Press Release/ December 21, 2017
The Department of Health (DOH) commends the passage of the law on Tax Reform for Acceleration and Inclusion (TRAIN) law recently signed by President Rodrigo Roa-Duterte.
The TRAIN law provides for an increase in taxes for cigarettes and sugar-sweetened beverages that will support the DOH programs on the promotion of healthy lifestyles and the prevention and control of non-communicable diseases (NCDs). The law also supports the initiatives of the DOH on lowering the prices of medicines by exempting from the 12% VAT all medicines used for diabetes, high cholesterol and hypertension. The DOH will be monitoring drug prices to ensure that VAT exemption on medicines will redound to more affordable prices to consumers.
The World Health Organization also lauded the Philippines for being the first country in Asia to introduce such a landmark tax measure which imposes a tax of P6.00 or P12.00 per liter on all sweetened beverages, depending on the type of sweetener used.
“With millions of Filipinos who have become overweight and obese, and with diabetes now afflicting millions more of our countrymen, we support a higher pricing policy for less healthy food and beverages as part of a multi-pronged strategy to combat non-communicable diseases,” Secretary Duque declared.
The additional resources generated by this measure can be utilized in subsidizing the national government’s health care reform agenda of providing universal health care to Filipinos. Revenues earned from the tax reform can be used to fund more benefits for Philhealth, specifically in addressing the costly and harmful consequences of consuming sugar-sweetened beverages which have constituted a major expenditure for Philhealth over the past decade. These include obesity-related diseases as well as diabetes and its complications such as stroke, heart attacks, and end stage renal disease (ESRD) which are now significant contributors to the overall burden of premature deaths and disability in the Philippines.
This action by the Philippine government concurs with the World Health Organization’s (WHO) call for member states to “make use of taxation measures raising by at least 20% the retail price of sugary drinks to influence the purchasing and dietary choices of their populations,” as mentioned in the official WHO report issued in October 2016.
For greater impact, the DOH Secretary also recommended that the government complements the tax measure with other regulatory and policy instruments to reduce access to unhealthy food and encourage healthier diets among Filipinos. These include educational campaigns, informative food labelling, and subsidies for healthy food such as vegetables and fresh fruits among the economically disadvantaged.
“We thank the President and both houses of Congress for prioritizing this vital tax measure which boosts the DOH campaign for healthy lifestyles. The TRAIN law is a welcome gift of President Duterte for the Filipino people,” the health chief concluded.