Filipinos face tobacco tax hike
By Marwaan Macan-Markar
BANGKOK - Tobacco multinational Philip Morris may have had good reason to send
out victory smoke signals when Filipinos elected Benigno Aquino to be president
in May. After all, he is a regular smoker who has said he will not quit the
habit.
But the strong tobacco industry lobby in one of the region's most lucrative
cigarette markets received a sharp indicator this month that Aquino's penchant
for a puff "when under stress" would not get in the way of the Philippines
joining the global trend to discourage the smoking habit.
Newly appointed Health Secretary Enrique Ona assured local anti-tobacco groups
that the Health Department would be pushing for higher tobacco taxes, raising
hopes for a tougher policy in a
country of 94 million people that has among the lowest taxes and retail prices
for tobacco products in Southeast Asia.
Indeed, Ona's statement was unprecedented from an arm of the government that
had often hinted that "sin taxes" - which include taxes on tobacco and liquor -
were the province of the Finance Department, say public health experts.
"We are banking on Secretary Ona's proposal to increase cigarette taxes by ...
an equivalent of 4.50 Philippines pesos [US$0.10] per stick," said Maricar
Limpin, executive director of the Philippine chapter of the Framework
Convention on Tobacco Control Alliance (FCTCA), a global network of
anti-tobacco activists.
"Tobacco tax increases will result in higher prices of cigarettes and will help
reduce smoking prevalence especially among the youth and the poor," added
Limpin in a statement after the recent meeting her group held with Ona.
Taxes on tobacco products in the Philippines stand at just 14% , in contrast to
69% in the affluent city-state of Singapore and 70% in Thailand, the highest in
the region.
Thus, while a packet of the original Marlboro, a product of Philip Morris
International (PMI), sells for US$8.70 in Singapore and $2.50 in Thailand, the
same packet of Marlboro "Reds" goes for just 0.70 cents in the Philippines.
This is cheaper than in Indonesia, where the same packet of 20 cigarettes sells
for $1, or Laos, where it sells for $1.73.
Cheap cigarette prices have long kept the Philippines in the list of the top 15
cigarette-consuming countries in the world. One report estimated that 84
billion cigarettes are smoked every day in the country.
Vietnam and Indonesia are the only other two countries from the region on that
list, with Indonesia having the highest number of cigarette smokers at some 63
million people - or 40% of Southeast Asia's 125 million smokers.
An estimated 28.3% of Filipinos above 15 years old - more than 24.6 million
people - smoke, according to non-governmental groups like Health Justice. A
Global Youth Tobacco Survey in 2007 estimated that children as young as 13 are
among the smokers, contributing to the four million youth between 13 and 15
years addicted to cigarettes.
"Our smoking prevalence is very high and it has contributed to many
smoking-related deaths," Deborah Sy, executive director of Health Justice, said
during a telephone interview from Manila. "We estimate that 10 Filipinos die
every hour from tobacco-related diseases."
These deaths are among the five million people around the world who die every
year from tobacco-related diseases, such as lung cancer, heart attacks, stroke
and chronic obstructive lung diseases, according to the World Health
Organization.
Such grim details, however, may not mean easy passage of a new "sin tax" law by
the Philippine Congress. "This expression of intent could spur the congress
into action, given that a 2004 law for measured tax increases ends by 2011,"
said Sy. "But it will have to go a long way before becoming true policy."
Aggressive campaigns by the tobacco industry to capitalize on a relatively
freer market to push cigarettes - unlike Thailand, Singapore and Malaysia -
pose another challenge.
"The tobacco industry has started targeting female smokers in the Philippines
and youth to increase their sales," said Joy Alampay, spokeswoman for the
Southeast Asia Tobacco Control Alliance, a regional anti-smoking lobby. "They
have introduced new flavors to entice new smokers."
Such a "feminine touch", as Alampay describes it, includes packets that offer
chocolate- and mint-flavored cigarettes, and those that come in pastel shades
or with floral patterns.
For its part, the tobacco industry has pointed out that it helps keep the
Philippine economy humming through the jobs it provides to thousands of farmers
in the north of the country, where tobacco is grown.
And when it matters, PMI - whose Philippine arm in February combined with local
Fortune Tobacco Corp to form a new company that is expected to control 90% of
the cigarette market - has demonstrated how high its influence goes in the
country's political hierarchy.
No less than former president Gloria Macapagal Arroyo inaugurated PMI's $35.6
million factory in Batangas province in 2003, says the website of the
Manila-based ABS-CBN News. "She lauded it for being a testament of investor
confidence in her administration."
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