Secretary Ona: Health wins with Sin Tax Reform Law

A December 20, 2012, press release from the Department of Health

President Benigno S. Aquino III today signed into law Republic Act 10351 (An Act Restructuring the Excise Tax on Alcohol and Tobacco) otherwise known as the sin tax reform law today in Malacañang Palace, witnessed by the Department of Health, health professionals, medical societies, patients’ groups, academe, and other health advocates from civil society.

Secretary of Health Enrique T. Ona considers the passage of this landmark legislation a victory for the health of the Filipino people.

“The enactment of this law is a victory in our campaign to protect our people, especially the young and the poor, from the ill effects of smoking and excessive drinking. With higher prices, the number of young and poor people smoking and drinking excessively will be reduced significantly, resulting in lower incidence of smoking related non communicable illnesses such as lung cancer, heart attack, strokes and chronic lung disease as well as diseases associated with excessive drinking such as liver diseases and trauma secondary to drunk driving. At the same time, the additional revenues will be used to fund the expansion of PhilHealth enrolment to the second poorest 20% of our population, upgrade and modernize our hospitals and other health facilities, and expand our existing preventive and promotive programs under Kalusugan Pangkalahatan,” Ona said.

Republic Act 10351 is a consolidation of House Bill 5727 as amended and Senate Bill 3299 as amended. House Bill 5727 as amended was passed by the House of Representatives last June 6, 2012, while Senate Bill 3299 as amended was passed by the Senate last November 20, 2012. The bicameral conference committee report reconciling the two bills was ratified by both Houses of Congress last December 11, 2012. The measure, a priority of the Aquino administration, was certified urgent by the President of the Philippines to ensure its speedy passage.

“The Department of Health is grateful for the invaluable dedication of Senator Franklin M. Drilon, acting Chair of the Senate Committee on Ways and Means and Representative Isidro Ungab, Chair of the House Committee on Ways and Means and bill sponsor in their respective chambers, in ensuring that this critical health measure is passed. We also recognize the support of our health champions in the Senate and the House of Representatives as well as the Department of Finance, Bureau of Internal Revenue and our partners in the academe, medical societies, patients’ groups and other members of civil society,” Ona said.

After deducting the allocations for assistance to tobacco farmers under existing laws, 80% of the remaining balance of the incremental revenue will be earmarked for the enrollment of an additional 5.6-million families, considered the Quintile 2 or the second poorest 20% of the population, to PhilHealth, expansion of preventive and promotive programs including tobacco and alcohol control, elimination of public health threats such as filariaisis, malaria, schistosomiasis and rabies, expansion of existing immunization programs, strengthening health policy and regulations and bolstering health human resources through additional hiring and deployment of doctors, nurses, and other health care professionals. Twenty percent (20%) shall be allocated nationwide, based on political and district subdivisions, for upgrading and modernization of government hospitals and other health facilities and medical assistance.

Based on projections of the Department of Finance, the law is estimated to generate cumulative incremental revenue of P184.31 billion from 2013-2016, of which P146.7 billion is estimated to be earmarked for health for the same period.

“The Sin Tax Reform Law is the game changer that will drastically alter the landscape of our health care system for the better and ensure the provision of modern, accessible and affordable health services for our people, the essence of Kalusugan Pangkalahatan,” Ona concluded.