THE Senate ways and means committee on Monday opened its inquiry into the bills increasing the excise tax of tobacco products, especially cigarettes.
The proposed measures hope to find additional funding for the universal health care program, which is set to be rolled out in 2019 with the expected enactment of the UHC bill this year. However, other stakeholders raised concerns that raising taxes might further cripple the tobacco industry.
Senate Bill No. 1599, introduced by Senator Emmanuel D. Pacquiao, proposes to increase the cigarette tax to P60 per pack by 2018. Meanwhile Senate Bill No. 1605, written by Senator Joseph Victor G. Ejercito, sets the tax at P90.
During the hearing, Department of Finance (DoF) Assistant Secretary Teresa S. Habitan expressed support for the Senate bill and proposed some amendments to improve the measure.
“Among which is to broaden the coverage of the bill to include not only cigarettes but also other tobacco products. And also to dedicate the entire proceeds or the incremental proceeds from the Senate bill if it’s passed into law to funding universal health care,” she said.
Philippine Health Insurance Corp. (PhilHealth) Independent Director Anthony C. Leachon said raising tobacco taxes would help address the estimated P164 billion funding gap in the implementation of the universal health care program. He said about P257 billion is needed to fund reforms under the program with the current budget funding only P93 billion.
“Hopefully, the increase in tobacco and alcohol taxes will fund the gap for UHC and decrease the health burden. It’s a twin bill addressing health issues and generating revenue to fund the illnesses brought about by smoking and alcohol drinking,” he said.
However, the National Tobacco Administration’s Deputy Administrator Mel John I. Versoza warned that any further increase to the present taxes imposed on tobacco products may lead to job losses in the industry.
“Tobacco farmers are fewer. More than 2,000 employees in the tobacco manufacturing sector have been terminated… The consecutive tax increases since 2004 have taken their toll on the industry so it means the industry is dying,” he said.
Officials from tobacco-producing provinces also raised concerns about the possibility of lost livelihoods with the imposition of increased taxes on cigarettes.
Both Misamis Oriental governor Yevgeny Vicente Emano and La Union Sangguniang Panlalawigan chairperson Christian Rivera said the national government must ensure livelihood alternatives are provided for tobacco farmers if the proposed measure is signed into law.
“If, right away, we will increase taxes, if the company (buying from the farmers) leaves the province of Misamis Oriental or the municipality of Claveria, will the Department of Agriculture (DA) have alternative sources of livelihood? Or will the national government help us?” he said.
Senator Juan Edgardo M. Angara, chair of the Senate committee on ways and means, said the challenge was finding the “sweet spot” that would balance the interests of stakeholders.
“I don’t want to prejudge it. We’ll hear everybody out. We’ll consult with the members of the committee, the authors and see what’s the best solution,”he told reporters after the hearing.
“We’re committed to finding funding for UHC. That’s one thing I can say with certainty,” he added. — Camille A. Aguinaldo

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