Recent Developments

On 24 March 2020, President Rodrigo Duterte signed into law Republic Act No. 11469, otherwise known as the Bayanihan to Heal as One Act (Bayanihan Act), which authorizes the President to exercise certain powers, for a limited time and subject to certain conditions, to implement the policies pursuant to the declaration of a state of national emergency over the entire Philippines due to the Coronavirus 2019 (COVID-19) pandemic.

What the law says

Emergency powers

The law grants the President the power to adopt temporary emergency measures to respond to the crisis brought about by the COVID-19 pandemic, including the following:

  • Adopt and implement measures to prevent or suppress further transmission and spread of COVID-19, following World Health Organization guidelines and best practices;

  • Expedite and streamline the accreditation of testing kits, facilitate prompt testing, and compulsory and immediate isolation and treatment of COVID-19 patients, with the cost of treatment to be covered under the National Health Insurance Program of the Philippine Health Insurance Corporation;

  • Provide compensation to public and private health workers who may contract severe COVID-19 infection, or die due to the COVID-19 pandemic;

  • Direct the operation of any privately-owned hospitals and medical and health facilities, passenger vessels and other establishments, to house health workers, serve as quarantine areas, medical relief and aid distribution centers, or other temporary medical facilities;

  • Enforce measures to protect people from hoarding, profiteering, manipulating prices, or other practices affecting the supply, distribution and movement of food, clothing, hygiene and sanitation products, medicine and medical supplies, fuel, fertilizers, chemicals, building materials, and equipment required in agriculture, industry and other essential services, and other articles of prime necessity, whether imported or locally produced;

  • Undertake the procurement of the following as the need arises, in the most expeditious manner, as exemptions from the requirements of the Government Procurement Reform Act:
    • Personal protective equipment, laboratory equipment, medical equipment and supplies, testing kits, and other supplies and equipment as may be determined by the Department of Health
    • Goods and services for social amelioration measures in favor of affected communities
    • Lease of real property to house health workers or serve as quarantine centers, medical relief and aid distribution locations, or temporary medical facilities
    • Establishment, construction, and operation of temporary medical facilities
    • Utilities, telecommunications, and other critical services in relation to the operation of quarantine centers, aid distribution centers, and temporary medical facilities
    • Ancillary services related to the foregoing

  • Ensure the availability of credit to the productive sectors of the economy, especially in the countryside, through measures such as lowering the effective lending rates of interest and reserve requirements of lending institutions;

  • Liberalize the grant of incentives for the manufacture or importation of critical equipment or supplies, including healthcare equipment and supplies. Importation of these equipment and supplies shall be exempt from import duties, taxes, and other fees;

  • Ensure the availability of essential goods, such as healthcare equipment and supplies, by adopting measures to facilitate and minimize disruption to the supply chain;

  • Require businesses to prioritize and accept contracts, subject to fair and reasonable terms, for materials and services necessary to promote the declared national policy during the COVID-19 crisis;

  • Regulate the operation of all sectors of transportation through land, sea, or air, whether private or public;

  • Continue to authorize alternative working arrangements in the Executive Branch, and whenever it becomes necessary, in other independent branches of government, constitutional bodies, and the private sector;

  • Conserve and regulate the distribution and use of power, fuel, energy, and water, and ensure adequate supply of the same;

  • Discontinue programs, projects or activities of the Executive Department including government owned or controlled corporations, and utilize the savings to augment measures which are necessary or beneficial in order to address the COVID-19 emergency;

  • Move statutory deadlines and timelines for the filing and submission of any document, the payment of taxes, fees, and other charges required by law, and the grant of any benefit;

  • Direct all banks, quasi-banks, financing companies, lending companies, and other financial institutions, including the Government Service Insurance System, Social Security System, and Pag-Ibig Fund, to implement a minimum of a 30 day grace period for the payment of all loans and credit card payments falling due within the period of enhanced community quarantine, without incurring interests penalties, fees, or other charges;

  • Provide a 30 day grace period on residential rents falling due within the period of enhanced community quarantine, without incurring interests, penalties, fees, and other charges; and

  • Undertake such other measures as may be reasonable and necessary, subject to the Bill of Rights and other constitutional guarantees.

Punishable offenses

In addition to acts and omissions already penalized by existing law, the following offenses, among others, are punishable with imprisonment of two months or a fine of Php 10,000- 1,000,000, or both, at the discretion of the court:

  • Unjustified refusal by owners and possessors of privately-owned hospitals, medical and health facilities, passenger vessels, and other establishments to operate pursuant to directive of the President;

  • Engaging in hoarding, profiteering, manipulating prices, or other practices affecting the supply, distribution and movement of food, clothing, hygiene and sanitation products, medicine and medical supplies, fuel, fertilizers, chemicals, building materials, and equipment required in agriculture, industry and other essential services, and other articles of prime necessity, whether imported or locally produced;

  • Refusal to prioritize and accept contracts for necessary materials and services;

  • Refusal to provide the 30 day grace periods for loans and residential rents;

  • Creating, perpetrating, or spreading false information regarding the COVID-19 crisis on social media and other platforms;

  • Failure to comply with reasonable limitations on the operation of transportation sectors, whether private or public;

  • Impeding access to roads, streets, and bridges.

If the offender is a juridical person, the penalty shall be imposed upon the president, directors, managers, managing partners, as the case may be, who participated in the commission of the offense or who shall have knowingly permitted or failed to prevent the commission of the same. If the offender is a foreign national, in addition to the penalties mentioned above, the foreign national will be deported without further proceedings.

Actions to consider

The Bayanihan Act grants the President with broad temporary powers and discretion to direct, adopt and implement measures to respond to the health threat and disruption of economic activities during the COVID-19 crisis. As such, the emergency powers must be exercised by the President in order to have effect.

Industries that are primarily affected by these potential emergency measures include healthcare, transportation, banking and finance, public utilities, manufacturing, and those engaged in the production or delivery of essential goods and services. These businesses should monitor developments to ensure compliance with directives of the President pursuant to the Bayanihan Act.

Affected businesses may also want to consider their preparedness for possible supply of required goods and services to the government, as envisioned by the law. Among others, businesses in the healthcare sector should note the intention of the government to expedite the accreditation of testing kits, and to fast-track procurement of goods and services including personal protective equipment, laboratory equipment, medical equipment and supplies, testing kits, and other supplies and equipment as may be determined by the Department of Health. In contrast, businesses that may be affected by discontinued projects and contracts of the government may want to consider courses of action to mitigate any adverse impact on commercial operations and forecasts.

Quisumbing Torres will continue to provide further updates with respect to the implementation of the Bayanihan Act, and we are prepared to assist in your legal requirements during these uncertain and challenging times.

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