In 2018, the Philippines took a bold step in curbing rising sugar consumption with the passage of the Sweetened Beverage (SB) Tax, introduced as part of a broader economic reform under the Tax Reform for Acceleration and Inclusion (TRAIN) Law. The policy imposed a P6 per liter tax on beverages sweetened with caloric and non-caloric sweeteners, and P12 per liter on those containing high-fructose corn syrup, intending to both reduce health risks and generate revenue for health. Backed by strong collaboration between the finance and health departments and civil society organizations, and a tall order from the previous administration to prioritize economic reforms, the tax was a milestone that was applauded globally.
Fast forward to today, and the picture isn’t quite as sweet. While billions of pesos in revenue funded Universal Health Care, sales and consumption of sweetened beverages remain high.
Although the introduction of the SB tax was a bold move, its legislation was subject to compromise. This was unavoidable, given that the Philippine Congress has a history of being captured by powerful lobby interests.
The final tax design was shaped by various influences during its development, resulting in a policy that fell short of its full potential. A cost-utility analysis by Oliver Huse et al. published in 2023 found that the implemented tax design is less likely to yield significant health benefits than the proposed version in House Bill 292. House Bill 292 proposed a flat P10/L tax on sweetened beverages and did not include the adopted design’s exclusions of coffee-based products and beverages sweetened with coconut sap or steviol glycosides.
The exclusion of steviol glycosides is inconsistent with current evidence. While studies neither show long-term benefit nor harm from use of any type of non-nutritive sweetener, its exemption may induce the idea that one type is better, encourage unhealthy substitution, and sustain a preference for overly sweet flavors even if calories are reduced. Other exclusions, like sweetened powdered coffee and sweetened milk and milk products, are often high in sugar and are widely consumed by all age groups, yet are currently untaxed.
Beyond design limitations, the tax’s impact has weakened over time, as its value has been eroded by inflation — a P6 tax in 2018 isn’t worth the same today. Meanwhile, the beverage industry is becoming more creative to sustain sales with strategies such as repackaging (e.g., smaller bottles such as “sakto” and “solo” as cheaper versions) and aggressive marketing that continues to target the youth and low-income communities.
These gaps in policy design and implementation are reflected in real-world sales and consumption patterns. While sales declined in the year following the tax’s implementation and further during the pandemic, it has since resumed an upward trend. According to recent Department of Science and Technology — Food and Nutrition Research Institute data, 3-in-1 coffee was among the top sources of energy for Filipino adults, while for school-age children and adolescents, the leading sources of vitamin C included orange fruit juice, lemon tea drinks, and powdered iced tea. A multi-country study also revealed that Filipino men had the highest weekly consumption and fourth highest daily consumption of SBs among the 12 populations involved.
Although the introduction of a sweetened beverage tax is a milestone in and of itself, it is high time that we adjust the policy to hit bigger milestones. SB taxes have not significantly curbed the population’s preference for or consumption of sugary drinks, especially among groups most at risk. Without timely policy adjustments, what was deemed a trailblazing measure now risks falling behind and being outpaced by industry tactics and changing consumption trends.
While the evidence is clear, opposition is vocal. Critics often say taxes hurt the poor. However, the poor are also the most vulnerable to health consequences. Well-designed taxes that discourage consumption among the most at-risk populations, when paired with reinvestment in healthcare, nutrition, clean drinking water, and healthier food environments, can be progressive: reducing health inequities and protecting households from catastrophic healthcare costs.
Another claim is that small businesses will suffer. However, when consumer demand shifts toward untaxed or healthier options, stores and vendors’ sales would typically follow. In countries like South Africa and Chile, there is no strong evidence that sugar taxes led to long-term harm to micro-retailers; rather, sales patterns simply adjusted.
It’s also true that behavior change takes more than just taxes. The SB tax isn’t a magic solution. But when combined with public education, front-of-pack labeling, and marketing restrictions, it becomes a powerful part of a strategic policy package. The UK, for instance, coupled its soft drinks levy with widespread public campaigns, leading to a 30% reduction in total sugar sold in drinks by major manufacturers.
The Philippine SB tax is not a silver bullet, but it is a critical lever we’ve only partially used.
To reclaim its full potential, the Philippine SB tax must go beyond its current form. Here’s what an “upsized” SB tax could look like, with essential add-ons to make it work better:
1. Adjust the tax for inflation. The original tax rates have already lost real value. Indexing the tax to inflation would help sustain its economic and behavioral impact, especially as product prices continue to rise.
2. Expand coverage. Exclusions like sweetened powdered coffee, sweetened milk and milk products, and products with stevia and coco-sugar need to be revisited. These products are widely consumed, still contribute to excessive sugar intake, do not offer long-term health benefits, and can reinforce a preference for sweet flavors, particularly among children and adolescents.
3. Expand and specify revenue earmarking. Ensure that tax revenues are transparently reinvested in high-impact programs, including health and nutrition, school feeding, clean water access, nutrition education, the First 1000 Days of Life, and UHC. This builds public trust and amplifies the tax’s long-term value.
4. Integrate the tax into a broader nutrition policy ecosystem. To drive sustainable behavior change, the tax must be complemented with measures such as front-of-pack labeling, marketing restrictions, and strengthened public health campaigns.
5. Based on upgraded tax administration capability, consider adopting a tiered tax structure. A tiered system, where higher sugar content means higher tax rates, can encourage reformulation (while incentivizing manufacturers with sustained sales) and healthier choices by making the healthier ones more affordable. Since the current structure was partly chosen for its ease of tax administration, this tiered system may be adopted after a rigorous review, assessment, and enhancement of the implementing agencies.
With the recent launch of WHO’s “3 by 35 initiative” — which urges all countries to implement or strengthen taxes on tobacco, alcohol, and sugar-sweetened beverages to increase their real prices by at least 50% by 2035 — the need for the timely recalibration of our SB Tax becomes all the more urgent.
As with your favorite drinks, the goal is not just to upsize; it’s to reform and customize the tax to better meet our public health needs.
We live in a country where it’s still easier and often cheaper to buy a sugary drink than a healthy meal — and it’s not just an individual dietary issue. It’s a policy failure.
The SB Tax was a bold first pour in 2018. But today, we need an upsized refill — one that’s stronger, smarter, and suits our evolving needs. With the new Congress convening this July, we are at a critical juncture. Legislators have the opportunity to go bolder: to refine a landmark policy and unlock its full potential.
This is not about denying Filipinos their choices. It’s about ensuring that companies are held accountable, consumers are well-informed, and healthier environments are built.
So, yes, the bitter truth is that our SB tax needs an upsize and more. Failing to act now risks entrenching unhealthy consumption for years to come.
Kioh C. Monato is a public health nutritionist, an evidence-based healthcare fellow (2024-2025), and an advocate for healthier food environments.
kcmonato@up.edu.ph
