Philippines - DOH pushing for hefty tax increase on cigarettes..

August 13, 2010 - The Department of Health (DOH) is pushing for a 400% increase in the tax on cigarettes. The tax hike would bring up the price of a cigarette stick from P2 to P7, and a pack from P30 to P120. The DOH said the move would help reduce the number of smokers in the country, deter the youth who comprise 20% of the smoking population while allowing government to raise revenue to bring down the budget deficit. DOH research shows that 4 out of 10 Filipino adults smoke, while over 20% of Filipino smokers are between 15 to 20 years old.

There are about 17.3 million smokers in the Philippines, including Pres. Noynoy Aquino, according to Inquirer.net. According to the latest WHO report, the smoking percentage of Filipinos in the age group 13-15 years is 22.7% with more boys smoking than girls who are, nevertheless, catching up. Data from 151 countries show that 7% of adolescent girls smoke cigarettes as opposed to 12% of adolescent boys. In some countries, almost as many girls smoke as boys. (Filipino girls among biggest smokers in the world —WHO By Frankie Llaguno, Newsbreak, 5/28/2010) According to the latest WHO report, the smoking percentage of Filipinos in the age group 13-15 years is 22.7% with more boys smoking than girls who are, nevertheless, catching up. Data from 151 countries show that 7% of adolescent girls smoke cigarettes as opposed to 12% of adolescent boys. In some countries, almost as many girls smoke as boys. (Filipino girls among biggest smokers in the world —WHO By Frankie Llaguno, Newsbreak, 5/28/2010)

Increasing the tax for cigarettes to P4.50 per stick or P90 per 20-stick pack was one of the ideas proposed during a meeting between officials from the Department of Health and anti-tobacco advocate Framework Convention on Tobacco Control Alliance Philippines (FCAP), reports Inquirer.net. The current tax rate per cigarette pack ranges from P2.47 (0.0545855 USD) to P27.16 (0.600221 USD) "placing the Philippines among countries selling the cheapest cigarettes in Asia," according to FCAP. Should the tax increase be implemented, the cost of a cigarette stick would range from P5.50 to P7.50, and a pack from P97 to P190 (4.20 USD), according to the report.

The idea is inspired by the "Obama model," according to Inquirer.net In February 2009, United States Pres. Barack Obama, who used to be a smoker, signed a bill legalizing the increase in cigarette tax from $0.39 to $1.01 per pack to raise funds for the health insurance of poor children. In the Philippines, the funds raised from the tax increase would be partly used for the health care of about five million poor Filipinos.

Health Secretary Enrique Ona told Inquirer.net, "These are just thoughts that came about during the meeting… For now, it's just an idea and an option we could take but I am not yet pushing for anything." (In early July Health Secretary Esperanza Cabral formally bowed out of the Department of Health (DOH) and government service, as she turned over her post to former National Kidney Transplant Institute (NKTI) executive director Enrique Ona. (Cabral turns over health department to Ona by Jeannette Andrade, Philippine Daily Inquirer, 7/5/2010) - We will miss Dr. Cabral - she did an excellent job - TobaccoWatch.org..

Ona's head executive assistant, Dr. Yolanda Oliveros, said in a report by Inquirer.net, "[During the meeting], the secretary was open to following the Obama model if the tax increase would be applied in the Philippines." Oliveros told The Philippine Star, "Increasing the tax will reduce access to tobacco because we will reduce the capacity (of smokers) to pay. In doing this, our primary targets are the students. If cigarettes become more expensive, they won't be able to afford it anymore."

FCAP Executive Director Dr. Maricar Limpin said in a statement, "It will go a long way for the Aquino administration, (which is) facing a huge budget deficit while dealing with very high expectations on poverty alleviation and addressing the social welfare of the people. There's a big disequilibrium between the cost of cigarettes and the cost of health care so government spends more on diseases caused by tobacco. Studies show the expenditure on health care has reached P270 billion compared to the revenue government is getting which is only P27 billion."

References: Cigarette tax to be raised to P90 per pack?, Spot.ph, 8/10/2010; Raising the tax on tobacco, Caroline J. Howard, ABS-CBN News Channel
(Alto Broadcasting System-Chronicle Broadcasting Network), 8/13/2010.

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