MANILA, Philippines — Moving to insulate the country’s most vulnerable households from surging out-of-pocket medical bills during an extended high-inflation cycle, progressive lawmakers have introduced a sweeping healthcare tax reform bill. Members of the Makabayan bloc have formally filed House Bill No. 9564 to completely strip the 12-percent value-added tax (VAT) off all essential drugs and medicines nationwide.
The proposed legislation aims to treat access to life-saving pharmaceuticals as a basic human right rather than a taxable consumer transaction.
The bill addresses major limitations within the active tax code. Under current laws—specifically the TRAIN Law and the CREATE Act—VAT exemptions are strictly ring-fenced around only seven critical medical categories. Rep. Antonio Tinio (ACT Teachers) highlighted the stark discrepancy between state procurement and patient realities:
[ THE PHARMACEUTICAL TAXATION GAP ]
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[ ACTIVE CREATE ACT MOAT ] [ THE TAXED MAJORITY ]
• **Exempt Portfolio:** Only **2,263 specific medicines** • **Taxable Portfolio:** Roughly **47,737 medicines**
qualify for 12% VAT exemption as of the Bureau of remain fully taxed under the standard retail regime.
Internal Revenue’s (BIR) April 2026 memorandum. • **The Scope:** Basic household medical essentials like
• **The Narrow Focus:** Limited exclusively to chronic **paracetamol, daily multivitamins, and common antibiotics**
illnesses: cancer, diabetes, hypertension, high are hit with the full 12% tax markup at the counter.
cholesterol, mental illness, tuberculosis, and kidney disease.
Tinio stressed that the 12-percent markup leaves poor families facing an impossible dilemma when illness strikes: “They are forced to choose: buy medicine or eat?”
The explanatory note of House Bill No. 9564 details a troubling regional pricing trend, citing that the lack of broad state tax insulation forces Filipinos to shoulder an extraordinary financial burden compared to their Asian peers:
[ THE REGIONAL OUT-OF-POCKET HEALTH BURDEN ] │ ▼[ Price Disparity Shock ] ──► Filipinos pay **259% to 1,600% more** for standard medicines than patients in India, Pakistan, and Thailand. │ ▼[ Retail Market Monopoly ] ──► Private pharmacy chains control a massive **90% of the country’s ₱216-billion** pharmaceutical market, leaving only 10% flowing through subsidised public hospitals. │ ▼[ High Out-of-Pocket Share ] ──► Citizens directly shoulder **42.7% of total health expenditures** out-of-pocket, amounting to an aggregate P615.16 billion annually.
Co-authored by Rep. Sarah Jane Elago (Gabriela Women’s Party) and Rep. Renee Co (Kabataan), the bill goes beyond standard tablet and capsule prescriptions to shield holistic recovery and specialized nutritional regimens from taxation.
| Proposed Exempt Category | Expanded Tax-Free Coverage Limits | Targeted Public Health Objective |
| Emergency Use Portfolio | Covers all drugs carrying active Compassionate Special Permits or Emergency Use Authorizations. | Guarantees instant, tax-free access to breakthrough treatments during active public health emergencies. |
| Nutritional Food & Drinks | Includes advanced formulations containing vital micronutrients and specialized medical elements. | Protects families managing dietary therapies for malnutrition, pediatric obesity, and cancer-induced muscle wasting. |
| Chronic Care Overhaul | Retains and broadens existing CREATE Act buffers while lowering the bureaucratic approval barriers. | Insulates household budgets as pharmaceutical firms adjust inventories due to global shipping logistics overhead. |
The introduction of House Bill No. 9564 coincides with a sister measure, House Bill No. 9563, which seeks to legally require the government to increase its public health spending to at least 5 percent of the national Gross Domestic Product (GDP)—equivalent to roughly ₱1.4 trillion.
As Congress navigates an intense midyear legislative calendar, the Makabayan bloc’s twin health-first proposals lay down a clear challenge to state economists: prioritize direct human relief over regressive revenue streams, ensuring that when the poorest Filipinos face a medical crisis, the state tax system acts as a protective shield rather than an added financial burden.