The Bureau of Internal Revenue (BIR) has expanded the list of value-added tax (VAT)-exempt medicines to 2,277 products, broadening tax relief for patients with chronic and life-threatening illnesses as the government seeks to make essential healthcare more affordable.
Under Revenue Memorandum Circular No. 87-2026, the BIR adopted the latest roster of VAT-exempt medicines endorsed by the Food and Drug Administration under the TRAIN Law and the CREATE Act. The updated list adds 14 medicines, extending tax exemptions across treatments for some of the country’s most prevalent diseases.
Cancer medicines account for the largest share of the VAT-exempt list with 708 products, followed by medicines for hypertension (537), diabetes (331), mental illness (300), high cholesterol (172), kidney disease (152), and tuberculosis (77).
BIR Commissioner Charlito Martin R. Mendoza said the expanded list reflects the agency’s commitment to ensuring that tax policies produce tangible benefits for Filipino families.
“The Bureau remains steadfast in implementing tax policies that directly benefit our people. By expanding the list of VAT-exempt medicines, we are helping make essential healthcare more affordable while supporting the President’s vision of a healthier and more resilient Philippines,” Mendoza said.
The move aligns with President Ferdinand R. Marcos Jr.’s directive in his 2026 State of the Nation Address to improve access to quality healthcare by reducing the cost of essential medicines.
Removing the 12 percent VAT from a wider range of medicines is expected to lower out-of-pocket healthcare expenses, particularly for patients requiring long-term treatment for chronic conditions. Health economists have long noted that medicine costs remain one of the biggest barriers to treatment adherence, making tax relief a practical way to improve access without directly subsidizing purchases.
Beyond easing household medical expenses, the expanded VAT exemption highlights how fiscal policy is increasingly being used to support broader public health objectives. For patients managing lifelong illnesses, lower medicine prices could translate into more consistent treatment, better health outcomes, and reduced financial strain over time.
