MANILA — Finance Secretary Carlos Dominguez is hopeful that actual needs for the government’s universal health care (UHC) program will not exceed estimates, citing possible gains of the measures against sin products.
The five-year UHC program is estimated to need PHP257 billion for its first year of implementation in 2020 while the five-year funding requirement is projected to be about PHP1.437 trillion.
Funding is programmed to be sourced primarily from sin tax collections.
In a briefing Thursday, Dominguez said the government is “only dealing with estimates because we don’t have a universal health care program.”
“I suspect that sometime in the future we will have to revisit the estimates and compare it against actual,” he said, citing that UHC is among the major government programs targeted to improve people’s productivity.
Dominguez said the estimated funding requirement would likely not be hit as he hoped that Filipinos improve their lifestyle, partly because of sin tax reforms, which increase excise taxes on tobacco and alcoholic products, e-cigarettes, and sugary drinks.
“Maybe, who knows, Filipinos will actually get into the habit of eating better, smoking less, drinking less so that the total cost of the universal health care is going to go down. That is really very important, You have to take care of yourself first,” he said.
Dominguez also hailed lawmakers’ decision to ratify on Wednesday the proposed excise tax increases for alcohol, heated tobacco, and vapor products.
Under the ratified measure, a 22 percent ad valorem tax will be imposed on top of the specific tax of PHP42 per proof liter for distilled spirits in 2020, while it is PHP47, PHP52, PHP59, PHP66 per proof liter from 2021-24. A 6-percent increase will then be implemented annually beyond 2024.
Specific tax for fermented products will be PHP35 per liter for 2020 while a PHP2 increase will be implemented annually until 2024 and a 6 – percent indexation in the succeeding years.
Sparkling and still wines will have a specific tax of PHP50 per liter during the law’s first year of implementation while the rate will be increased by 6 percent annually in the following years.
For heated tobacco products, the reconciled specific tax for the first year is PHP25 per pack and this will be increased by PHP2.50 per pack in the succeeding years until 2024 while the increase starting 2024 will be 5 percent.
Vapor products will have a PHP37 tax per milliliter of salt nicotine in the first year and a PHP5 increase until 2023 and an indexation of 5 percent in the succeeding years.
Dominguez said the current administration has won over the tax reform program’s building blocks due to the ratification of the proposed sin tax reforms, among others.
He cited that approval of sin tax hikes during the early years of the current administration resulted in the 70-percent jump in alcohol and cigarette taxes compared to the previous administration.
He said about 50 percent of that 70 percent increase in excise tax collection for sin products are accounted for by alcohol, tobacco, and e-cigarettes while around 20 percent came from “better compliance by the manufacturers” and stricter enforcement of the law.
“So both of us, the administration and the legislature, are working hand in hand on this,” he added.