Tax hike on sugary drinks could raise up to P34 B for PhilHealth – DOF

MANILA, Philippines – Raising the tax on sugary drinks could generate an additional P25 to 34 billion in annual funding for the Philippine Health Insurance Corp. (PhilHealth) until 2030, with another P7 billion in extra funds for programs providing aid for indigent patients and improving state hospitals and clinics.

Finance Undersecretary Karlo Fermin Adriano shared his agency’s projections as he pitched to lawmakers an increase in excise tax on sweetened drinks, saying the Department of Finance’s (DOF) proposal could yield about P74.78 billion yearly.

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“On average, revenues from the reform that could go to PhilHealth… is an additional P30 billion, and then for MAIFIP and HFEP, around P7.5 billion additional,” he told lawmakers at a congressional hearing.

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Adriano said the DOF wants to raise excise taxes on sugary drinks to curb consumption amid rising obesity and offset revenue losses from President Ferdinand R. Marcos, Jr.’s plan to increase take-home pay.

Sugary drinks are taxed at a flat P6 or P12 per liter, depending on the type of sweeteners used without yearly increases.

Revenue is split, with PhilHealth receiving 80 percent of half the collections and the health department taking 20 percent for medical aid and facility upgrades.

READ: PH has lowest excise tax on fizzy drinks among SEA peers – DOF exec

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The DOF’s proposal is aimed at increasing the tax on drinks sweetened with caloric or non-caloric sweeteners to P20 per liter, and charge P40 per liter for beverages containing high-fructose syrups.

It also seeks to index the rates by five percent annually and expand the coverage to include ice cream, ice lollies and frozen yogurt.

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If implemented, Adriano’s presentation to lawmakers showed that PhilHealth could net P25.30 billion by next year, P28.21 billion in 2028, P31.36 billion in 2029 and P34.78 billion in 2030.

The health department’s medical aid and facility program could collect P6.33 billion to P8.7 billion over the same period. /gsg