Pangilinan bats for giving tax cuts to Filipino makers of PPEs, test kits, other medical supplies
MANILA, Philippines — Sen. Kiko Pangilinan on Friday urged the government to give tax exemptions to Filipino companies that make supplies necessary to the country's COVID-19 response.
According to Pangilinan, this would incentivize local companies to manufacture surgical masks, personal protective equipment, test kits, ventilators and other medical products, ensuring that the country will have an adequate supply of the necessary items.
"The [COVID-19 crisis] revealed that these critical medical supplies are not being made in the Philippines. At the onset of the pandemic, the supply of these critical products and [their] raw materials became scarce, inaccessible and expensive," he said in a mix of Filipino and English.
Pangilinan said he filed Senate Bill 1759, or the Pandemic Protection Act of 2020, "in order to avoid a similar dilemma in the future."
Under the proposed measure, the "importation of capital equipment, spare parts and accessories, raw materials, and other needed articles" will be exempt from custom duties, value added tax, other taxes and fees, Pangilinan said.
"When it becomes law, the bill shall also exempt the local sales of critical products and services from value-added tax (VAT); this VAT-exempted list shall be posted on the website of the Bureau of Internal Revenue (BIR) through a Revenue Memorandum Circular."
In addition to this, the measure would 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."
As it stands, Pangilinan said some local manufacturers, who agreed to the Board of Investments' request that they repurpose their operations, are still competing with what he called substandard imported product, fake imported PPEs and imported PPEs that are favored to those that are FIlipino-made.
Price of imported tests dropped by 26%
On July 18, Pangilinan along with Senate Minority Leader Frank Drilon and Sen. Risa Hontiveros urged the government to use lower-cost and locally-produced test kits developed by the University of the Philippines National Institutes of Health instead of relying on imported brands.
"The country is ramping up COVID-19 testing, but locally manufactured, world-class P1,320 PCR test kits are gathering dust in laboratories due to the inaction of Health Secretary Francisco Duque III,” the minority senators' joint statement read.
The Filipino-made test kits funded by the Department of Science and Technology are cheaper compared to Chinese and Korean test kits which cost more than double, between P4,000 and P8,000.
Pangilinan noted that hours after their statement, the Department of Health approved the use of the locally made test kits "and the price of imported test kits dropped by 26%" as a result.
"This proposed measure also orders the prioritization of Filipino-made products. And because experts say it will be a while before a vaccine for COVID-19 becomes available, it must be ensured that surgical masks, PPEs, test kits and medicine are being made here in the Philippines," Pangilinan further said in Filipino. — Bella Perez-Rubio with a report from Ratziel San Juan
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