May 18, 2019
THE Departments of Finance (DoF) and Health (DoH) warned on Friday that the government would not be able to fully implement its Universal Health Care program — as it would be short of P63 billion in funds — if the planned sin-tax increase fails to pass into law.
In a joint briefing, Finance Secretary Carlos Dominguez 3rd said the government would need at least P258 billion by 2020 to implement the program, of which only P195 billion would be raised from its current funding sources —the 2019 national budget, the Philippine Amusement and Gaming Corp. and the Philippine Charity Sweepstakes Office.
“There will be gaps, which means there will be people who will not be served. Some may be served, but not all expenses will be covered,” Dominguez said.
The new set of excise-tax rates jointly proposed by both departments backs the proposal of Sen. Emmanuel “Manny” Pacquiao under Senate Bill 1599.
The measure seeks to increase the current uniform excise tax rate on cigarettes and other tobacco products from P35 to P60 per pack in the first year of its implementation and an additional 9 percent annually thereafter.
Excise taxes on alcohol are also sought to raise to at least P40 per liter and impose a unitary tax system on fermented liquors.
Without adjusting the current sin taxes to at least the rates proposed by Pacquiao, Dominguez said the cumulative funding gap by 2024 would reach P426 billion.
In a statement released on Friday, the DoF said that “without a new sin tax reform law and at current premiums, members of the Philippine Health Insurance Corp. (PhilHealth) will continue to be covered for only 18 primary care drugs and seven conditions while shouldering 90 percent of the cost of prescribed medicines.”
“But if the current Congress gets to pass the law before it adjourns in June, PhilHealth coverage will expand to cover 120 drugs and there will be no limit on primary care treatment,” it added.
“The passage of a higher excise tax on tobacco and alcohol products will provide the government with the needs to curb vices and undesirable behavior, while at the same time generate revenues to fully fund the” program,” Dominguez said.
For his part, Health Secretary Francisco Duque 3rd warned that “failure to increase sin tax rates now will put the the lives of 250,000 Filipinos at risk every year.”
“It’s for our people. It’s been a long time since we aspired for this (healthcare program),” he added.
“We urge both houses [of Congress] to give due priority to this reform. Approve the Senate version in the bicameral conference and ratify it immediately,” Dominguez said.
Meanwhile, both departments are mulling over taxing “heat-not-burn” tobacco products, which the Lucio Tan-led holding company LT Group Inc. is expecting to bring into the market this year.
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