NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
of ilu-
72 SEP 14 P 5 *10
SENATE
INTRODUCED BY SENATOR RISA HONTIVEROS
AN ACT
PROVIDING FOR THE DEVELOPMENT OF HEALTHCARE AND MANUFACTURING 
INDUSTRIES IN THE PHILIPPINES TO STRENGTHEN THE COUNTRY'S 
READINESS AND PROTECTION AGAINST PANDEMICS AND PROVIDING FUNDS 
THEREFORE
EXPLANATORY NOTE
The COVID-19 pandemic caught us by surprise with the absence of demonstrated 
capacity to locally manufacture and to adequately supply critical healthcare products 
needed to respond to Covid-19 such as personal protective equipment (PPE) and testing 
kits.
With the globai high demand for and low supply of these critical healthcare 
products, including its raw materials, the government was prompted to call on key 
Industry players and manufacturers to repurpose their respective manufacturing 
operations to produce and supply locally the much-needed PPE, especially for our frontline 
health workers. Some local manufacturers heeded the call, yet they find themselves 
unfairly competing with imported products with questionable source, quality, standards, 
safety and use.
COVID-19 taught us the need to have our very own supply base of critical 
healthcare products, such as PPEs, and to be mindful of its quality and safety standards 
to protect our consumers and healthcare workers.
To meet these needs, this measure seeks to support the development of the local 
healthcare and manufacturing industry in the country to strengthen its readiness and be 
protected against pandemics by providing them incentives to build a strong local supply 
base and by promoting preference of locally made and produced quality heaithcare 
products. This measure shall also provide opportunity for local manufacturers and 
industry piayers to preserve and create jobs for the Fiiipinos in the future.
It is for these reasons that the passage of this biil is earnestly sought.
RISA HONTIVEROS V 
Senator


NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
0( tlje &«' ft«r?
*22 SEP 14 P5-10
SENATE
S.B. No. 1315
RlXElVtDBY.,._r
INTRODUCED BY SENATOR RISA HONTIVEROS
AN ACT
PROVIDING FOR THE DEVELOPMENT OF HEALTHCARE AND MANUFACTURING 
INDUSTRIES IN THE PHILIPPINES TO STRENGTHEN THE COUNTRY'S 
READINESS AND PROTECTION AGAINST PANDEMICS AND PROVIDING FUNDS 
THEREFORE
Be it enacted by the Senate and House of Representatives of the Phiiippines in Congress 
assembied:
1 
Section 1. Short Tide. - This Act shail be known as the "Pandemic Readiness and
2 
Protection Act".
3 
Sec. 2. Deciaration of Policy. - It is hereby the declared policy of the State to
4 
protect and promote the right to health of the people and instill health consciousness
5 
among them.
6 
The State recognizes pandemics and other public health emergencies as threats
7 
to public health and national security, which can undermine the social, economic, and
8 
political functions of the State. It shall protect the people from pandemics and other
9 
public health emergencies. To this end, the State shall:
10 
a. adopt efficient and effective measures that will prevent the overburdening
11 
of the healthcare system;
12 
b. develop the healthcare and manufacturing Industries and preserve and
13 
generate employment during the crisis;
14 
c. ensure adequate and readily available supply of critical products and
15 
services for the health workers and the public;
16 
d. protect the interest of the consumers and establish standards of conduct
17 
for business and industry; and
18 
e. build strong partnership with the private sector and other stakeholders to
19 
deliver these measures quickly and efficiently.
20 
Sec. 3. Coverage. - This Act shall cover the manufacture or production of critical
21 
products, including repurposing of existing manufacturers, and supply of critical services.
1


