Policy think tank Action for Economic Reforms (AER) has urged the Philippine government to place higher taxes on sugary drinks, saying that the health and fiscal benefits of the existing levy has lost its efficacy.
It said that the one-time increase in sweetened beverage taxes under the Duterte administration initially curbed consumption, but with prices rising steadily, its impact has weakened.
The group wants the levy indexed to inflation and broadened to cover exemptions, arguing that only then can it keep both public health and state coffers in check.
“Taxing products that exceed acceptable thresholds for sugar and sodium can help curb consumption, and, in turn, reduce the risks of non-communicable diseases such as diabetes, hypertension, and cardiovascular diseases,” AER said.
The Philippines has an existing tax policy on sweetened and carbonated beverages under the Duterte-era Tax Reform for Acceleration and Inclusion, or TRAIN law, passed in 2018. AER said that the tax had proven its effectiveness in reducing consumption and generating public revenues.
AER said strengthening the sugary drinks tax would provide a more robust foundation for a more comprehensive health tax package – one that already includes tobacco, alcohol, and eventually, unhealthy ultra-processed food products.
“Just as the SB tax addresses the harms of sweetened beverages, implementing a nutrient-based tax on unhealthy packaged foods can reduce consumption of products high in sugar, salt, and fats – nutrients of concern that contribute to diabetes, hypertension, heart disease, and other non-communicable diseases,” AER said.
It claims that such a tax not only raises funds, but also protects the health of the population, allowing Filipinos to live healthier lives, reduce medical expenses, and even support Universal Health Care programs.
Additional taxes are often unpopular and unnecessary, but sometimes taxes can be used by governments to discourage unhealthy behaviors that could lead to rising medical costs for both the persons involved, their families, and even the public health system. If it is found that the benefits outweigh the disadvantages, then it is something that any government should consider.*
