In a significant move to lower healthcare costs, the Bureau of Internal Revenue (BIR) has officially released an expanded roster of medicines that will no longer be subject to the 12% value-added tax (VAT). This action is set to make a wide range of essential and life-saving drugs more affordable for millions of Filipino patients.
Official Publication of the Updated VAT-Exempt List
The BIR formalized this major update through Revenue Memorandum Circular (RMC) 108-2025, issued recently. The circular serves to publish the full text of an endorsement letter from the Food and Drug Administration (FDA) dated October 16, 2025. The updated list implements provisions under the TRAIN Law (Republic Act 10963) and the CREATE Act (Republic Act 11534), which mandate VAT exemptions on specific drugs to ensure they remain accessible.
The government's effort to shield patients from the financial strain of medical treatment is not new. Prior to this latest circular, the BIR had issued several updates to the list over the past few years:
- RMC 81-2021 marked the initial implementation, covering medicines for cancer, diabetes, hypertension, mental illness, tuberculosis, and kidney disease.
- RMC 119-2022 later expanded the coverage for cancer and diabetes treatments.
- RMC 42-2023 added more drugs for mental illness and kidney disease.
- RMC 93-2024 made a key addition by including medications for high cholesterol for the first time.
Each step reflects a deliberate policy to widen the safety net for patients requiring long-term care.
A Major Leap in Coverage: Key Numbers
RMC 108-2025 represents the most substantial expansion to date, significantly increasing the count of VAT-exempt drugs across seven major illness categories. The updated list now provides relief for patients needing medications for the following conditions:
- Cancer: 675 drugs
- Hypertension: 542 drugs
- Diabetes: 323 drugs
- Mental Illness: 300 drugs
- High Cholesterol: 173 drugs
- Kidney Disease: 154 drugs
- Tuberculosis: 75 drugs
This brings the total to over 2,200 specific medicines that are now more affordable due to the removal of the VAT burden. The BIR has directed the public to access the complete and detailed list on the official website of the Food and Drug Administration (FDA).
Aligning Tax Policy with Public Health Priorities
The dramatic expansion of the VAT-exempt medicine list underscores the government's continuing commitment to align fiscal policy with urgent public health needs. By removing the tax on these critical drugs, the state aims to directly reduce the out-of-pocket expenses of patients and their families, many of whom face prolonged and expensive treatment regimens.
This policy is a concrete step toward promoting more equitable access to healthcare. It ensures that financial constraints are less of a barrier to obtaining maintenance medicines for chronic conditions and life-saving drugs for severe illnesses. The move is widely seen as a necessary intervention to support the well-being of Filipinos, especially as the country continues to strengthen its healthcare system.
Patients, caregivers, and healthcare providers are advised to review the newly published list to fully understand which medications qualify for the VAT exemption and to ensure they benefit from the intended price reductions.
