Government funnels ‘sin’ taxes to healthcare services

MANILA, Philippines - Three years after its enactment, the sin tax law provided additional state funds from cigarette and alcohol consumption, with excise taxes rising by double-digit levels month after month. The question is where did the funds go?

Republic Act 10351, passed in 2012, is considered a landmark measure under the Aquino administration that reformed excise taxes of tobacco and alcohol products almost two decades since the last reform was enacted.

As a result, revenues generated from these products more than doubled to P119.86 billion by the end of last year from P56.838 billion in 2012, figures from the Department of Finance showed. Broken down, alcohol levies rose by as high as 40 percent, while their tobacco counterparts surged by as much as 117.4 percent.

According to the law, 80 percent of additional revenues should be allocated for the government’s universal health care program (UHCP), while the remaining 20 percent should distributed nationwide for medical assistance and health assistance facilities.

According to the 2015 General Appropriations Act, the government estimated that it will earn an additional P42.9 billion as a result of the sin tax law this year. This comes on top of the P14.2 billion carried over from the 2014 and 2013 budgets.

The total of P57.1 billion will be allocated for health programs “that will come from the sin tax law,” according to the GAA’s Technical Notes uploaded on the DBM’s website.

“Of this amount, an estimated P37.3 billion will be set aside to fund universal health care expenditures for 2015, leaving a balance of around P19.8 billion,” it explained.

The UHCP consists of the following undertakings namely the National Health Insurance Program for indigent families, the Health Facilities Program to improve existing and build new hospitals and health care centers, the Health Human Resource Program and the Preventive and Promotive Health Program for disease control and prevention.

According to the DBM, “basically any item under the UHCP can be credited to the sin tax revenues.”

Broken down, the UHCP consisted of the health insurance program which aims to cover 15.4 million Filipino families with primary health care. The health facilities enhancement program, meanwhile, aims to construct 2,379 health facilities nationwide.

These include 1,661 barangay health stations, 476 rural health units, 166 local government hospitals, 66 specialized and retained hospitals of the Department of Health and 11 treatment and rehabilitation centers.

The preventive health care program, on the other hand, finances a national immunization program, programs against rabies and tuberculosis as well as the prevention of the human immunodeficiency virus (HIV-AIDS).