The winning blow
If you can’t beat them, tax them. This seems to be Sen. Manny Pacquiao’s way of putting a stop to smoking in the country once and for all.
Specifically, he wants to double the excise tax on tobacco products from P30 to P60 per pack of cigarettes starting in 2018 and a nine percent increase every year after that.
In proposing Senate Bill 1599 which seeks to amend RA 10351 or the Sin Tax Reform Law, the boxing champ said the measure will reduce smoking prevalence to 19.8 percent by 2020 and will increase revenues for government.
Pacquiao has asked Senate Committee on Ways and Means chair Sen. Sonny Angara to include the bill in the Tax Reform for Acceleration and Inclusion or TRAIN.
Increasing the price of cigarettes to unaffordable levels is one sure way of reducing consumption. Coupled with the ban on smoking in public enclosed places except in designated smoking areas, Filipinos will not only find it inconvenient but also very expensive to smoke.
Instead of taxing sugar-sweetened beverages and raising taxes on petroleum products which will have a huge trickle down effect on the economy, increasing taxes on cigarettes seems to be a more effective and sure-fire health and revenue measure.
Pacquiao says that the Sin Tax Law has been successful in curbing smoking, especially among poor and rural folk. It also contributed to more than doubling the national budget for health from 2012-2016, from P57 billion to P123 billion.
The price of cigarettes in the Philippines is cheap compared to other countries. One survey showed that while one pack of one particular brand of cigarette here sells at $1.18, in Singapore it sells for $9.66, in Hong Kong $7.30, in the United States $6.77, in Japan $4.04, in Thailand $3.67, in China $3.04, in Indonesia $1.48. The price is highest in Australia at $19.82.
Even if we double our excise taxes on cigarettes, ours will still be among the cheapest.
Good for business
President Duterte has just issued an order directing the National Economic and Development Authority (NEDA) to exert utmost effort to have the limitations on the amount of foreign equity in certain economic activities lifted.
Among the areas of investment which the President wants liberalized by allowing foreigners to invest more are certain public utilities, retail trade, practice of professions, construction, mass media. Increasing the allowable foreign equity on most of these activities would however require constitutional amendment.
To have these changes effected, the President would need his leaders in the Senate and the House of Representatives to work doubly hard to convince the rest of the members to agree to such proposals.
The President and his political party, the Partido Demokratiko Pilipino (PDP), are known for their tough stance against drugs and corruption. Now, they have this distinct opportunity of changing the business and investment climate in this country.
A stable peace and order situation, coupled with a climate more conductive to foreign investors. The winning formula for a more vibrant economy? But let us not forget the common folks who are waiting for these economic gains to trickle down. After all, what the President wants is inclusive growth, not one that will just make the rich richer.
Admittedly, Duterte’s popularity in terms of what he stands for is winning over a lot a more people. Just last week, in Cebu City alone, PDP was able to attract no less than 50,000 new members to its fold. House Speaker Pantaleon Alvarez administered the oath of the new members and said that those who took their oath must support Duterte’s reform agenda, especially the war on drugs and corruption.
The next election is just around the corner and if Duterte and his partymates want to preserve their gains and push their agenda further, including the liberalization of foreign investments in economic activities that are reserved to Filipinos, then there is a need to further strengthen PDP under what can be described as difficult and trying times, and this task falls largely on the shoulders of Alvarez as secretary general.
As soon as Duterte won the elections Alvarez and other top PDP leaders, such as vice chairman Al Cusi and president Koko Pimentel, were already working behind the scenes to secure support for the president-elect’s political, economic and social agenda. Alvarez et.al. are also credited for the creation in Congress of a “supermajority” that has paved the way for the passage of the Duterte administration’s priority legislative measures.
With the PDP starting to grow exponentially in the other regions outside of its home base in Mindanao, it is now lending active support to the government’s social development efforts. PDP Cares provides humanitarian assistance to people in areas ravaged by natural and man-made calamities, among them Iligan City at the height of the Marawi conflict. Duterte’s Kitchen, another PDP initiative, continues to feed the homeless and displaced people with nourishing meals on a regular basis.
One study has noted that while the adoption of a democratic regime is not sufficient to achieve greater economic growth, democracy with good institutions might be. (Pereira and Teles, Political Institutions, Economic Growth and Democracy: The Substitute Effect). With the executive and legislative branches of our government working hand in hand to effect positive change, there just might be hope for this country.
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