EconomyEditor's PickPangilinan pushes for passage of bill incentivizing local medical supply manufacturers

November 1, 2021

SENATOR Francis “Kiko” N. Pangilinan on Monday pushed for the passage of a measure that will provide tax perks to local manufacturers of medical supplies, noting that this will lessen costs and increase jobs.

The proposed Pandemic Protection Act, contained in Senate Bill 1759 and House Bill 7165, gives incentives to local manufacturers and producers of personal protective equipment (PPE), test kits, ventilators, face shields, and face masks, among others.

“As much as we are protecting the welfare of our frontliners, we must not forget our backliners who make critical COVID-19 supplies available,” he said in a statement in Filipino.

“Government should encourage them to stay the course,” he added. “If factories are operating, Filipinos have jobs.”

Under the proposed measure, importation of capital equipment, raw materials, and other necessary articles is exempt from customs duties, value-added tax (VAT), other taxes, and fees.

If enacted, it will exempt the local sales of critical products and services from VAT. It will also require businesses that produce and export critical products or services to supply up to 80% of their daily production to government institutions, hospitals, and private establishments for local and domestic use.

The bill is currently pending in both houses.

When the pandemic broke out last March 2020, Mr. Pangilinan said that the country lacked locally manufactured options for medical supplies. “We were forced to import and paid more for the COVID-19 supplies, and thus hurting our budget, the people’s money.”

During an earlier Blue Ribbon Committee hearing, members of the Coalition of Philippine Manufacturers of PPE (CPMP) and the Confederation of Wearables Exporters of the Philippines also pushed for the passage of the Pandemic Protection Act.

CPMP Executive Director Rosette Carrillo told the hearing that local exporters are unprotected from importers whose “predatory pricing endangers healthcare workers as well as the Philippine economy.”

She cited that the budget department’s procurement service would demand short-term deliveries for high volume, high value orders of PPE, which disadvantaged local manufacturers.

She explained that before local producers could begin manufacturing, raw materials had to pass international testing standards which had to be done abroad since there is no Food and Drug Administration-accredited testing facility in the Philippines. They also had to submit the finished product for testing.

“This two-tiered process would add four weeks to their production cycle,” she said. “Meanwhile, traders or importers did not have to bother with any of this.”

“The local exporters would simply be no match to foreign traders or importers that merely repack expired PPEs which also allowed them to advance easily in the bidding process,” she added.

Ms. Carillo suggested setting up a stockpiling program that will allow the country to swiftly respond in the event of a public health emergency, and increase or at least bring back jobs that were lost during the pandemic. — Alyssa Nicole O. Tan

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