Press Release
September 25, 2019

Sponsorship speech of Sen. Pia Cayetano
On the proposal to increase tax rates on alcohol and e-cigarette products

25 September 2019

Mr. President, distinguished colleagues, today, I rise to sponsor and seek your support for Senate Bill No. 1074, which aims to increase excise taxes on alcohol, e-cigarettes, and heated tobacco products.

But before I proceed, this representation would like to share a video with you, which is a compilation of news reports that we are confronted with on a regular basis.

[play video of news]

With this in mind, this representation embarked on the task of undertaking the tax reform programs, cognizant of the objectives set by our Finance and Health Departments:

1. Increasing taxes for products with higher alcohol content;
2. Addressing inequities in our current excise tax system; and
3. Achieving the revenue objective needed to fund the government's health care program.

Mr. President, we listened to various stakeholders, questioned and analyzed relevant information provided by resource persons and experts, in both the private and public sectors. This process has led us to a singular, reasonable and patriotic conclusion to impose a significantly higher excise tax on these so-called sin products.

This is what our social conscience dictates, guided by our concern for the welfare of families and children, and in pursuit of the public good.

Mr. President, I am sure you know the lyrics to this song by Louis Armstrong:

"I hear babies cry, I watch them grow. They'll learn so much more, than I'll ever know. And I think to myself, what a wonderful world." I am reminded of that song, because indeed, we live in a wonderful world, but all this beauty in life can get distorted, and lost, and diminished by certain addictions that we now have the opportunity to address.


Wonderful lives are cut short because of people who drink and drive. We often hear about innocent people dying from road crashes-- someone who was once a father, a mother, a child, or a friend. In seconds, their lives are forever changed or wasted because a drunk person foolishly decided to take the wheel and drive.

According to Dr. Orlando Ocampo, the Chief of the Trauma division of the Philippine General Hospital, 55 percent of the injured patients they treat in the emergency room have alcohol on their breath. 25 percent of these injured patients are blood alcohol content positive. And these are just the reported cases, Mr. President. We are convinced that the number of those driving under the influence is much, much more.

Mr. President, there is glaring evidence that excessive alcohol use endangers people's health.

Alcoholism is associated with at least 39 main diseases, including liver cirrhosis, cancer, pancreatic disease, hypertensive disease, tuberculosis, diabetes, and even behavioral and psychotic disorders. Data from the World Health Organization also showed that in 2016; 4,431 per 100,000 population of Filipinos died from liver cirrhosis; 16,418 from hypertensive diseases; and 8,526 from tuberculosis. All of which were due to the excessive use of alcohol.

Meanwhile, Filipinos who died from injuries related to binge drinking reached 18,938.

Excessive drinking is a common cause of road crashes. From 2016-2018, there has been a total of 10,372 road crashes due to alcohol consumption.

Nowadays, we talk about drug addiction as we would any other serious disease. Yet, how many of us talk about alcoholism in the same way?

Alcoholism is the silent killer that keeps getting away. Because we don't talk about it. To many Filipinos, drinking alcohol is but an ordinary past time and an ultimate stress reliever.

Hindi natin siya pinag-uusapan maski na sa halos bawat barangay kilala natin kung sino ang gabi-gabing umuuwi na lasing sa kanilang mga tahanan.

The impact of our problem on alcoholism, Mr. President, is not felt by the drinker alone.

The lives of those around them - their families, bystanders, and innocent people - are also greatly affected. In fact, some of these victims have to suffer the consequences for the rest of their lives because not everyone who gets hit by a drunk driver dies.

Mr. President, as alcohol becomes cheaper with the rise in household incomes, and as alcohol becomes more affordable and accessible for vulnerable groups like the poor and the young, the risk is real that we will see these numbers grow.

Filipinos already consume, on average, 11 liters of hard alcoholic beverages per year, higher than the global and ASEAN averages of below 10 liters per year.

Global champion na po tayo, sa inuman. But that is not something we should be proud of. Maging champion sana tayo sa sports katulad ni Senador Manny Pacquiao o sa darating na South East Asian Games. Pero wag naman sa inuman. [adlib]

But on that note, Senator Manny has always been a champion, in and out of the ring. He filed Senate Bills No. 383 and 987, increasing excise taxes on alcohol, e-cigarettes, and heated tobacco products.

Global data show that on a per capita basis, Filipinos were the number one consumers of distilled spirits in 2017. We have consumed more brandy, gin, and rum than the rest of the world combined.

