Rye ic uh the Plies

HOUSE OF REPRESENTATIVES
Quexon City
ce

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 7 13 35

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.

AN ACT PROVIDING FOR THE PROTECTION AGAINST PANDEMIC AND THE
DEVELOPMENT OF THE HEALTHCARE AND MANUFACTURING INDUSTRIES,
AND PROVIDING FUNDS THEREFOR

EXPLANATORY NOTE

Article XIll, Section 11 of the 1987 Constitution, states 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.”

There are various essential goods in the time of COVID-19 from hygiene products
and personal protection equipment that almost everyone needs, such as liquid sops,
rubbing alcohol, hand sanitizers, gloves and medical masks, to items for diagnosis
and treatment and case management products such as oxygen concentrators and
respirators.

Based on the World Bank Report, the global markets for these crucial covid-19
products are highly concentrated (Espitia, Rocha, Ruta, 2020). The Philippines
belongs to the top 20 developing countries with the highest number of COVID-19
cases, and these countries are heavily dependent on importation of the said
essential products. It is likewise reported that, only five countries account for 80
percent of total imports: the European Union, United States, China, Japan and
Korea.

This measure promotes and protects the manufacture or production of critical
products, including repurposing of existing manufacturers, and supply of critical


services. This includes their entire supply chain including their raw materials,
packaging and its raw materials.

The intention is to be able to adopt efficient and effective measures that will prevent
the overburdening of the healthcare system and, at the same time, develop the
healthcare and manufacturing industries by also preserving and generating
employment during the crisis.

The Board of Investments (BO!) has already opened the accreditation for companies
manufacturing products that are related to the government's effort to fight the
coronavirus disease 2019 (Covid-19) pandemic on April 15, 2020. Under the Joint
Memorandum Circular (JMC) No. 2020-02 of the Department of Finance (DOF) and
the Department of Trade and Industry (DTI), the government offered incentives to
accredited enterprises, including exemption from import duties, taxes, and other
fees.

This bill established the said move to ensure adequate and readily available supply
of critical products and services for the public, and protect the interest of the
consumers and establish standards of conduct for business and industry.
Accordingly, the materials, products, processes, and services shall conform and
comply with the guidelines on the standards and requirements issued by the relevant
government agencies such as, but not limited to, the DOH, Food and Drug
Administration (FDA), and Bureau of Philippine Standards.

In view of the foregoing, the approval of this bill is earnestly sought.

ly al

LUIS IND “LRAY” F. VILLAFUERTE, JR.


Resebli ofthe Philepines

HOUSE OF REPRESENTATIVES
Quesow City
og

EIGHTEENTH CONGRESS
First Regular Session

7135

HOUSE BILL NO.

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.

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:

SECTION 1. Short Title. - This Act shall be known as the “Pandemic
Protection Act of 2020".

SECTION 2. Declaration of Policy. — It is hereby the declared policy of the
State to protect and promote the right to health of the people and instill health
consciousness among them. The State recognizes pandemics and other public
health emergencies as threats to public health and national security, which can
undermine the social, economic, and political functions of the State. It shall protect
the people from pandemics and other public health emergencies. To this end, the
State shall:

(a) adopt efficient and effective measures that will prevent the overburdening
of the healthcare system;

(b) develop the healthcare and manufacturing industries and preserve and
generate employment during the crisis;

(c) ensure adequate and readily available supply of critical products and
services for the health workers and the public;

(d) protect the interest of the consumers and establish standards of conduct
for business and industry; and

(e) build strong partnership with the private sector and other stakeholders to
deliver these measures quickly and efficiently.


SECTION 3. Coverage. This Act shall cover the manufacture or production of
critical products, including repurposing of existing manufacturers, and supply of
critical services. This also covers their entire supply chain including their raw
materials, packaging and its raw materials. The benefits under this Act shall be in
addition to the incentives provided under existing laws.

SECTION 4. Definition of Terms. For the purposes of this Act, the following
definitions shall apply:

(a) Accreditation refers to the process of officially recognizing a person or
entity under this Act;

(b) Critical Products refer to medicines, vaccines, personal protective
equipment, ventilators and such other supplies or equipment, including its
raw materials, required to address the pandemic as may be determined
by the Department of Health (DOH) and other relevant government
agencies;

(c) Critical Services refer to services required for the manufacture, production
and distribution of critical products. This shall also include testing
laboratories; waste management, including but not limited to waste
segregation, storage, collection, sorting, treatment and disposal services;
and other services as may be determined by the DOH and other relevant
government agencies.

(d) Manufacturer refers to an enterprise duly accredited or registered under
Section 6 hereof, engaged in the production of critical products including
preparation, processing, compounding, formulating, filling, packing,
repacking, altering, ornamenting, finishing and labeling;

(e) Packaging refers to material used to wrap or protect critical products;

() Producer refers to an enterprise that manufactures, makes, grows, or
produces critical products; and

(g) Raw Material refers to materials and inputs from which a critical product
and its packaging is made.

