHO 
SUFFER FROM POOR DIGESTION, MALNUTRITION, OBESITY, 
RENAL 
PROBLEMS, 
AND 
ILLNESSES 
LIKE 
DIABETES, 
HYPERTENSION, CANCER AND OTHER SIMILAR CASES. 
 
The succeeding paragraphs shall be re-lettered  as from (J) to (V). 
 
SEC. 2. Implementing Rules and Regulations. – The Secretary of Finance shall, upon 
the recommendation of the Commissioner of Internal Revenue, promulgate not later 
than 15 days upon the effectivity of this Act, the necessary Rules and Regulations for 
the effective implementation of this Act. 
 
SEC. 3. Repealing Clause. – All laws, acts, decrees, executive orders, issuances, and 
rules and regulations or parts thereof which are contrary to and inconsistent with any 
provisions of this Act are hereby repealed, amended or modified accordingly. 
 
SEC. 4. Separability Clause. – If any provision of this Act is subsequently declared 
unconstitutional, the validity of the remaining provisions hereof shall remain in full 
force and effect. 
 
SEC. 5. Effectivity Clause. - This Act shall take effect immediately after its complete 
publication either in the Official Gazette or in a newspaper of general circulation in the 
Philippines. 
 
 
Approved,