Bayanihan 2 orders interventions to improve supply chain, lower logistics costs

The newly enacted Bayanihan to Recover as One Act, or Bayanihan 2, directs the adoption of measures that will facilitate and improve supply chain movement and minimize disruptions to ensure essential goods, particularly food and medicine, are available.

Aside from improving the national end-to-end supply chain, Republic Act (RA) No. 11494, calls for measures that will reduce logistics costs “to the maximum extent possible,” especially for basic commodities and services.

Relatedly, RA 11494 states that the Department of Trade and Industry (DTI) may suspend export requirement for export enterprises that produce critical goods and require them to supply locally.

These are among the response and recovery interventions under RA 11494, as the new law, signed on September 11 and in effect until December 19, 2020, seeks to fast-track Philippine recovery from the coronavirus disease (COVID-19) pandemic fallout.

Bayanihan 2 effectively extends the validity of the government’s COVID-19 programs and interventions under RA 11469, or the Bayanihan to Heal as One Act, whose validity lapsed last June.

To carry out these interventions, the new law provides for a P165.5 billion subsidy consisting of P140 billion in regular appropriations and P25.5 billion in standby funding.

Incentives and exemptions

RA 11494 also liberalizes incentives for the manufacture or importation of critical equipment and supplies, as well as essential goods and healthcare equipment and supplies, needed to carry out policies under the new law.

Exemption from import duties, taxes, and other fees for the manufacture or importation of critical equipment and essential goods will be determined by the Bureau of Customs and Bureau of Internal Revenue. Importation of health and medical equipment and supplies were also exempt from duties, taxes, and fees under RA 11469.

Under RA 11494, however, the sale, distribution, and trade of critical equipment and essential goods or supplies may be limited or restricted to prevent the shortage of supply and ensure that the prices remain reasonable and the needs and safety of health workers and frontliners are prioritized.

Critical products, equipment or supplies or essential goods include goods referred to in Section 4 (u) (l) of RA 11494; equipment for waste management that are approved by the Department of Environment and Natural Resources, Department of Health, or other concerned regulatory agencies; and inputs, raw materials, and equipment necessary for the manufacture or production of essential goods related to the containment or mitigation of COVID-19.

To qualify for the exemption from import duties, taxes, and other fees, as well as to ensure the supply of personal protective equipment at competitive prices, DTI should certify that the equipment and supplies being imported are not locally available or of insufficient quality and preference.

Preference is given to product, materials, and supplies produced, made or manufactured in the Philippines.

Exemption from import duties and taxes, including donor’s tax, will also be granted for personal computers, laptops, tablets, or similar equipment for use in schools, donated for distribution to public schools regardless of level, including state universities and colleges and vocational institutions under the Technical Education and Skills Development Authority.

Aid to critically impacted firms

Meanwhile, the Department of Transportation (DOTr) and other agencies that may be authorized by RA 11494 are directed to assist critically impacted businesses in the transportation industry, including transport cooperatives.

This assistance includes the following:

Provide direct cash or loan interest rate subsidy
Provide grants for applicable regulatory fees for a period of not more than six months
Allow substitutes of refund option to travel vouches
Provide grants for fuel subsidy and/or digital fare vouches, as may be necessary
Provide grants for training, equipment, facilities, test kits and necessary personnel, on coping with increased health risks arising from infectious diseases

Within 15 days from the effectivity of RA 11494, DOTr or any of its attached agencies should prescribe the eligibility requirements and other terms and conditions for any of the assistance, subject to the guidelines under the new law.

To finance its projects under RA 11494, DOTr is allocated P9.5 billion from the standby fund.

The biggest chunk of DOTr’s allocation is P5.580 billion, which will go to providing temporary livelihood to displaced workers in the industry through service contracting­ regardless of quarantine levels ­of public utility vehicles (PUVs). This funding consists of P3 billion for jeepney drivers and P2.580 billion for drivers of other PUVs.

An amount of P2.604 billion is also allocated to assist critically impacted businesses in the transportation industry. Another P1.316 billion is meant to develop accessible sidewalks and protected bicycle lanes; procure bicycles and related safety equipment for bicycle distribution, sharing and lending programs; and procure bicycle racks.

Also under the law, operation of all sectors of transportation through land, sea or air, whether private or public, should likewise be regulated and limited. The necessary infrastructure and support should be provided for commuters, particularly health workers and other frontliners. This includes emergency pathways and local government unit (LGU) bicycle-sharing scheme, with proper safety equipment and pop-up bike lanes.

RA 11494 also orders that a master list ­in electronic and machine-readable data format ­be produced of all displaced and critically impacted transport workers under the road, rail, air and maritime sectors. This is to effectively implement the distribution of wage subsidies, cash-for-work program, or service contracting of PUVs.

In relation to this, DOTr is directed to coordinate the accelerated distribution of the remaining subsidy under the Social Amelioration Program as mandated under RA 11469.

Moreover, DOTr should coordinate with transport service providers, transport cooperatives, and LGUs to negotiate partially subsidized service contracting of PUVs as a form of temporary livelihood for displaced public transportation workers, and other forms of arrangement to ensure that livelihood in the transport sector is preserved.

RA 11494 also orders no phase-out, both at national and local levels, of any modality of PUV as the industry transitions to a new normal.

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