Business groups and tax experts are urging the government to rethink a proposed more-than-200 percent hike in sweetened beverage excise taxes, warning that steep increases could squeeze consumers, hurt small businesses and fail to deliver the expected revenue and public health gains.
At an Arangkada Philippines roundtable on October 9, stakeholders called for a sugar-content-based tax system that would push manufacturers to reformulate products without triggering unnecessary price hikes.
“Higher rate does not necessarily mean proportionately higher revenue. The tax base moves,” said Mon Abrea, chief tax advisor of Asian Consulting Group.
Abrea warned that higher taxes could drive consumers to cut back on purchases or switch products, while manufacturers could change formulations—potentially undermining government revenue targets.
“The best-designed health tax gives businesses a commercially rational reason to make healthier products,” he said.
David Joseph Emmanuel Yap Jr., executive director of the Congressional Policy and Budget Research Department’s Socio-Economic Research Bureau, said the current volume-based tax fails to distinguish beverages by sugar content, weakening incentives for manufacturers to offer healthier options.
Small retailers also warned that higher prices could hit sales and margins, threatening family livelihoods.
“Ang maliit na negosyo po sa amin ay kabuhayan para sa aming pamilya,” said Joan Hipolito, president of the Philippine Association of Stores and Carinderia Owners.
Arangkada urged the government to further assess the economic and public health impact of the proposed tax under the ProGRESS package before moving forward.
The position is backed by the American, Canadian, European and Korean chambers of commerce, as well as PAMURI.
