Healthcare Resource Guide - Philippines

Philippines

Country Stats

Capital: Manila
Population: 115.6 million (2022)
GDP: USD $404.3 billion (2022)
Currency: Philippine Peso (PhP)
Language: Filipino and English

Healthcare - Philippines

Explore healthcare export opportunities and the regulatory environment in the Philippines.

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Executive Summary

The Philippine medical device market remains lucrative for U.S. exporters and health service providers as 99 % of devices are imported. Currently, the local medical device industry holds less than 1% of the market share and primarily produces spare parts and medical consumables.

In 2020, eight out of the ten leading causes of death or illness were respiratory diseases. Other top causes of death or illnesses include hypertension, urinary tract infection (UTI), cancer, animal bites, and skin diseases. These diseases drive the strong demand for medical diagnostic devices such as CT scans, X-ray machines, and MRI machines.

Large hospital groups continue to drive hospital development throughout the country and are providing capital to upgrade facilities and modernize equipment. Most hospitals are in the Calabarzon region (Region 4-A), which includes the following provinces: Cavite, Laguna, Rizal, and Quezon, which are around 228 hospitals. Followed by Central Luzon’s (Region 3) seven provinces: Aurora, Bataan, Bulacan, Nueva Ecija, Pampanga, Tarlac, and Zambales) with around 196 hospitals. The National Capital Region (Metropolitan Manila) includes sixteen independent cities and one independent municipality) with 186 hospitals.

In 2019, the Philippines reenacted the Universal Healthcare Act that entitles all Filipinos free healthcare insurance under the Philippine Health Insurance Corporation or “PhilHealth.” The Philippine Department of Health budgeted $4.77 billion USD in 2022 compared to $ 4.01 billion USD in 2021 for the Universal Healthcare Act (UHC). However, this budget is significantly lower compared to its ASEAN neighbors like Vietnam and Thailand.

The Covid-19 pandemic exposed the gaps in the Philippine healthcare system. At the height of the pandemic, medical consumables experienced an 18.3% growth attributed to the increased sales of essentials such as masks (surgical or medical grade), PPE kits, gloves (latex and nitrile), swabs and test kits, and ventilators. Moreover, the pandemic shifted the purchasing patterns of importers and hospitals towards medical devices required to treat Covid patients. Capital equipment used to treat other diseases is considered sufficient in many hospitals.

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Market Entry

U.S. manufacturers interested in entering the Philippines must appoint a Philippine distributor to handle all aspects of registration, obtaining licenses, and other appropriate requirements. The Philippine distributor also assumes the responsibility for marketing and promotion through their established networks.

Local distributors are accredited by the Philippine Food and Drug Administration. The company must have a License to Operate and a Certificate of Product Registration to import to the Philippines legally. The average tariff rate for medical devices and equipment is 3% plus a 12% Value-Added Tax (VAT). The Philippine Bureau of Customs determines the VAT for applying duties, customs duties, excise taxes, and other charges deemed necessary. To view the latest tariff schedule of your product here: https://finder.tariffcommission.gov.ph/

The Philippines imposed the Most Favored Nation Tariff and Applied tariffs on medical devices critical to tackling the Covid-19 pandemic. A complete list of products and their 6-digit HS Code is available: https://wits.worldbank.org/tariff/trains/en/country/PHL/covid-19-medical-products.

The U.S. Commercial Service Manila can assist U.S. manufacturers connecting with Philippine distributors accredited by the Philippine FDA.

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Current Market Trends

The Philippine medical device industry is import-dependent. The local manufacturing industry only produces hospital furniture, medical consumables, spare parts, and prototypes. According to Ken Research, the Philippine Medical Device Sector was valued at $1.46 billion USD in 2020, with an estimated growth rate of 10.7% by 2025. Market growth is being driven by: an increase in hospital development, high prevalence of chronic diseases, cardiovascular diseases, kidney diseases, medical tourism, an increasing number of check-ups due to UHC implementation, and the Covid-19 pandemic.

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Best Prospects

Large hospital groups including the Metro Pacific Corporation (MPIC), Ayala Corporation (Qualimed), and UniLab (Mt. Grace Hospitals Group) drive the demand for medical devices and equipment as these companies continue to acquire existing facilities and develop new hospitals across the country. According to Ken Research, hospitals contribute 70% of the total medical device revenue, while clinics and diagnostic labs contribute 22.5%, and other healthcare institutions contribute 7.5%.

U.S. Manufacturers of medical devices may find opportunities for low-volume, high-value equipment to strengthen the current efforts of hospitals on specialized services. Innovative medical devices like advanced point-of-care devices, diagnostic devices, and cancer treatment devices are also in demand. Health IT is another area of opportunity for U.S. companies as private hospitals and IT service distributors and resellers look for innovative products to enhance patient care.

Opportunities also exist for U.S. companies specializing in data science and analytics, clinical decision support, AI (artificial intelligence) and machine learning, robotics process automation, mobile health IT devices, electronic health records (EHR), augmented medical reality (Medical AR), and electronic medical records (EMR).

