Advertisement

Higher alcohol taxes will improve population health and augment UHC funds

Font Size

Yellow Pad

Noncommunicable diseases have become the leading cause of death and illness in the Philippines. Alcohol consumption is associated with more than 10% of noncommunicable disease burden worldwide, including liver disease and cancer. The Global Burden of Disease (GBD) Compare published by the Institute of Health Metrics and Evaluation, University of Washington revealed that in 2017 alone, there were 29,506 deaths attributable to alcohol use in the Philippines. The idea that moderate alcohol consumption (“one glass of wine a day”) is safe, has recently been denounced by the World Health Organization (WHO). Their report estimates that alcohol kills one person every 10 seconds. There is no safe dose for alcohol consumption.

The cost-effective prevention and control of noncommunicable diseases, such as those associated with alcohol consumption, can be achieved through policy that targets an entire population over individuals. Among the most cost-effective interventions is increasing taxation. The Alliance for Improving Health Outcomes was commissioned by the Department of Health (DoH) through the Philippine Council for Health Research and Development to run simulations that quantified the health effects and consequences of updating alcohol tax policies in the Philippines. There are two proposed tax structures by executive agencies: Department of Health-Department of Finance (DoH-DoF) and House of Representatives (HoR).

From the 2018 baseline consumption, the simulation shows that implementation of either the DoH-DoF and HoR proposals will decrease alcohol consumption. With the DoH-DoF proposal, the consumption of spirits, beer, and wine will decrease by 18.5%, 20.5%, and 4.7% respectively five years after implementation. With the HoR proposal, the consumption of spirits, beer, and wine will decrease by 11.5%, 7.2%, and 4.5% respectively five years after implementation. The DoH-DoF proposal appears to be a more effective deterrent to alcohol consumption owing to the espousal of much higher taxes (compared to the HoR proposal) on the sale of alcoholic products.

The simulation shows that the health impact of implementing the proposed taxes will be nothing short of dramatic. The DoH-DoF proposal will prevent the death of over 57,000 Filipinos after four years of implementation. The HoR version, on the other hand, will save over 22,000 lives after four years of implementation. As much as a 51% reduction in deaths attributable to alcohol per year may be achieved if the DoH-DoF tax proposal is adopted, and as much as a 20% reduction if the HoR tax proposal is adopted.

This demonstrates that increasing tax rates for alcoholic beverages to the proposed structure of either the DoH-DoF or the HoR would result in public health gains. Even then, preventing deaths of Filipinos may just represent the proverbial “tip of the iceberg” as a result of tax intervention. Those who become ill because of alcohol use are expected to be unable to earn and will affect productivity even of family members taking care of them. Moreover, while all alcohol drinkers carry health and economic risks, the risks are greater for those with lower socioeconomic status, as they are less likely to afford healthcare when needed and earn while ill. Alcohol-related diseases also contribute to rising healthcare costs. Hence, it is imperative that increasing alcohol tax is understood as both a health and economic policy.

The government revenues raised from the higher taxes can be used to fund other public health initiatives like Universal Health Care. In settings with constraints on public finances and healthcare resources, taxing alcohol, tobacco, and sugar-sweetened beverages could provide a means to prevent disease, improve population health, and raise revenue to fund healthcare. Sweetened beverages have been taxed since 2018. On June 25, President Rodrigo R. Duterte signed into law the bill raising excise tax for tobacco products. It is now the time to update the law governing alcohol taxation.




Alliance for Improving Health Outcomes (AIHO), a partner of Action for Economic Reforms, is public health consulting firm composed of experienced and credible public health experts. Dr. Michael Mo and Dr. Dante Salvador, Jr. are public health physicians, health economists, and part of AIHO. Kim Sales is the current Deputy Director of AIHO.

Advertisement