A Step Forward

Posted on Posted in 2019, News

Article Written by: Ra Solomon

Illustrated by: Lexa Burroughes 

 

If you have been using social media for the past few weeks, chances are you have encountered a video of a man trying to buy a cigarette from a sari-sari store. As the man featured in the video was drunk, he was repeatedly asking if he can buy a stick even though the store was closed. This video has gone viral, resulting to a plethora of video parodies posted in online platforms for comedic purposes.

However, behind the humor and entertainment lies the prevalent smoking habits of Filipinos. According to a Global Burden of Disease study last 2016, twelve Filipinos die each hour because of tobacco-related diseases. In addition, Global Adult Tobacco Survey (GATS) revealed that in 2015, 22.7% or 15.9 million adult Filipinos currently smoke tobacco, where 18.7% of the adults smoke daily.

To make matters worse, the poorest of the poor spend more on cigarettes compared to their expenses on sending their kids to school. Because the cost of a stick of cigarette is cheaper compared to the costs of school supplies and tuition fees, the poor fail to realize and neglect the negative effects of their tobacco inclination. In 2011, government analysts estimated that the poorest 30% of Filipino households spent a whopping PHP 5.63 billion on cigarettes, compared to PHP 4.22 billion on schooling expenses, making a gap of about PHP 1.41 billion.

A huge cause for this smoking habit among Filipinos is the low price of cigarettes. In the Third Edition of the Association of Southeast Asian Nations (ASEAN) Tobacco Atlas, it is stated that in 2015, the most popular cigarette brand in the Philippines costs around USD 1.52, while cigarettes in other Asian countries such as Singapore, Brunei, Malaysia, and Thailand cost  USD 9.62, USD 5.11, USD 4.17, and USD 1.94 respectively.

To combat this, last June 3, senators voted 20-0 to approve the Senate Bill No. 2233, which furthers the excise tax on tobacco products. The current tax on cigarette packs is PHP 35. When signed into a law, the bill would increase the tax into PHP 45 by 2020 and succeeding annual increases of PHP 5 until it reaches PHP 60 by 2023. Starting 2024, a 5% increase would be imposed annually.  Refills for e-cigarettes would also be affected, with the increase for heated tobacco and vapor products ranging from PHP 10 for products less than 10 ml, up to PHP 50 for products of 40.01 ml to 50 ml. Products exceeding 50 ml would be taxed PHP 50 with an additional PHP 10 for every 10 ml.

 

For the Greater Good

As there is an expected revenue of PHP 15 billion by next year and PHP 140 billion until 2023, the Department of Finance (DOF) sees the bill as a measure to help in the funding for the implementation of the Universal Healthcare Act which seeks to cover all Filipinos with health insurances and offer basic health services. According to Health Secretary Francisco Duque III, the government would need PHP 257 billion next year to finance the healthcare program, and without higher cigarette taxes the government can only raise PHP 195 billion in 2020, thus creating a funding gap of PHP 62 billion. Furthermore, the government estimates that from 2020 to 2024, only PHP 200 billion annually or a total of PHP 1 trillion can be provided by the government compared to the PHP 1.4 trillion needed to fund the universal health care program for the same period. In a nutshell, the funding for the health care would only come to fruition if the bill would become a law.

As the SB 2233 primarily aims to lessen and ideally stop the smoking habits of Filipinos, the bill would definitely be beneficial in promoting for the better health of the people. A recent study by Global Burden of Disease last 2016 revealed the negative consumption externality that 12 Filipinos die every hour because of tobacco-related diseases. In addition, the World Health Organization (WHO) mentions that close to 10 thousand Filipinos die annually because of lung cancer, in which 90% of the cases are estimated to be caused by cigarette smoking. More health risks arise as WHO states that 38% of people in an enclosed area have been exposed to secondhand smoke in their workplace. The percentage of exposed people balloons to 65% in public areas, while the exposure rate is 54.5% at home. Imposing higher taxes on tobacco products could discourage the consumption of cigarettes, thus lowering the health risks caused by smoking.

The Downside

With the tobacco tax possibly becoming higher, tobacco farmers would be greatly affected. According to data from the National Tobacco Administration (NTA), local tobacco leaf production was reduced to 48 million kilos in 2017 compared to 65 million kilos in 2013. From 2013 to 2017, the number of tobacco farmers has decreased by 40% to only 34,465, and the area utilized for tobacco plantation also plunged down by 43% to 22,704 hectares. In the Ilocos region alone, the number of tobacco farmers dropped by almost 26% from 2015 to 2017.

An effort to teach tobacco farmers planting other crops have been undergoing. However, Ilocos Sur Representative Eric Singson noted the difference in income, as high-grade tobacco costs around PHP 90 per kilo and low-grade is sold at around half the price, while a kilo of corn is only sold at around PHP 12 to 14. Also, due to the imminent increase in sin taxes, farm-gate prices of tobacco leaves will be forced to be lowered, leaving the farmers to shift to other agricultural crops, or worse leave the agricultural sector for good due to lower income.

Smuggling is also a concern as the government miss out on billions of revenue that could have been allocated for budgeting. Federation of Philippine Industries (FPI) chairman Jesus Lim Arranza said that when tobacco taxes significantly increased from 2012 to 2015, there was also a rise in illegal smuggling and trade of cigarettes. In Malaysia, it is now estimated that nearly 60% of all cigarettes sold in the country are illegal after years of raising cigarette levies. According to a 2015 Asia Illicit Tobacco Indicator report, higher cigarette taxes resulted to 6.1 billion illicit cigarettes consumed.

Small factories producing fake cigarettes bearing the name of famous brands have also emerged. Counterfeit cigarettes looms to be a huge threat as they can be as twice as harmful compared legitimate tobacco products in terms of health concerns, but at the same time are sold by only almost half of the price. Counterfeit cigarettes can be highly deceiving, as they almost look identical to real products. Also, hefty taxes on cigarettes can make the Filipino masses to resort to patronizing counterfeit tobacco products to suffice smoking habits.

Puffing Away

Last 2015, GATS revealed that 76.7% or 7 out of 10 current tobacco smokers were interested or planned to quit. Among daily smokers, 19.3% successfully quit smoking while 4.0% of those who smoked in the past 12 months recently quit smoking.

If implemented right, the SB 2233 is a great window to convince and further increase the percentage of people who are able to quit smoking. The bill would not only add funding for the full implementation of the Universal Healthcare Law, but would also be a vital cog as a preventive measure, may it be for the smoking or non-smoking individuals.

Each day, hundreds of Filipinos fall victim to tobacco related diseases. From cancer to chronic respiratory diseases, tobacco use has plagued the Filipino health enough. Every Filipino deserves to live in a country where every breath is not a concern as a possible cause for disease, and through the SB 2233, the Philippines is one step forward towards a healthier and safer community.

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