Low- Volume, High – value

equipment

Innovative Medical devices

Health IT

CT scan systems
X-Ray units
Ultrasound systems
ECG Machines
Ventilators

Advanced point-of-care devices
Advanced diagnostic devices
Cancer treatment devices

Telemedicine
Digital therapeutics
Clinical decision support
Electronic medical record systems (EMRs, EHRs, and PHRs)
Electronic prescribing
Medical augmented Reality (Medical AR)

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Main Competitors

U.S. manufacturers of high-value, low-volume generally perform well in the Philippine market as most local importers prefer high-quality. U.S. manufacturers face increasing competition from China, Germany, Singapore, and Japan.

Key players present in the country include GE Healthcare, Medtronic, Abbott Laboratories, Terumo, BD, Boston Scientific, Siemens, and Philips.

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Current Demand

Public hospitals focus on preventive healthcare, while private hospitals concentrate on curative services. Increasing incidences of hypertension, diabetes, kidney disease, respiratory diseases, cancer, heart and lung problems, obesity, and malnutrition all contribute to the strain on the Philippine healthcare system.

Medical equipment to detect, treat, and cure patients are some of the most sought-after products. Health IT products and services in the areas of data science and analytics, clinical decision support, AI (artificial intelligence), and machine learning are also in demand.

There is also increasing demand for refurbished medical equipment and laboratory equipment as hospital developers expand and acquire hospitals across the nation.

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Registration Process

The Center for Device Regulation, Radiation Health, and Research under the Philippine Food and Drug Administration (CDRRHR – FDA) oversees medical device registration.

U.S. manufacturers must appoint a local distributor responsible for all importation and registration aspects. U.S. manufacturers must provide all necessary documents to their appointed distributor.

The Philippines aligns itself to the ASEAN Medical Device Directive (AMDD), which classifies medical devices according to four classes A, B, C, and D and ranks from low to high risk. Medical devices classified under Class A must obtain a Certificate of Medical Device Notification (CMDN). For medical devices classified under Classes B, C, and D, apply for the CMDN and the Certificate of Medical Device Registration (CMDR) at least three months before the CMDN expiration.

The Philippine FDA is currently soliciting comments from the industry regarding the registration of In-vitro diagnostic (IVDs) products. According to the latest draft, IVDs will have the same registration process as other medical devices.

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Reimbursement

The Philippine Health Insurance Corporation or PhilHealth is a government-owned corporation under the Department of Health. It is responsible for managing the National Health Insurance Program.

In 2019, Republic Act 11223, or the Universal Healthcare Act, was signed into law to provide quality and affordable healthcare services to reduce the out-of-pocket expenditures of all Filipinos. The Philippine Government increased healthcare expenditures to spur on the construction of more hospitals and other health facilities. Currently, there are around 98 million Filipinos covered under PhilHealth. There are 1,915 hospitals in the Philippines, including 1,148 private hospitals and 767 government hospitals. Approximately 1,890 hospitals are accredited under PhilHealth.

Private health insurance is voluntary and is the usual means of payment to cover additional health expenses. Private health insurance is voluntary. Most private companies cover partial to full health insurance for their employees.

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Barriers

There are no barriers to selling or purchasing medical devices and equipment in the Philippines. U.S. manufacturers must ensure that their products are compliant with international standards.

Medical device registration is managed by the Center of Device Regulation, Radiation Health, and Research (CDRRHR) under the Philippine Department of Health. Registration must be completed by a local importer who has a valid License to Operate.

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Procurement and Tenders

U.S. companies should work with a local distributor to participate in government tenders. The Philippine Government can directly negotiate and procure items for national programs, provided a single source manufactures it.

Government tenders are posted in Philippine Government Electronic Procurement System (PHILGEPS). PHILGEPS serves as the centralized electronic portal for all information on government tenders. Guidelines for participation are also indicated on this website: https://www.philgeps.gov.ph/.

The Philippine Department of Health (DOH) also posts DOH-specific bidding tenders on its website:
https://doh.gov.ph/procurement

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FAQs

How can U.S. companies sell their medical devices in the Philippines?

U.S. manufacturers must appoint a local importer to handle all procedures including customs clearance, FDA registration, marketing, and selling to hospitals and other health facilities.

How long does it take to register medical devices?

The Philippines is a signatory to the ASEAN Medical Device Directive (AMDD). Medical devices are classified in terms of risk in accordance with the AMDD:

Category	Risk-level	Device	Approximate Approval Time
Class A	Low	Bandages / Wheelchairs/ Face masks / cotton balls	4 to 12 weeks for authentication
Class B	Low – Mid	Contact lenses / dental crowns / hearing aids	Within 180 days
Class C	Mid – High	X-Ray Machines / Lung ventilators / Hip Implants	Within 180 days
Class D	High	Pacemakers / heart stents / breast implants	Within 180 days

What are the top hospitals that expand operations and provide opportunities for U.S. medical device companies?

Top hospitals that drive the demand for U.S. medical devices include: St. Luke’s Medical Center, the Medical City, Metro Pacific Investments Corporation (MPIC) group of hospitals, Mt. Grace Hospital, Inc. (MGHI), and Qualimed Hospitals.

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U.S. Commercial Service Contact Information

Name: Katrina Domingo
Position: Commercial Specialist
Email: Katrina.Domingo@trade.gov
Phone: (632) 5301-2176

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