DOF supports Sen. Cayetano call for higher alcohol taxes

Date Posted : October 29, 2019

DOF supports Sen. Cayetano call for higher alcohol taxes

Date Posted : October 29, 2019

The Department of Finance (DOF) has expressed its full support for the higher alcohol excise tax rates contained in Senate Bill (SB) No. 1074, which was sponsored in plenary by Senate ways and means committee chairperson Pia Cayetano.

“We are one with Senator Cayetano in affirming that higher taxes are the most cost-effective way to discourage excessive consumption of ‘sin’ products,” DOF Assistant Secretary and DOF spokesperson Antonio Joselito Lambino II said at a recent forum hosted by the Action for Economic Reforms at the Senate.

Finance Undersecretary Karl Kendrick Chua of the Strategy, Economics, and Results Group (SERG) said the DOF “will continue to extend the necessary technical assistance to help Senator Pia preserve the rates in the Senate ways and means committee’s well-studied committee report, as plenary deliberations resume, hopefully as soon as the Senate comes back in session.”

“We are one with Senator Cayetano in her push for significantly higher rates in alcohol excise taxes. Her analysis is correct that beyond the personal health costs, the socioeconomic costs of alcohol need to be mitigated. The massive economic costs of alcohol abuse justify significantly higher rates. For behavior to change meaningfully, the tax rates have to be high enough.” Chua said.

Earlier, Cayetano said a significantly higher increase in the excise tax on alcohol products would be the “singular, reasonable and patriotic conclusion” of the extensive committee hearings conducted by the Senate tax panel after members “listened to various stakeholders, questioned and analyzed relevant information provided by resource persons and experts, in both the private and public sectors.”

Finance Secretary Carlos Dominguez III has described Cayetano’s proposal as “well-studied,” and called for the bill’s swift approval in the Senate, as he acknowledged Cayetano’s “strong advocacy of safeguarding the health of our people.”

During her sponsorship speech last September 25, Cayetano described higher rates on “sin” products as “what our social conscience dictates, guided by our concern for the welfare of families and children, and in pursuit of the public good.”

Cayetano went on to cite the massive social, physical, and psychological costs of excessive alcohol consumption.

“Wonderful lives are cut short because of people who drink and drive. We often hear about innocent people dying from road crashes–someone who was once a father, a mother, a child, or a friend. In seconds, their lives are forever changed or wasted because a drunk person foolishly decided to take the wheel and drive,” Cayetano said.

Citing Dr. Orlando Ocampo, the Chief of the Trauma division of the Philippine General Hospital (PGH), Cayetano said that “55 percent of the injured patients” treated in the PGH emergency room “have alcohol on their breath. 25 percent of these injured patients are blood alcohol content positive.”

“We are convinced that the number of those driving under the influence is much, much more,” Cayetano added.

The Department of Health (DOH) estimates that there has been a total of 10,372 road crashes resulting from alcohol consumption.

Cayetano also cited the adverse health impacts of alcoholism.

“Alcoholism is associated with at least 39 main diseases, including liver cirrhosis, cancer, pancreatic disease, hypertensive disease, tuberculosis, diabetes, and even behavioral and psychotic disorders.

Data from the World Health Organization (WHO) also showed that in 2016; 4,431 per 100,000 population of Filipinos died from liver cirrhosis; 16,418 from hypertensive diseases; and 8,526 from tuberculosis–all of which were due to excessive use of alcohol,” Cayetano said.”

“The impact of our problem on alcoholism, Mr. President, is not felt by the drinker alone,” Cayetano added, enumerating the negative social impacts of alcohol abuse.

“When heavy drinking is involved, severe physical violence is more likely to take place. Studies found alcohol misuse to be a significant contributor to family violence,” she said.

“Ginoong Pangulo, ilan na po ba ang mga bata na nakasaksi ng pambubugbog ng nanay dahil lasing ang kanilang ama? Millions of Filipino children endure this violence at home. Many of them end up developing mental and emotional problems, or worse, repeating the cycle of abuse themselves. It is within this Senate’s power to create safer environments for our children,” she added.

The costs Cayetano listed echo the arguments of an article by the weekly The Economist, which ranked alcohol as the drug that causes the most overall harm.

The article cited a 2010 study by British medical experts David Nutt, Leslie King and Lawrence Phillips that ranked intoxicating substances according to the harm the users cause on themselves and on others when they consume the drug.

The study found that while alcohol is not the most damaging substance to physical health alone, the injury it can cause to the user owing to accidents, and its impact on the user’s relationships make it among the drugs that can cause the most self-harm (more than amphetamine and cocaine).

The same article also cited the significant social costs of alcohol, including environmental, economic, and community harm, as well as adverse impacts on family relations and peace and order.

Preliminary estimates from the DOF indicate that alcohol may have an economic cost of as much as 1.7 percent of gross domestic product (GDP) every year, equivalent to about a third of the country’s annual health expenditure.

“Time and again, the manufacturers of these products have asked us to be “reasonable” with rates. In our experience, Mr. President, this argument is rarely, if at all, used to advocate for the Filipino family. Reasonable should not be code for ‘lower prices.’” Cayetano said. “For us Senators of the Republic, a reasonable proposal is one that actively protects the Filipino family. The only way to go is that which leads to the protection of people’s lives.”

SB 1074 was in the period of interpellation when the Congress took a break last Oct. 4, 2019. The Senate and the House of Representatives will resume session on Nov. 4, 2019.


Date Posted October 29, 2019

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