Domestic PPE industry seeking tax incentives

CLOTHING manufacturers that have repurposed their facilities to produce personal protective equipment (PPE) for the domestic market are asking the government for tax breaks, and lobbied to have such taxes applied to importers.

The Confederation of Philippine Manufacturers of PPE (CPMP) has been producing face masks and developing medical-grade coveralls for health workers dealing with the coronavirus disease 2019 (COVID-19).

The five firms that make up CPMP have a total production capacity of 57 million face masks and three million pieces of coveralls and isolation gowns per month, the group said in a statement Thursday.

They are asking for exemptions from duties, taxes, fees, and value-added tax on domestic sales of medical-grade PPE under the Bayanihan to Recover as One Act (Bayanihan II).

They are also asking that these taxes and fees be applied to imported PPE, which they added should be laboratory-tested by facilities accredited by the Food and Drug Administration.

The group asked for retroactive application of import duty exemptions on capital equipment and value-added tax exemptions on domestic sales of medical-grade PPE that are treated as exports, to cover the period after the expiry of the Bayanihan to Heal as One Act, which had exempted healthcare goods from import duties.

“The government, as the procuring entity, (should) give priority and procure critical products manufactured, produced or made in the Philippines,” they said.

CPMP’s are Medtecs International Corp. Ltd., EMS Components Assembly, Inc., Reliance Producers Cooperative, Luen Thai International Group Philippines, Inc., and Tacca Industries Pty Ltd.

The group said that it is asking for fiscal policy reforms to help the PPE manufacturing industry grow and be sustainable.

“We need to level off the playing field from the influx of substandard PPE. We commit to producing these medical-grade PPE compliant with FDA (Philippines) regulations, certified to have passed by established international testing facilities for PPE, and available at competitive prices that can easily compete against imports,” they said.

The five firms’ investments in PPE manufacturing are valued at $35 million (P1.7 billion). They said that their operations account for around 7,450 jobs.

CPMP is an affiliate of the Confederation of Wearable Exporters of the Philippines, which co-signed the statement. — Jenina P. Ibañez