Meanwhile, we are the largest gin consumers per liter in the world as you can see in this chart.

(Let that sink for a while...)

When heavy drinking is involved, severe physical violence is more likely to take place.

Studies found alcohol misuse to be a significant contributor to family violence.

Ginoong Pangulo, ilan na po ba ang mga bata na nakasaksi ng pambubogbog ng nanay dahil lasing ang kanilang ama?

Millions of Filipino children endure this violence at home.

Many of them end up developing mental and emotional problems, or worse, repeating the cycle of abuse themselves. It is within this Senate's power to create safer environments for our children.

The situation has deteriorated so much that some alcohol manufacturers see young people as consumers, too.

There is no doubt that an alcohol drink presented in this kind of packaging (show Gaz) targets children and the youth as potential consumers of their products.

The moral sense of any proposed sin tax rate, Mr. President, is that it should serve as a deterrent to drinking.

It should not be so cheap as to allow minors to afford and have access to these drinks. It should not be so cheap to make it easier for drunk fathers to be wife-beaters, and for traumatized children to lead miserable lives.

Mr. President, dear colleagues, this representation wants you to know that I do not take the trust you have put in me as your Chairperson lightly. Neither do I believe that taxation is a silver bullet for this addiction. I have painstakingly studied the different rates and price points of various alcohol products and took the time to deeply consider the sentiments of the consumers as well, particularly the responsible drinkers. And so we asked the average Filipino drinker how they felt about the tax to be imposed on their favorite alcohol.

[play supportive video]

Mr. President, these are not actors, but real people on the streets. Our regular Juans. Mr. President, the proposed rates this representation will be discussing shortly can save thousands of lives.

Time and again, the manufacturers of these products have asked us to be "reasonable" with rates. In our experience, Mr. President, this argument is rarely, if at all, used to advocate for the Filipino family. Reasonable should not be code for "lower prices".

For us Senators of the Republic, a reasonable proposal is one that actively protects the Filipino family. The only way to go is that which leads to the protection of people's lives.

And this is not just me speaking as a mother or a health advocate. This is me speaking as an economics major. Demand for this product is inelastic. This means that even if we increase the prices by a great margin, the demand for these products will barely be affected.

The rates we proposed and the resulting retail prices will barely affect demand. Mr. President, kikita pa rin naman ang kanilang industriya. And although the principles of economics show this, I choose to believe that by raising the excise tax once again, the State is delivering this message: if you must drink, then drink responsibly.

With all things considered, the committee proposes these new excise tax rates on the different types of alcohol products:

Distilled spirits will be imposed an ad valorem tax of 20% and a specific tax of Php 90 per proof liter on Year 1, which will be increased by Php10 every year until Year 4. The specific tax rate will increase by 10% every year thereafter.

The reason for this is as follows: Distilled spirits often have a high alcohol content, which is why the specific tax rate is based on proof liter. From a health standpoint, a bottle with a higher alcohol content will be taxed higher than those with a lower alcohol content.

The ad valorem tax, meanwhile, addresses the range of price points among distilled liquor. Since this is based on the products' prices, the cheapest brand will be taxed lower than the most expensive brand.

Year Ad Valorem Specific Tax (per proof liter)
2020 (Year 1) 20% P90
 2021 (Year 2) 20% P100
2022 (Year 3) 20% P110
2023 (Year 4) 20% P120

For fermented liquor (beer) and alcopops, we propose a specific tax rate of P45 per liter on Year 1, increasing by Php10 every year until Year 4. The specific tax rate will increase by 10% every year thereafter.

Year Specific Tax (per liter)
2020 (Year 1) P45
 2021 (Year 2) P55
2022 (Year 3) P65
 2023 (Year 4) P75

 For wine products, there will be a specific tax of Php600 per liter for sparkling wines and Php43 per liter for still and carbonated wines. These rates will increase by 10% every year thereafter.

Type Specific Tax (per liter)
Sparkling Wines P600
 Still and Carbonated Wines  P43

These are a lot of numbers to digest so please allow me to illustrate before we leave the subject of alcohol. Let's take for example, the product category which has the highest alcohol content-- distilled spirits. In particular, one of the most popular products on the market called gin bilog, gin bulag, or gin sipol.

