Press Release
May 23, 2019

Gatchalian optimistic Senate will pass tobacco tax hike bill before 17th Congress adjourns

Senator Win Gatchalian on Monday renewed his call for the immediate passage of a bill increasing the tobacco tax to ₱70, in a bid to not only curb cigarette consumption among Filipinos but also raise funds for the government's universal health care program.

Gatchalian expressed optimism that Senate Bill No. (SBN) 2177 will be passed on third reading by the upper chamber before the 17th Congress adjourns on June 7.

"The remaining nine session days actually represent our best opportunity to pass this bill," he said. "First, the Department of Health (DOH) openly supports this bill. The Department of Finance (DOF) is also very supportive. A similar bill has been passed in the Lower House, (although) it is not the tax rate that we want to achieve."

The bill filed by Gatchalian seeks to increase the tobacco excise tax to ₱70 per pack by 2020. This will be followed by a 9% annual increase in succeeding years, which is the "sweet spot" that would give the government maximum revenues, according to the former Valenzuela City mayor.

As a result of the proposed tobacco tax hike, the average price of a pack of cigarettes will increase from ₱79.03 to ₱114.03, the senator said.

"My argument is really from a governance standpoint, and I think dapat slowly mapababa 'yung naninigarilyo para hindi tayo gastos nang gastos at para hindi paikot-ikot lang yung ating pinaggagastusan, dahil (dumarami) rin 'yung gumagamit ng sigarilyo," Gatchalian explained. "We have to break this vicious cycle. Itong mga proposal na ito, whether ₱60, ₱70, or ₱90, ang aim nila ay maputol itong vicious cycle na ito."

Citing data collated by the Global Adult Tobacco Survey from 2009 to 2015, Gatchalian noted that the country saw a mere five-percent reduction in the prevalence of cigarette smoking among adults under current tobacco control programs. He added that the average number of cigarettes consumed per day by daily cigarette smokers had actually increased marginally, from 10.6 in 2009 to 11 in 2015.

Gatchalian also pointed out that a higher tobacco tax could help ease the economic burden caused by smoking. Data from the DOH shows that the top four tobacco-related diseases alone resulted in an estimated economic burden of ₱210 billion in 2015, which is significantly higher than the ?106 billion in revenues collected from tobacco taxes in 2017.

The senator said the passage of SBN 2177 and implementation of the ₱70-per-pack tobacco excise tax could help the government generate between ₱35 billion and ₱45 billion in additional revenues. Another ₱5 billion to ₱6 billion could enter the government coffers once the 9% annual tax increase on tobacco products takes effect.

Gatchalian also pointed out the prospective health benefits of the bill, including a 1-million-strong decrease in the current number of smokers, fewer premature deaths among current smokers by half a million, a reduction in the number of would-be smokers from 10.7 million to 10.1 million, and a decline in the number of premature deaths of future smokers from 5.3 million to 5.1 million.

The former Valenzuela City representative also assured the country's 31,000 tobacco farmers that they will benefit from the passage of SBN 2177, as Congress plans to increase funding for programs that support farmers once the excise tax on cigarettes is hiked. Such programs currently receive 15% of sin tax revenues, Gatchalian noted.

"Looking at the time table, dapat by next week ma-approve na 'yan on third reading, para 'pag weekend pwede tayo mag-bicam," he said. "Pagdating natin sa following week, pwede natin i-ratify, and of course pag 'yan ay na ratify na, pwede natin i-transmit sa Executive Branch. Kaya naman dapat lang maiksihan yung period of interpellation and amendments."

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