Micky Pavia Vergara IV BS PSY

January 2, 2013 TTH 4:30-6:00

Aside from Christianity, the Spaniards brought tobacco in the Philippines. Tobacco was introduced by the friars during the galleon trade. Tobacco served as a lucrative business for the Friars. It provided big revenue for the Spanish Government. This prompted the beginning of Tobacco Monopoly in the Philippines. Certain regions such as Ilocos and Cagayan Valley were forced to plant tobacco. The revenue from the industry funded the Spanish defense against the Muslims. Tobacco smuggling and banditry as well as the declining revenue forced the Spaniards to abandon the production of Tobacco. Although the Spanish abandoned production, the knowledge of tobacco production remained until today. The Tobacco Industry raised health concerns among Filipinos. According to the 2009 Philippine Global Adult Tobacco Survey (GATS), an estimated 17.3 Million Filipinos aged 15 years old and above smokes. Smoking can cause lungs related diseases such as cancer. 71% of pulmonary related diseases in the world can be attributed to tobacco consumption. An estimated177 Billion Pesos is spent annually on four leading smoking-related diseases cancer, heart attack, stroke and chronic obstructive pulmonary disease. Alcohol consumption is also one of the health concerns of Filipinos. According to the study conducted by the Department of Health, the Filipinos are the heaviest drinkers in the Southeast Asian Region. Statistical data presents, 11% of the population aged 15 to 74 consumes alcohol. Alcholic beverages are among the top three commodities purchased by Filipinos. According to the DOH, alcohol consumption is a risk for cancer. Excessive consumption of alcohol can lead to liver cirrhosis or scarring of the liver. It also weakens the heart and muscle tissue. Also alcohol is a catalyst for crime. To address the health concerns regarding the consumption of tobacco and alcohol, President Benigno Aquino signed Republic Act No. 10351 or the Sin Tax Law last December 20, 2012. This bill has affected a lot of people in our country. Different reactions have surfaced regarding this newly signed bill, Republic Act No. 10351. There are positive reactions from politicians who support this Bill and from civilians. On the other hand, the ones who are directly affected by this bill think otherwise, these are the smokers and the drinkers who disagree on the implementation of the Sin Tax Law. Another sector who will be greatly affected is the Tobacco Industry. The effects can be felt from the top level of management to the very bottom which is the cigarette street vendors and tobacco farmers. The Sin Tax Law can cause the decline of the Tobacco Industry and Liquor Industry because of the increase on the prices of cigarettes and alcohol. The implementation of the Sin Tax Law can create a chain reaction. When a price of a certain commodity increases the

demand for the product decreases, as the price increases there will be less consumers who will be willing to buy cigarettes and alcohols. With fewer consumers of products covered by the Sin Taxes the industry will eventually decrease in production. The decrease in production of tobacco also translates to the decline of jobs in the industry. .Since 1997 the Sin Tax Bill has been pending in the congress causing some politicians to think that this will never be passed because of the contradictory interests and opinions towards this Bill. This Bill that has been passed and signed by the President Aquino promises large amounts of revenue that will be allocated to health benefits and medical assistance. The tobacco farmers are said to also benefit because of the access to alternative livelihood and the assistance they will get from the revenue according to the provisions of RA7171. The expected revenue from cigarettes is P23. 4 billion, P6.06 billion from distilled spirits and P4.5 billion from alcohol making the total revenue up to P33.96 billion. From this revenue 80% minus the amount for the support for tobacco farmers will be allocated to National Healthcare Insurance Program for the universal healthcare. 20% will be allocated for medical assistance all over the country and for the enhancement of hospitals or healthcare facilities and programs. From this revenue 20% will be allocated for enrollment of the poorest among the countrys population to Phil Health/ Philippine Health Insurance Corp. The Sin Tax Law also ensures that taxes will be uniformed and will avoid monopoly. According to Aurea Calica from the philstar.com, To prevent the excise taxes from getting eroded by inflation, the excise tax rates will be increased by four percent every year effective 2016 for distilled spirits and 2018 for cigarettes and beer. It is also mentioned in Calicas article that the Health secretary, Enrique Ona, thinks this law will also help reduce the population of those who drink and smoke which will eventually prevent or lessen the smoke-related and alcohol-related deceases such as lung cancer, heart attacks and liver diseases. The government exercised the basic function of rule making in this issue where the senate and other representatives discussed on what the Bill should contain and how it would address issues that will rise from this law. They defined what is legal and illegal in terms of the prices the cigarettes and alcohols should be sold by the vendors. They have laid down the responsibilities of the citizens and the government in regards to this law. The governments ability to put this into action is still yet to be looked into on how well the government will enforce the Sin Tax Law which is a part of the basic function of every government, the rule execution. Before the bill was passed and signed by the president popular consultation was applied. People from different tobacco sectors had the opportunity to voice out their concerns regarding the bill. Some 80 representatives from various labor groups were able to attend the final debate on the bill giving them the opportunity to listen.

