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Lower sin tax yields to affect UHC funding only in 2022, DBM says

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PHILSTAR

LOWER excise tax collections this year from so-called “sin” products like tobacco and alcohol will affect funding for Universal Health Care (UHC) two years down the line but will not affect budgets in 2021, the Department of Budget and Management (DBM) said.

Assistant Secretary Rolando U. Toledo said in an e-mail that by law, sin tax funding for the UHC operates at a two-year lag, with this year’s collections to support UHC in 2022.

“The decline in the 2020 sin tax collections may affect the 2022 Department of Health (DoH) budget or UHC allocation given the ‘2 years preceding’ provision of RA (Republic Act No.) 11346 and RA 11467,” Mr. Toledo said.

This year’s budget allocation for the DoH and subsidies to the Philippine Health Insurance Corp. (PhilHealth), the main implementing agencies UHC, are not affected as the allocations were based on 2018 collections.

Collections from excise taxes on “sin” products have been plunging due to the lockdown and liquor bans imposed in some parts of the country.

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According to preliminary data, excise tax collections from alcohol and tobacco products dropped 43% from a year earlier to P11.9 billion in May. In April collections fell 99%. Year-to-date collections were at P63 billion, down 39%.

Mr. Toledo noted that the UHC will also be given priority in the budget next year as it remains one of the government’s key programs.

“UHC remains a priority measure of the government. In fact, it is one of the programs prioritized under the FY 2021 Budget,” he said.

He cited a National Economic and Development Authority report, known as “We Recover as One,” which highlighted the need to improve the health system to strengthen capacity to deal with the ongoing and future health crises.

“We assure that any budget allocation as approved will be funded,” he added.

Finance Secretary Carlos G. Dominguez III said Wednesday that the DBM and PhilHealth are addressing the UHC’s funding issues to ensure that implementation goes ahead.

PhilHealth President Ricardo C. Morales on Tuesday floated the idea of delaying UHC as its financial position is being eroded by weak premium collections this year and rising payouts due to the pandemic.

The state insurer’s budget request to the DBM was P138 billion, against the P71-billion subsidy it was allocated this year. — Beatrice M. Laforga

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