In a memorandum published on the 10th of June 2013, the Food and Drug Administration (FDA) of the Philippines advised all food related parties about the planned increase of application fees for processing the License to Operate (LTO) and the Certificate of Product Registration (CPR). In order to maintain an effective regulatory system in the country, the FDA needs to increase its revenue. At the moment, the FDA is not generating sufficient income to support its own operations, thus, a fee increase is imperative so the agency can efficiently operate.
The main concern of the FDA is to ensure the quality and safety of all food products and the transparency of its process. Increasing the fees will provide the necessary resources to establish a reasonable barrier to the entry of food importers or manufacturers who cannot fully comply with the complex of food regulations. This barrier will limit the entry of risky food products and irresponsible business into the Philippine market without full compliance.
How will this affect the private companies?
Naturally, the increase in fees will have a significant negative impact for both new and existing establishments as this will directly increase their operational costs and create more competition. Additionally, this will also influence the general growth and innovation of the country. However, the planned increase on FDA fees will depend on the size of the enterprises, the specific activity as well as the level of risk on the products intended to be registered.
The scheduled increase of fees will take effect on the 1st of October, 2014 for all parties related to importation and distribution of food products. We can definitely anticipate equivalent similar changes for other products registered at the FDA (Cosmetics, Drugs, Medical Devices…) in the future.