Press Release
September 22, 2009

Pia: "Remove VAT on medicines and medical equipment"

Senator Pia S. Cayetano today said the government should consider removing taxes on medicines and medical equipment to reduce the cost of health care in the country.

Cayetano issued the statement amid the threat by members of the Private Hospital's Association of the Philippines (PrHAP) to hike hospital fees in protest of the government's Maximum Drug Retail Price (MDRP) program.

"There's a lot that can be done to reduce the cost of health care in the country if only the private sector and government would work together," said the lady senator, Chairperson of the Senate Committee on Social Justice.

"Aside from the Cheaper Medicines Law, the government should consider removing the 12% Value Added Tax (VAT) on essential medicines and medical equipment. Placing VAT on essential drugs is like government earning from the sickness of our people."

She said the government should also look into reducing or removing import duties on medical equipment being shipped in by both private and public hospitals.

"It's unfortunate that private hospital owners have threatened to hold their patients hostage to high fees in protest of the cheaper medicines law. I don't agree with their method, but I think it's high time that the government work with the private sector to look for creative solutions to bring down the cost of health care."

Cayetano had earlier called on the government to pour in bigger funds for public hospitals to enable them to accommodate the expected deluge of patients amid moves. "Currently, the government has no direct control over fees being charged by private hospitals because theirs is a deregulated business. But what the government can do is increase its subsidy for public hospitals to enable these institutions to offer comparable, if not, better services that would now be accessible and affordable to ordinary Filipinos."

"Ensuring quality, affordable and accessible health services is the responsibility of the State. If private hospitals can't assure uninterrupted services to their patients, then it's imperative that the government intervene and fill up any vacuum that the PrHAP's moves may create."

"Just like in the education sector where public schools have been forced to absorb the huge volume of students forced out of private schools by higher tuition fees, the government must also upgrade and prepare our public hospitals for the expected deluge of patients. Health, after all, is a basic social service like education."

"Our health budget is way, way below the World Health Organization's recommended level that developing countries must allot a national health budget equivalent to five percent of its GDP."

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