The Bureau of Internal Revenue has expanded the list of medicines exempt from the 12 percent value added tax, covering 2,263 drugs used to treat major illnesses and directly affecting the cost of treatment for Filipino patients.
The BIR issued Revenue Memorandum Circular No. 27-2026, publishing the updated list based on recommendations from the Food and Drug Administration. The exemption applies to medicines used for cancer, hypertension, diabetes, mental illness, high cholesterol, kidney disease, and tuberculosis. The circular replaces earlier issuances and will remain in effect until the FDA submits a new list.
The breakdown shows 702 medicines for cancer, 535 for hypertension, 327 for diabetes, 300 for mental illness, 171 for high cholesterol, 152 for kidney disease, and 76 for tuberculosis. These conditions require continuous treatment. Costs often build over time. The removal of VAT cuts a fixed 12 percent from the price of these medicines, lowering out of pocket expenses for patients.
The exemption is anchored on Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion Law and Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises Act. The Food and Drug Administration endorsed the list. The Department of Health supported the move as part of efforts to keep medicines affordable. The Department of Finance backed the immediate rollout.
BIR Commissioner Charlito Martin R. Mendoza said, “This issuance forms part of the government’s continuing efforts to help ease the cost of essential medicines, especially for Filipinos managing chronic and critical illnesses.”
The measure follows the directive of President Bongbong Marcos to improve access to healthcare, with the tax exemption positioned to ease the financial burden on patients who rely on sustained treatment.
