Just recently, the Committee on Ways and Means of the House of Representatives approved HB 5727, with amendments. The bill seeks to restructure the excise tax system on tobacco and alcohol products to provide much-needed revenues for government’s Universal Health Care (UHC) program.
The amendments, which were introduced last week, will have a substantial impact on the health objectives. With the two-tier system, indexation that will only increase the tax by 8% every two years, and a ten-year freeze, advocates fear that the reforms will make some money but heavily fall short of attaining the health goals.
“Sure, some people will not buy cigarettes anymore when the price goes up, but this effect will be short-term and unsustainable,” explained Ruben Carlo Asuncion, an independent research economist.
Asuncion added “Because of the freeze, Philippine brands will still be less than P100 in ten years, still much lower than the prices today in our neighboring countries. ” Currently, the average retail price per pack of cigarettes in Thailand is P105, it is P109 in Malaysia, and P263 in Singapore. “Why tie our hands for that long or at all?” he adds.
It also has an impact on revenues. The potential P60 billion revenue from the original HB 5727 will be slashed to approximately P33 billion, shrinking what could have been allocated for health or prevention of smoking related diseases.
“With the much needed reforms in health human resource, health services, improvement in health facilities and the high cost of medicines, P33B projected revenues will be too small. We need at least P312 billion per year to implement UHC,” said Dr. Ramon P. Paterno of the UHC Study Group, Institute of Health Policy and Development Studies, National Institutes of Health.
According to Dr. Mario Villaverde. Associate Dean of Ateneo School of Government and former Undersecretary of the Department of Health “An ounce of prevention is worth more than a pound of cure. That is why money should be set aside for health promotion or all of this money would just keep going into a deeper and deeper pit of treating the diseases caused by these vices. The amended bill lacks the provision to fund preventive healthcare such as alcohol control, good nutrition, physical activity, road safety, and tobacco control. These programs will reduce the need for costly curative health services,” he added.