. t -! li U
1 
This also covers their entire supply chain including their raw materials, packaging
2 
and its raw materials. The benefits under this Act shall be in addition to the incentives
3 
provided under existing laws.
4 
Sec. 4. Definition of Terms. - For the purposes of this Act, the following definitions
5 
shall apply:
6 
a. Accreditation refers to the process of officially recognizing a person or entity
7 
under this Act;
8 
b. Criticai Products refer to medicines, testing kits, vaccines, personal
9 
protective equipment, ventilators and such other supplies or equipment,
10 
including its raw materials, required to address the pandemic as may be
11 
determined by the Department of Health (DOH) and other relevant
12 
government agencies;
13 
c. Criticai Services refer to services required for the manufacture, production
14 
and distribution of critical products. This shall also include testing laboratories;
15 
waste management, including but not limited to waste segregation, storage,
16 
collection, sorting, treatment and disposal services; and other services as may
17 
be determined by the DOH and other relevant government agencies.
18 
d. Manufacturer refers to an enterprise duly accredited or registered under
19 
Section 6 hereof, engaged in the production of critical products including
20 
preparation, processing, compounding, formulating, filling, packing, repacking,
21 
altering, ornamenting, finishing and labeling;
22 
e. Packaging refers to material used to wrap or protect critical products;
23 
f. Producer refers to an enterprise that manufactures, makes, grows, or
24 
produces critical products;
25 
g. Raw Materiai refers to materials and inputs from which a critical product
26 
and its packaging is made; and
27 
h. Stockpiiing refers to the acquisition and accumulation of critical products to
28 
make them readily available and accessible.
29 
Sec. 5. Conformity to Standards, - The materials, products, processes, and
30 
services shall conform and comply with the guidelines on the standards and requirements
31 
issued by the relevant government agencies such as, but not limited to, the DOH, Food
32 
and Drug Administration (FDA), and Bureau of Philippine Standards. In the case of other
33 
critical services, the equipment and technologies and services should be approved by the
34 
Department of Environment and Natural Resources, DOH or other concerned regulatory
35 
agencies


1 
For this purpose, the relevant government agencies shall prioritize the facilitation
2 
of the issuance of licenses and other requirements to manufacturers covered by this Act.
3 
Sec. 6. Development and Promotion of Healthcare and Manufacturing Industries.
4 
- The Board of Investments (BOI) is hereby mandated to develop and promote the
5 
healthcare and manufacturing industries to strengthen the country's public health
6 
emergency preparedness and response mechanisms during the pandemic.
7
8 
Sec. 7. Accreditation. — Prior to the availment of benefits herein, the manufacturers
9 
and producers shall apply for accreditation with the Department of Trade and Industry
10 
(DTI), through the BOI. Provided That, in lieu of DTI-BOI accreditation, manufacturers
11 
that are registered with other Investment Promotion Agencies (IPAs) shall directly apply
12 
for authority to import with the concerned IPA.
13 
Sec. 8. Exemption from Custom Duties, Value Added Tax (VAT), Other Taxes and
14 
Fees. - Regardless of the country of origin, importation under this Act of the capital
15 
equipment, spare parts and accessories, raw materials, packaging and its raw materials,
16 
or any articles needed in the supply chain of the critical products or services shall be
17 
exempt from custom duties, VAT, other taxes and fees such as import processing fees
18 
and fees imposed by the Bureau of Customs, FDA and other relevant agencies. Provided,
19 
further, that the exemption from import duties, taxes and other fees on the importation
20 
of equipment and supplies that are already considered as finished goods shall only apply
21 
upon determination by the DOH or DTI on the non-availability or insufficiency of local
22 
supply of the said equipment and supplies.
23 
Sec. 9. Exemption from VAT on Local Sales. -The exemption from VAT shall apply
24 
to the sale of critical products and services. The DTI-BOI shall provide the Bureau of
25 
Internal Revenue (BIR) the list of VAT-exempt critical products or services, including the
26 
new and/or additional critical products covered under this Act. The list of VAT-exempt
27 
critical products or services shall be posted in the BIR website through a Revenue
28 
Memorandum Circular.
29 
Further, in accordance with the invoicing requirements, the word "VAT-EXEMPT"
30 
shall prominently be indicated in the invoice issued for the sale of critical products.
31 
Sec. 10. Suspension of Export Requirement - The export requirement imposed
32 
under the laws administered by relevant IPAs may be suspended by the DTI-BOI to satisfy
33 
national Interest or in an emergency situation. The export enterprises that manufacture
34 
the critical products or render critical services shall supply up to eighty percent (80%) of
35 
their daily production or service to government institutions, hospitals, and private
36 
establishments in the country for local or domestic use.


