The Department of Finance (DOF) is pushing a broader and potentially more costly sugar tax, proposing excise rates of up to P20 on beverages using caloric sweeteners and P40 on those containing high-fructose corn syrup.
The proposal would also remove existing exemptions for products such as natural fruit juices, ice cream, and frozen yogurt, significantly expanding the tax base for sweetened products.
Lawmakers are separately considering a P6 excise tax on 3-in-1 beverages and fermented milk products, raising concerns about the impact of higher prices on low-income consumers and nutrition programs.
During a congressional hearing Monday, Finance Undersecretary Karlo Adriano said the government remained open to proposals as lawmakers weigh changes to the existing sweetened beverage tax.
Adriano cited the World Health Organization’s recommendation of using taxation to raise the price of sugary drinks by 20 percent, a level considered significant enough to influence consumption.
He cautioned, however, that a flat P6 excise tax would not necessarily translate into a 20-percent increase in the retail price of every covered product, suggesting that lawmakers may need to calibrate the proposed rates and their coverage.
The proposed changes would mark a major expansion of the Philippines’ sugar-tax regime, with the DOF seeking to use excise taxation for both health and revenue objectives.
The broader tax base could increase government collections while encouraging manufacturers and consumers to shift away from products with high sugar content.
But higher levies would also raise production and retail costs, potentially putting greater pressure on household budgets, particularly for lower-income consumers who rely on relatively inexpensive packaged beverages and food products.
The congressional debate is therefore likely to center on how far taxation can go in pursuing public-health goals without disproportionately increasing the cost of everyday consumption.
