NINETEENTH CONGRESS OF THE } 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE 
S. No. ^06
of tU? ...
•22 JUL 12 P2--07
RECEiVf:D BV.
Introduced by SENATOR FRANCIS "TOL" N. TOLENTINO
AN ACT
PROVIDING INCENTIVES TO PHARMACEUTICAL COMPANIES ENGAGED IN 
THE DOMESTIC MANUFACTURE OF PEDIATRIC VACCINES AND 
MEDICINES, AMENDING FOR THE PURPOSE SECTION 109 OF THE 
NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED
Explanatory Note
The Philippines is ranked as the 11th most attractive pharmaceuticals market 
based on the 2019 report of BioSpectrum Asia Magazine. It is forecasted that by the 
year 2024, the total pharmaceutical market will be valued at USD 4.17 Billion or Php 
216 Billion. Consumer Health Expenditure is growing with double-digit growth in the 
last three years with an average growth of 11%.1
While the pharmaceutical industry in the country is currently dominated by 
trans-national companies, domestic companies are posting a strong competition 
specifically in the sale of generic drugs. Almost all aspects of the entire value chain 
of pharmaceutical companies can be found in the country - from production to 
distribution to retail. However, the Philippines' pharmaceutical exports have not 
grown as fast as those in neighboring countries.2
1 https://boi.gov.pli/philippines-remains-an-attractive-pharma-market-govt-vows-to-support-further-
growth-of-the-industry/
2 Ibid.


In order to address this, it is important to provide additional incentives to 
pharmaceutical companies in order to encourage the local production of medicines 
and vaccines. For Instance, incentives for the domestic manufacture of pediatric 
vaccines and medicines will greatly benefit the national immunization program of the 
Department of Health under Republic Act No. 10152 or the "Mandatory Infants and 
Children Health Immunization Act," and make vaccines and medicines more 
accessible for Filipino families. Aside from implementing the State policy to protect 
and promote the right to the highest standard of health for infant and children, 
these incentives are aimed at strengthening the local pharmaceutical industry and 
encouraging the export of locally manufactured pediatric vaccines and medicines.
This bill proposes an exemption from Value Added Tax (VAT) on the sale or 
Importation of supplies, goods, and services necessary for the manufacture in the 
Philippines of pediatric vaccines and medicines.
In the light of the foregoing, the passage of this bill is earnestly sought.
TOL" N. TOLENTINO


NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE 
S. No. 40R
,iVhv''(i0fji£(> 0f iJ)C ^ 
>. tiVp
*22 JUL 12 P2 -07
RHCEiVf DI;
Introduced by SENATOR FRANCIS "TOL" N. TOLENTINO
1 
AN ACT
2 
PROVIDING INCENTIVES TO PHARMACEUTICAL COMPANIES ENGAGED IN
3 
THE DOMESTIC MANUFACTURE OF PEDIATRIC VACCINES AND
4 
MEDICINES, AMENDING FOR THE PURPOSE SECTION 109 OF THE
5 
NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED
Be it enacted by the Senate and the House of Representatives of the Phiiippines in 
Congress assembied:
6 
Section 1. Section 109 of the National Internal Revenue Code of 1997, as
7 
amended, is hereby further amended to read as follows:
8 
"SEC. 109. Exempt Transactions. -
9 
(1) Subject to the provisions of Subsection (2) hereof, the following
10 
transactions shall be exempt from the value-added tax;
11 
"x X X
12 
"(CC) SALE OF OR IMPORTATION OF SUPPLIES, GOODS, AND
13 
EQUIPMENT DIRECTLY NECESSARY FOR THE MANUFACTURE IN THE
14 
PHILIPPINES OF PEDIATRIC VACCINES AND MEDICINES:
15 
PROVIDED, THAT THE DEPARTMENT OF HEALTH (DOH) SHALL
16 
ISSUE A LIST OF PEDIATRIC VACCINES AND MEDICINES FOR THIS
17 
PURPOSE WITHIN SIXTY (60) DAYS FROM THE EFFECTIVITY OF
18 
THIS ACT.


1 
"[(€G)] (DD) Sale or lease of goods or properties or the performance
2 
of services other than the transactions mentioned in the preceding
3 
paragraphs, the gross annual sales and/or receipts do not exceed the amount
4 
of Three million pesos (P3,000,000.00)."
5 
Section 2. Separability Clause. - If any portion or provision of this Act is
6 
declared void and unconstitutional, the remaining portions or provisions hereof shall
7 
not be affected by such declaration.
8 
Section 3. Repealing Clause.- All laws, decrees, orders, rules and
9 
regulations, or portions thereof inconsistent with this Act are hereby repealed,
10 
amended, or modified accordingly.
11 
Section 4. Eifectivity. - This Act shall take effect after fifteen (15) days
12 
from its publication in the Official Gazette or in a newspaper of general circulation.
Approved,