The Department of Health (DOH) is supporting the proposal to increase tobacco excise tax by as much as P90 per pack.
Health Secretary Francisco T. Duque III said at a Palace briefing that the hike in tobacco excise tax is needed to fund the Universal Health Care (UHC) program pegged at P305 billion.
Once passed, the UHC is expected to give Filipinos better access to health care, especially to the so-called poorest of the poor.
The proposal to raise tobacco excise tax to P90 per pack was filed by Sen. Joseph Victor G. Ejercito.
But Duque also noted that the UHC is not just relying on the increase on tobacco excise tax to fund its requirements, since revenues collected from proposed reforms in “sin” and mining taxes will likewise provide additional funding for the UHC.
The House of Representatives has approved its version of the bill last year while the Senate version is still in pending.
Duque said funding for UHC requires significant investment from the government.
Based on their latest estimates, the incremental cost requirements will be at P135.56 billion for the first year, ramping up to P256.31 billion on the fourth year.
“The key cost driver here is health-care financing—to provide for premium subsidies and primary care…for the Filipinos who need it most,” he said.
He also stressed that investing in UHC is actually a “wise” decision because it is equivalent to investing in people.
“Aside from the benefit of a healthier and more productive population, UHC is a key to reducing poverty in our country, thus protecting Filipinos from the high cost of care,” he added.
Duque said, with the proposal of increasing tobacco excise tax, they are estimating an incremental increase in revenue of roughly about P37.2 billion.
“The DOH is currently supporting the proposal of increasing tobacco excise tax [to] P90 pesos per pack,” he said. “This will be used to augment the budget from General Appropriations Act for funding of UHC, particularly to cover the premium payments of the noncontributory sector.”
The noncontributory sector, which is one of the proposed two types of PhilHealth membership to attain a 100 percent population coverage, includes all Filipinos who are not formally employed or remitting taxes and whose premium shall be automatically subsidized by the national government.
On the other hand, the contributory sector are those who pay such as public and private sector workers.
Duque said if the increase in the tobacco excise tax to P90 per pack will push through, the bulk of the proceeds will go to the fund of Philippine Health Insurance Corp. to help the poor who can’t afford their contribution as member.
Eighty-five percent of the proceeds will also go to the health sector. Of this 85 percent, 80 percent will go to the PhilHealth, while 20 percent will go to the Health Facilities Enhancement Program and the medical assistance to indigent patients program.
“The proposed increase in tobacco taxes is a win-win for the health of Filipinos,” he said, noting that the increase in tobacco excise tax is also estimated to bring down smoking prevalence from 21.6 percent to 15.7 percent.
Image credits: Alysa Salen