SECTION 5. Conformity to Standards. The materials, products, processes,
and services shall conform and comply with the guidelines on the standards and
requirements issued by the relevant government agencies such as, but not limited to,
the DOH, Food and Drug Administration (FDA), and Bureau of Philippine Standards.
In the case of other critical services, the equipment and technologies and services
should be approved by the Department of Environment and Natural Resources, DOH
or other concerned regulatory agencies

For this purpose, the relevant government agencies shall prioritize the
facilitation of the issuance of licenses and other requirements to manufacturers
covered by this Act.


SECTION 6. Accreditation. Prior to the availment of benefits herein, the
manufacturers and producers shall apply for accreditation with the Department of
Trade and Industry (DTI), through the Board of Investments (BOI). Provided That, in
lieu of DTFBO! accreditation, manufacturers that are registered with other
Investment Promotion Agencies (IPAs) shall directly apply for authority to import with
the concerned IPA.

SECTION 7. Exemption from Custom Duties, Value Added Tax (VAT),
Other Taxes and Fees. Regardless of the country of origin, importation under this
Act of the capital equipment, spare parts and accessories, raw materials, packaging
and its raw materials, or any articles needed in the supply chain of the critical
products or services shall be exempt from custom duties, VAT, other taxes and fees
such as import processing fees and fees imposed by the Bureau of Customs, FDA
and other relevant agencies.

SECTION 8. Exemption from VAT on Local Sales. The exemption from
VAT shall apply to the sale of critical products and services. The DTI-BOI shall
provide the Bureau of Internal Revenue (BIR) the list of VAT-exempt critical products
or services, including the new and/or additional critical products covered under this
Act. The list of VAT-exempt critical products or services shall be posted in the BIR
website through a Revenue Memorandum Circular.

Further, in accordance with the invoicing requirements, the word “VAT-
EXEMPT” shalll prominently be indicated in the invoice issued for the sale of critical
products

SECTION 9. Suspension of Export Requirement. The export requirement
imposed under the laws administered by relevant IPAs may be suspended by the
DTI-BOI to satisfy national interest or in an emergency situation. The export
enterprises that manufacture the critical products or render critical services shall
supply up to eighty percent (80%) of their daily production or service to government
institutions, hospitals, and private establishments in the country for local or domestic
use.

The local sales of critical products and services of such export enterprises
shall be deemed and treated as “export sales” in compliance of their export
requirement. As such, the corresponding treatment, exemption on duties, taxes and
fees, and other incentives warranted under the existing laws governing these export
enterprises shall continue to apply. Further, if such export enterprises are located in
special economic zones with status of separate customs territory under relevant
laws, such local sales shall likewise be exempt under Sections 7 and 8 hereof. For
this purpose, the DTI-BOI or concerned IPA shall monitor the compliance of said
export enterprises.

The exemption on duties, taxes and fees under this Section shall subsist for a
period of three (3) years after the declaration by the World Health Organization that
the pandemic has ended

SECTION 10. Procurement of Critical Products by the Government. To
ensure adequate and responsive supply of critical products and supplies, the


government, as the procuring entity shall give preference and procure critical
products manufactured, produced or made in the Philippines; Provided, that the
award shall be made to the lowest domestic manufacturer-bidder provided the bid is
not more than twenty percent (20%) in excess of the lowest foreign bid; Provided
further, that it has secured from the DTI a certification that the products, articles,
materials, or supplies are produced, made or manufactured in the Philippines.

Private enterprises are also encouraged to source their requirements for
critical products from the local manufacturers.

SECTION 11. Relocation or Expansion of Manufacturing Enterprises in
the Philippines. Manufacturers or producers of critical products that will relocate or
expand operations in the Philippines are qualified to avail of the exemptions under
this Act provided that they meet the requirements prescribed herein.

SECTION 12. Synchronized and Integrated Government Approach. All
departments, bureaus, agencies or instrumentalities of the government shall ensure
the implementation of this Act by the agencies concerned in a synchronized and
integrated manner. No government body shall adopt any policy or take any course of
action contrary to or inconsistent with this Act.

SECTION 13. Funding. An amount not exceeding One Billion Pesos
(PhP1,000,000,000.00) is hereby allocated to the DTI-BOI to operationalize the
mechanisms contained in this Act.

SECTION 14. Implementing Rules and Regulations (IRR). The DTI and
BO! shall promulgate the rules to implement this Act.

SECTION 15. Repealing Clause. All laws, issuances, orders, rules and
regulations, or parts thereof, which are contrary or inconsistent with this Act are
hereby repealed, amended or modified accordingly.

SECTION 16. Separability Clause. If any provision of this Act is declared
invalid or unconstitutional, the other provisions not affected thereby shall remain
valid and subsisting.

SECTION 17. Effectivity Clause. This Act take shall effect immediately upon
its publication in a newspaper of general circulation or in the Official Gazette:
Provided that, Sections 7 and 8 shall apply to all transactions during the effectivity of
Republic Act No. 11469. Except for Section 9 under this Act, Sections 7 and 8 shall
terminate upon declaration by the President that this public health emergency has
ceased to exist.

SECTION 18. Applicability. This Act shall apply and shall remain in force
and effect during the existence of a pandemic of national and/or intemational
concerns as declared by the Secretary of Health, or during state of public health
emergency as declared by the President.