MANILA, Philippines — In a major move to lower healthcare costs for Filipinos, the Bureau of Internal Revenue (BIR) has expanded the list of medications exempted from the 12-percent value-added tax (VAT).
The new directive, Revenue Memorandum Circular No. 27-2026, covers an additional 21 medicines, bringing the total number of VAT-exempt drugs for chronic and serious illnesses to 2,263. The expansion follows a formal endorsement from the Food and Drug Administration (FDA) earlier this year.
The updated list focuses heavily on treatments for critical conditions, providing significant financial relief to patients and their families:
- Cancer: Exempted medicines increased to 702 (up from 675).
- Diabetes: Exempted medicines increased to 327 (up from 323).
- Tuberculosis: Exempted medicines increased to 76 (up from 75).
- Mental Health: Remains stable at 300 exempted medications.
However, the BIR noted slight reductions in other categories due to updated FDA guidelines. Hypertension treatments were reduced to 535, high cholesterol drugs to 171, and kidney disease medications to 152.
BIR Commissioner Charlie Mendoza stated that the issuance is part of a broader government effort to ease the cost of living during the current global energy crisis.
- Price Freeze: Health Secretary Teodoro Herbosa recently announced that there will be no increase in overall medicine prices until at least June 2026.
- Logistics Challenges: While most medicines do not pass through the conflict-ridden Strait of Hormuz, the Department of Health (DOH) is monitoring prices closely as rising fuel and shipping costs via alternative routes may eventually put upward pressure on pharmaceutical retail prices.
- Monitoring Efforts: The DOH has intensified its price watch for 10 “key” medicines specifically covering hypertension, diabetes, and antibiotics to prevent exploitation during the economic emergency.
The VAT exemptions are implemented under the TRAIN Act (Republic Act No. 10963) and the CREATE Act (Republic Act No. 11534). These laws mandate that the government periodically review and update the list of tax-exempt essential drugs to ensure they remain relevant to the health needs of the population.
Patients and healthcare providers can access the full, updated list of VAT-exempted medicines on the official BIR website.