Alcoholism to cost Philippine economy P211 B — DOF

MANILA, Philippines — Alcohol consumption is projected to cost the Philippine economy P211.2 billion by next year if Congress does not approve a bill which increases taxes on alcoholic beverages, according to the Department of Finance (DOF).

Citing a study conducted in 2009, Finance Undersecretary Karl Kendrick Chua said the economic cost of alcohol consumption is estimated to rise by 10.69 percent to P211.2 by 2020 from P190.8 billion in 2019, before further increasing to P232.7 billion by 2021 and P256.8 billion by 2022.

“What we found, based on the study by (Jürgen) Rehm in 2009, is that the cost of alcohol is estimated to be P211 billion to the Philippine economy by 2020. And this is the combination of deaths, sickness, loss of productive time working, the caretakers, the grief,” Chua said during a presentation before the Senate ways and means committee.

According to Chua, the economic cost of alcohol consumption include the opportunities lost due to alcohol-related death, sickness or injury, as well as social cost due to the abuse caused by a drunk person.

“If you are sick, you cannot work. And if you are disabled, you need someone to take care of you. And because of the grief, the social cost of having a drunk person beating someone, sexual abuse and all,” the DOF official said.

To lessen the economic cost of alcohol, Chua said the DOF and the Department of Health are pushing for the increase in alcohol taxes, as proposed under Package 2 Plus of the Comprehensive Tax Reform Program (CTRP).

“For instance, the 30,000 deaths that is estimated by next year (due to alcohol) will be reduced by half. So that’s a big amount and that’s the main driver of the economic cost. Because if you die at 24 rather than 80, that means you have a lot of years of lost productivity. So it has a big contribution to reducing that,” he said.

“And it also reduces the binge drinking and the prevalence so, I think, we can reduce the cost by half given the DOF-DOH proposal,” Chua said.

The House of Representatives last Tuesday approved on third and final reading a bill, which seeks to raise excise taxes on alcohol, and electronic cigarette products.

However, Chua said the bill provides lower alcohol excise tax rates than the original DOF-DOH proposal.

“The rates are lower. For instance, for beer they have P32 per liter, in the DOF-DOH it’s P40 per liter.For the distilled, they have P35 per proof liter, we have P40 per proof liter,” Chua said.

As a result, he said the estimated revenue gain from the House-approved bill only reached P17 billion, about half the P33.5 billion projected revenue from the original proposal.

Despite this, Chua still expressed optimism that the Senate would approve the original rates proposed by the DOF and DOH, which is contained in the bill filed by Sen. Manny Pacquiao.

Should the original proposal be approved, the official said the funding deficit for the Universal Health Care (UHC) program for 2020 would be narrowed down to P10 billion from the current gap of P45 billion.

He explained that there is still a gap of P10 billion because the tobacco sin tax bill recently signed into law by the President provided a gradual increase in excise tax, instead of a one-time increase to P60 per pack.

“There’s really a gap so the budget will have to be reprioritized. But it’s more manageable,” he said.