1 
The local sales of critical products and services of such export enterprises shail be
2 
deemed and treated as "export sales" in compliance of their export requirement. As such,
3 
the corresponding treatment, exemption on duties, taxes and fees, and other incentives
4 
warranted under the existing laws governing these export enterprises shall continue to
5 
apply. Further, if such export enterprises are located in special economic zones with status
6 
of separate customs territory under relevant laws, such local sales shall likewise be
7 
exempt under Sections 7 and 8 hereof. For this purpose, the DTI-BOI or concerned IPA
8 
shall monitor the compiiance of said export enterprises.
9 
The exemption on duties, taxes and fees under this Section shail subsist for a
10 
period of three (3) years after the declaration by the World Health Organization that the
11 
pandemic has ended.
12 
Sec. 11. Procurement of Critical Products by the Government - To ensure
13 
adequate and responsive supply of critical products and services, the government, as the
14 
procuring entity shall strictly implement Section 43, Article XII of Republic Act 9184,
15 
otherwise known as the Government Procurement Reform Act' particularly to give
16 
preference to the purchase of domestically-produced and manufactured goods, supplies
17 
and materials that meet the specified or desired quality.
18 
In the interest of availability, efficiency and timely delivery of critical products and
19 
services under this Act, the Department of Budget and Management (DBM)-Procurement
20 
Service or the concerned procurement entity shall make the award to the lowest domestic
21 
manufacturer-bidder notwithstanding that its bid is up to fifteen percent (15%) in excess
22 
of the lowest foreign bid;
23 
Provided, that it secures from the DTI a certification that the articles forming part
24 
of its bid are substantially composed of articles, materials, or supplies grown, produced,
25 
or manufactured in the Philippines.
26 
Private enterprises are also encouraged to prioritize local manufacturers to source
27 
their requirements for critical products.
28 
Sec. 12. Stockpiling of Critical Products. -The DOH and the DBM, in coordination
29 
with DTI and other relevant agencies, shall stockpile necessary critical products to
30 
prepare for an imminent or potential pandemic or public health emergency. The DOH and
31 
DBM shall procure the critical products and services in accordance with the preceding
32 
Section.
33 
Sec. 13. Relocation or Expansion of Manufacturing Enterprises in the Philippines.
34 
- Manufacturers or producers of critical products that will relocate or expand operations
35 
in the Philippines are qualified to avail of the exemptions under this Act provided that
36 
they meet the requirements prescribed herein. The manufacturing activities covered


1 
under this Act shall be included as a strategic preferred area in the Investment Priorities
2 
Plan under Executive Order No. 226, otherwise known as the Omnibus Investments Act
3 
of1987' as amended. The strategic preferred areas listed therein shall be granted pioneer
4 
incentives or the maximum incentives allowed under existing laws.
5 
Nothing in this Act or any law that may be created to the contrary shall diminish,
6 
derogate, nor limit in whatever manner the grant and entitlement to incentives by
7 
qualified activities herein, including the option to avail of future incentives that are more
8 
relevant and generous.
9 
Sec. 14. Synchronized and Integrated Government Approach. - All departments,
10 
bureaus, agencies or instrumentalities of the government shall ensure the implementation
11 
of this Act by the agencies concerned In a synchronized and integrated manner. No
12 
government body shall adopt any policy or take any course of action contrary to or
13 
inconsistent with this Act.
14 
Sec. 15. Funding. - The amounts necessary for the implementation of this Act
15 
shall be taken from current appropriations of agencies concerned. Thereafter, such
16 
amount as may be necessary for the implementation of this Act shall be included in the
17 
General Appropriation Act.
18 
Sec. 16. Penaity for Government Officiai or Empioyee. - Any government official
19 
or employee who fails to implement Section 11 of this Act shall be penalized, after due
20 
process, by a fine equivalent to the officiafs or employee's basic salary for a period of
21 
one (1) month to six (6) months or by suspension from government service for not more
22 
than one (1) year, or both, in addition to any criminal and administrative penalties
23 
imposable under existing laws.
24 
Sec. 17. Appiicabiiity. — This Act shall apply and shall remain In force and effect
25 
during the existence of a public health emergency of International concerns or pandemic
26 
as declared by the World Health Organization, a Public Health Emergency as declared by
27 
the President, and/or an epidemics of national and/or international concerns as declared
28 
by the Secretary of Health.
29 
Sec. 18. Impiementing Ruies and Reguiations (IRR). - The DTI and BOI shall
30 
promulgate the rules to implement this Act within sixty days (60) after the approval of
31 
this Act, prepare and issue the necessary guidelines to implement the provisions of this
32 
Act.
33 
Sec. 19. Repeating Ciause. — All laws, issuances, orders, rules and regulations, or
34 
parts thereof, which are contrary or inconsistent with this Act are hereby repealed,
35 
amended or modified accordingly.


1 
Sec. 20. Separability Clause. - If any provision of this Act is declared invalid or
2 
unconstitutional, the other provisions not affected thereby shall remain valid and
3 
subsisting.
4 
Sec. 21. Effectivity Clause. - This Act take shall effect immediately upon its
5 
publication in a newspaper of general circulation or in the Official Gazette: Provided that,
6 
Sections 7 and 8 shall apply to all transactions during the effectivity of Republic Act No.
7 
11469. Except for Section 9 under this Act, Sections 7 and 8 shall terminate upon
8 
declaration by the President that this public health emergency has ceased to exist. 
Approved,