According to Diana Mendoza, being a democratic country we should always follow the majority rule where in the wishes of the majority group or the biggest number of people will be followed. But at the same time taking not of Aristotles concept that the fundamental rights of the minority cannot be disregarded. When the senators voted on the Sin Tax Bill with no abstention it ruled to 10-9 in favor of the Sin Tax Law. But different groups such as Peoples Coalition Against Regressive Taxation, fights for the minoritys rights urging that the government should also look into the poor and the marginalized. Since 1997 people were able to express their interests, demands regarding the Sin Tax Bill, what should be included and excluded in the Bill. This is also why it has been postponed up until now, because of the disagreement from the tobacco manufactures. Now they do not longer enjoy one of the lowest tobacco taxes. A lot of people are complaining about this newly introduced Law. There are different concerns regarding the implementation of the Law because some stores started selling their cigarettes, spirits and alcohols at an increase price even before the implementation of the Law on January 1, 2013. Therefore people celebrated their new years eve with heavy pockets or did not spent much on alcohols and cigarette as much as they did before causing partygoers to minimize their enjoyment. Cigarettes are reported by AFP news to increase up to 30 pesos per pack and beer to increase by 23.50 pesos by 2017. Although, compared to other countries the prices for sin products are still low these are already considered expensive for ordinary Filipinos who do not earn that much. To some this causes them to cut back on their cigarette smoking and alcohol drinking giving one of the goals of the bill to be a success, to minimize smokers and drinkers and related diseases from these vices. Personally I agree to the Sin Tax Law. The Republic Act No. 10351 is the best way to reduce and discourage smokers. I interviewed friends regarding the increase in prices of cigarettes and alcohol. According to them, the Sin Tax will force them reduce the consumption commodities covered by the Law. Despite the burden on consumers, my friends welcomed the concept of the Sin Tax Law. Based on their interviews, the change is also for their own good, for their own health. This will help them cut down smoking and to some, stop smoking which will let them avoid smoking related diseases. Same goes to the drinkers who also find drinking to be a luxury they now cannot afford. My friends raised concerns regarding the Sin Tax Bill. Although they agree on the increase in prices of commodities they want a proper regulation in prices. The Government should implement proper regulation of cigarette and alcohol prices from top to bottom sellers. The government should also provide a ceiling price for alcohol and cigarette. This is to avoid over pricing specially. There should also be campaigns on public awareness regarding cigarette and alcohol prices.

I also agree on the increased revenue the government will collect from this law because it will be allotted for one of the urgent needs of our country, good healthcare institutions and programs for those who cannot afford proper healthcare services. There are a lot of Filipinos who belong to the poorest from the population who just goes on with their lives and not once seen a doctor for help. With this newly passed bill there is a hope that this will change, not immediately but soon. Soon good healthcare hospitals and services will be available for those who normally cant afford one. And to some these will validate their chance to fight for their right to life. But I am also concerned that because the prices are too expensive for a lot of Filipinos, arent they going to turn to other sources to satisfy they cravings? In due time the prices will double or increase every year, will this not lead to extreme prices that might make other vices like drugs look cheap and more affordable? Will this not lead to corruption from the government since the allocations of revenue are not specific? Therefore I believe that the government should specify the allocations of the revenue that will be collected from this law and people should be able to see the progress or change in the healthcare institutions and programs.