Drugstores remain clueless as to how to recover losses

CEBU, Philippines - As senior citizens enjoy the 20 percent discount on purchase of medicines granted to them by the government, the drugstores on the other hand are still waiting for the government to fulfill its promise to help them recover the losses they incur in granting the incentive.

Robinson Uy, president of the Drugstore Association of the Philippines (DSAP) Cebu chapter, said the guidelines to help drugstores recover the cost as stated in the implementing rules and regulations (IRR) of Republic Act 9994, otherwise known as the Expanded Senior Citizens Act of 2003, have not been laid out yet. This is so, despite the full implementation of the law.

“The drugstore association is advised that for the meantime, we just honor the law and give out (the discount) but as to how we can recover the losses in taxes as well as our capital, we are still waiting,” he told The FREEMAN.

RA 9994 took effect earlier this month. The law exempts senior citizens from value-added tax (VAT) aside from granting them a 20-percent discount on purchases of food, medicine, as well as other services in restaurants and movie houses.

Any person who refuses to grant these incentives to senior citizens in their establishment may be imprisoned for a year and fined up to P100,000. Repeat offenders may be imprisoned between two to six years and fined P200,000.

Uy said that the law was implemented “without proper consultations with the affected sector.” Despite this, drugstores are resting their hope on one of the required provisions of the law"s IRR that requires the Department of Health (DOH) to issue guidelines as to the burden sharing, which would mandate drug manufacturers to help shoulder the discounts given to the senior citizens.

The IRR also states that the Bureau of Internal Revenues (BIR) should also issue guidelines as to how the outlets can recoup the value-added-tax (VAT)

“To date, there are no guidelines yet from DOH and BIR. While the law is already being forced to be implemented in the drugstore, the outlet has no recourse but to absorb the losses. As to how long the drugstores will survive, we don't know. The government should be reminded that drugstores are also business enterprises and should not be treated as the shock absorber for government's charity,” he said.

By December this year, senior citizens will also get a five-percent discount on their electric and water bills, provided that the meters for these utilities are registered under their names and consumption is below 100 kilowatt hours for electricity and 30 cubic meters for water.

Energy Regulatory Commission (ERC) executive director Francis Saturnino said in a report that they are now formulating the supplemental guidelines on cost recovery once the discount for senior citizens is implemented.