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Background of the Study

Senior citizens make up a significant percentage of the Philippine population. Of
the 94,013,2001 projected total population of Filipinos for 2010, 6,367,100 2 are senior
citizens. This means that senior citizens make up 6.77% of the total population. Of the 4,
362, 4003 residents in Davao City alone, 276,0004 are senior citizens. In addition to this
fact, our 1987 Philippine Constitution expressly provides a provision on health in Article
XIII, to wit:
Section 11. The State shall adopt an integrated and
comprehensive approach to health development which shall
endeavor to make essential goods, health and other social
services available to all the people at affordable cost. There
shall be priority for the needs of the under-privileged, sick,
elderly, disabled, women, and children. The State shall
endeavor to provide free medical care to paupers.

Thus, acknowledging the significance of the population of senior citizens in the

country, and upholding the constitutional provision on health, the legislature first enacted
Republic Act No. 7432, otherwise known as the Expanded Senior Citizens Act of 2003
which has been now amended by Republic Act No. 9994, otherwise known as the
Expanded Senior Citizens Act of 2010.
The Expanded Senior Citizens Act of 2010 (RA 9994) classifies a person as a
senior citizen based on age. Upon reaching the age of 60 years old, a person is classified
as a senior citizen and is entitled to the benefits provided for in RA 9994 such as twenty
percent (20%) discount and exemption from the value-added tax on the sale of goods and

http://www.census.gov.ph/data/sectordata/popproj_tab4r.html; 9/17/10; 11:57AM
http://www.census.gov.ph/data/sectordata/popproj_tab4r.html; 9/17/10; 11:57AM
http://www.census.gov.ph/data/sectordata/popproj_tab4r.html; 9/17/10; 11:57AM
http://www.census.gov.ph/data/sectordata/popproj_tab4r.html; 9/17/10; 11:57AM

services such as but not limited to the purchase of medicines, medical and dental fees,
and actual fares for transportation.
Among all the benefits granted to the senior citizens, the discount on medicine
and medical fees is the most beneficial for them because by reason of old age, health
naturally deteriorates and this is the reason why senior citizens tend to pay more attention
to their health than healthy younger individuals. As a result, the objective of RA 9994
regarding health care is truly achieved.
However, as a consequence of the implementation of RA 9994, specifically in
granting senior citizens discounts on medicine purchases, problems are very likely to
arise problems that directly affect drugstores and could indirectly affect not only the
senior citizens but also the entire buying population if there is poor implementation of the
law because such scenario could lead to widespread deterioration of the drugstore

Statement of the Problem

This study aims to determine the effect of the Expanded Senior Citizens Act of
2010 (Republic Act No. 9994) on the sales of Mercury Drug with respect to purchases of
senior citizen customers. Specifically, this study aims to answer the following questions:

1. What is the effect of the implementation of the Republic Act No. 9994 on the total
sales of Mercury Drug?
2. What are the effects of the removal of income cap on senior citizens on the
drugstore business?
3. Is there any constitutional right on the part of Mercury Drug impeded by Republic
Act No. 9994?
4. Is Republic Act No. 9994 effectively implemented? Does the government
reimburse the discounted medicines?

Briefly, the inquirys objectives are:

1. To identify the effect of the implementation of the Expanded Senior Citizens Act
on the total sale of drugstores.
2. To determine the effect of the removal of income cap on senior citizens on the
drugstore business.
3. To point out constitutional rights deprived of drugstores as a result of the
implementation of this law.

Scope and Delimitation of the Study

The researchers choose Mercury Drugstore Corporation (Mercury Drug)

branches in Davao City as their respondent drugstore corporation. The researchers opt to
conduct the study with the help of Mercury Drug based on the following reasons: a.) It is
the largest drug corporation in the country; b.) It has the most number of branches in
Davao City; c.) It pioneered the questioning of the taxing of already discounted
medicines of the Expanded Senior Citizens Act; and d.) It is among the forerunners of
Drugstores Association of the Philippines (DPA).
The researchers will conduct interviews with Mercury Drug employees
responsible for making product inventories and determining the total sales of each
The interviews to be conducted by the researchers will be limited to all the
branches of Mercury Drug Corporation in Davao City only.

Definition of Terms

The following key terms which are recurrent in this study are defined in the sense
in which they are used. In addition to the operational definitions, conceptual definitions
are also provided.
Benefit. Benefit comes in various definitions. It is any profit or acquired right or
privilege, primarily through a contract or in worker's compensation the term "benefit" is

the insurance payment resulting from a fatal accident on the job, while "compensation" is
for injury without death. In income taxation, on the other hand, it is anything that brings
economic gain.5
Drugstore. Drugstore is a business establishment where medical prescriptions are
filled and drugs and medical supplies are sold.6
Privilege. It is a peculiar benefit, advantage, or favor; a right or immunity not
enjoyed by others or by all; special enjoyment of a good, or exemption from an evil or
burden; a prerogative; advantage; franchise.7
Reimbursement. Reimbursement is the act of paying someone for expenses they
have paid. It occurs in many contexts and is governed by federal, state, and local laws, as
well as contract law. Reimbursement may be partial or full payment of expenses incurred
and payments may be taxable depending on applicable laws8
Sale. An agreement by which one of the contracting parties, called the seller,
gives a thing and passes the title to it, in exchange for a certain price in current money, to
the other party, who is called the buyer or purchaser, who, on his part, agrees to pay such
Senior Citizen. Senior citizen is an elderly person, especially one who has retired. The
Philippine laws classify a person belonging to this group based on age. People with ages sixty and
above are classified under this group.
Tax. Tax is a sum of money demanded by a government for its support or for
specific facilities or services, levied upon incomes, property, sales, etc.10

Significance of the Study

The main objectives of the Expanded Senior Citizens Act of 2010 (RA 9994) is to
recognize the rights of senior citizens and consequently, provide for them the special
benefits and privileges that they deserve on account of their status in life.

5 http://www.yourdictionary.com/drugstore; 8/28/10; 12:20 AM

6 http://www.brainyquote.com/words/pr/privilege206818.html; 8/28/10; 12:20 AM
7 ttp://legal-dictionary.thefreedictionary.com/Benefit8/2;8/10; 12:20 AM
8 http://definitions.uslegal.com/r/reimbursement/;8/28/10; 12:20 AM
9 http://www.lectlaw.com/def2/s122.htm; 8/28/10; 12:20 AM
10 http://dictionary.reference.com/browse/tax; 8/28/10; 12:20 AM

The discount granted to senior citizens in the health care area, being the foremost
and most useful among all the benefits enumerated in RA 9994, needs to be properly
implemented in order to retain the noble intention of prioritizing the needs of the elderly
without prejudicing the economic welfare of drugstore companies.
This study may help the legislators come up with solutions to the problems in the
implementation of the Expanded Senior Citizens Act of 2010.
This study may help the legislators come up with the best solution for the said
problem and in return both the senior citizens and businessmen engaged in selling
medical supplies will be fully benefited, thus effectuating the noble intent of the
Expanded Senior Citizens Act.