The suggested retail price of this product is P45.97 per 350mL bottle. The Committee proposes an ad valorem rate of 20% on the net retail price and a specific tax rate per proof liter of P90 on the first year which will increase the price by P20.59. However, I must emphasize that this 350mL bottle is not meant to be consumed by one person in one sitting. Kahit gaano kabigat pa ang problema mo. It is generally shared by three or four people and contains around 10 shots, or as we more commonly know it as "tagay". But again, this bottle contains 10 shots so the increase is only P2 per "tagay".

Two pesos, dear colleagues. Is two pesos too high a price to pay to protect our citizens from consuming a product which health advocates refer to as pure poison?


Mr. President, the Committee also sat through presentations from health advocates and the industry players to acquaint itself with the different types of e-cigarettes and heated tobacco products or HTPs. The manufacturers and distributors presented to the Committee their positions that e-cigarettes and HTPs are viable alternatives to smoking regular tobacco cigarettes.

In other words, they claim that e-cigarettes or vapes can help cigarette smokers shift to a less harmful product.

I have met smokers who attest to this. They have shifted from regular cigarette smoking to vaping or HTPs.

But the reason they smoke e-cigarettes or vapes are very different from young people, teens and even children who have now taken this up as a habit. These young ones find flavors such as watermelon, mango, strawberry, or their favorite cereal appealing, and the whole experience of vaping cool.

Mr. President, allow me to quote biobehavioral scientist, Suchitra Krishnan-Sarin, who said this:

"The first time I heard of and saw an e-cigarette, I knew right away that teens would love it. These devices are technology on a stick, a perfect fit for the smartphone generation. Some even sync with your smartphone to let you know how much you have vaped. Since I had spent a long time researching teen and adult addiction, I immediately realized that these devices fit perfectly into the teen psyche. Teens are impulsive and they love to try new things. They are also craving independence, and they love to make things their own. E-cigarettes meet these needs perfectly by allowing them the chance to both innovate and personalize their vape experience."

The industry claims that it is a safer product but medical experts have pointed out that safer does not mean safe or risk-free.

In fact the science is all very new and while experts around the world are still studying this, we have already seen and heard an avalanche of news of people who died because of lung failure in the United States - people who were consistent users of these vape products.

While investigations are ongoing, different states and cities in America are already moving to ban e-cigarettes and vapes, possibly joining a long list of countries who have already banned e-cigarettes and heated tobacco products.

The Philippine medical community is likewise one in expressing grave concern about the dangers of e-cigarettes.

Thus, Mr. President, this representation asks that we err on the side of caution.

For the sake of our children, we must regulate and tax e-cigarettes at parity with regular tobacco products. Other countries are already doing this. We should at least keep pace. Vaping is not cool when it leads our kids to the path of new addictions.

And on a final note, this Committee is tasked with the taxation of these products. But this, in no way, limits DOH and Congress to undertake steps to protect the health of the people.


With the termination of our hearings on the excise taxes on alcohol, e-cigarettes, and heated tobacco products and the delivery of this speech, which contains the recommendations of the Committee, the first part of my job is done. The second part will commence upon the period of interpellation and exchange of ideas, which I hope to have with all of you wherein I will gladly listen to your individual comments and take into consideration the collective wisdom of the body in crafting an even better version than what your humble representation has presented.

We are driven by the resolute support that President Duterte has expressed for higher taxes on alcohol and e-cigarettes. During the hearings, the medical community and civil society were united in urging Congress to regulate and use the power of taxation as a regulatory measure. Taxation is not a cure-all solution but it is necessary to curb vices and addiction and we must utilize it.

We remain cognizant however, that taxation is just ONE tool and that a comprehensive strategy is necessary and we urge DOH to work with our medical community on this through aggressive interventions and policies. I, for one will also be filing measures to support a holistic approach to these ailments/addictions.

With around 40 to 50B incremental revenues from this bill, we are closer to being able to fully implement UHC, a law that will benefit future generations. It will also help us fulfill our Sustainable Development Goals.

Dear colleagues, you have trusted this representation to study the matter and make recommendations. And I humbly ask that you review these numbers keeping in mind that our higher calling is to improve people's lives. The choice we make today can lead to healthier and happier households in the future.

Thank you, Mr. President.



I would like to take this opportunity to acknowledge the presence of Finance Secretary Dominguez and his tax reform team, led by Usec Karl Chua. I would also like to acknowledge the presence Usec Eric Domingo of the Department of Health and his team.

On that note, I will accept interpellation next week and may I request that you give your names to the Majority Floor Leader and indicate the topic you wish to interpellate on (alcohol or e-cigarettes/HTPs) to facilitate our discussion and to ensure the availability of our resource persons.

Thank you.

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