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House panel detains 6 Ilocos employees, orders Imee Marcos to appear in P66-M tobacco fund misuse probe

For refusing to answer questions during a congressional hearing on the alleged misuse of Ilocos Norte tobacco funds, six employees of the province’s Treasurer’s Office were cited in contempt and ordered detained at the House of Representatives on Monday, May 29.

http://www.interaksyon.com/house-panel-detains-6-ilocos-norte-employees-orders-imee-marcos-to-appear-in-p66-m-tobacco-fund-misuse-probe/

Ilocos Norte Governor Imee Marcos, who is being accused by Majority Floor Leader Rodolfo Fariñas of allegedly diverting P66.45 million in tobacco funds to buy motor vehicles, was also subpoenaed by the House Committee on Good Government and Public Accountability chaired by Surigao Del Sur Rep. Johnny Pimentel to appear in the next hearing after skipping two previous hearings.

Pedro Agacaoili, chairman of the office’s Bids and Awards Committee and head of the provincial and planning development office; Josephine Calajate, provincial treasurer; Edna Battulayan, accountant; provincial budget officer Evangeline Tabulog; and two other employees, Genedine Jambaro and Encarnacion Gaor, were brought to the House Sergeant-at-Arms’ office where they would be temporarily held.

During the inquiry on Monday, the six employees repeatedly told the House panel that they could not recall receiving millions in cash advances or authorizing the release of funds for the purchase of various vehicles.

Fariñas grilled the employees on the allegedly anomalous purchase of minicabs, buses, and trucks in 2011 and 2012 using the share of the province from tobacco funds.

The lawmaker chastised the employees for their allegedly “dismissive” answers and also warned that cases against them would pile up if they continue trying to get off the hook.

“Magpapalusot kayo, dadami lalo ang kaso n’yo,” said Fariñas.

According to Fariñas, the vehicles were purchased through cash advances from the province’s share from excise taxes derived from locally produced cigarettes or the special support fund under Republic Act No.7171 or the Act to Promote the Development of the Farmer in the Virgina Tobacco-Producing Provinces.

The lawmaker claimed the purchase of the vehicles had violated provisions of R.A. 7171 because the law mandates Virginia tobacco-producing provinces to use 15 percent of their share of excise taxes from locally produced cigarettes for projects that will help advance tobacco farmers’ self reliance through the establishment of cooperatives and livelihood, agro-industrial, and infrastructure projects.

Also, Fariñas claimed there was no public bidding in the purchase of the vehicles in violation of Republic Act 9814 or the Government Procurement Reform Act.

Marcos’ camp on Monday said the governor was on “medical sick leave.”

Fariñas and Marcos used to be allies under what was being pushed as the One Ilocos Norte bloc, but in 2015, they cut ties due to political differences.

Imee’s mother, Imelda Romualdez-Marcos, the former first lady and wife of the late president Ferdinand Marcos, represents the second district of Ilocos Norte. Fariñas represents the First District. Both officials are in their last terms in the House and will serve only until 2019.

Recent Gains on Global Tobacco Taxation

http://blogs.worldbank.org/health/recent-gains-global-tobacco-taxation

The landmark Surgeon General’s Report on Smoking and Health, issued by U.S. Surgeon General Dr. Luther Terry in 1964, represented the first time that a government report linked smoking and ill health, including lung cancer and heart disease. The scientific evidence accumulated over the past five decades has helped us understand how tobacco use imposes a heavy health and economic burden across countries.

Action to curb tobacco use makes solid economic sense, given the high costs of tobacco-related illnesses and premature death and disability among adults in their most productive years. Smoking harms health, incomes, earning potential, and labor productivity. Smoking also undermines human capital development —a critical factor for inclusive economic and social development.

Raising tobacco taxation commensurate with affordability levels is proven to be the most effective measure to curve consumption. Tax increases are most effective in countries where the social acceptability of smoking is reduced by curtailing smoking in public places and educating the population about its negative health impact.

Contrary to the assumption that tobacco taxes are regressive, the results of recent studies done in Chile and the United States show that the benefits of this policy measured in terms of lower medical expenses and an increase in working years outweighs any relative increase in tobacco prices, largely benefitting the poor more than the rich.

Over the past decade, the World Bank Group (WBG), in partnership with the Bill & Melinda Gates Foundation and the Bloomberg Foundation, and in coordination other organizations, such as WHO, has expanded its tobacco taxation work globally to assist countries implement their public health and domestic resource mobilization efforts. Simultaneously, technical assistance is being provided to strengthen countries’ legal and regulatory capacity to control illicit tobacco trade. Support is also being provided to facilitate knowledge-sharing, building upon existing platforms such as the Joint Learning Network (JLN).

The experience of Philippines over 2012-2016 is one of the most compelling examples of ambitious national tobacco tax reform. It involved a fundamental restructuring of the country’s tobacco excise tax structure, including reduction in the number of tax tiers; indexation of tax rates to inflation; and substantial tax increases which expanded the fiscal space to fund the increase in the number of families enrolled in the health insurance scheme from 5.2 million primary members in 2012 to 15.3 million in 2015.

More recently, national governments in several countries have adopted significant tobacco tax reforms to improve public health and mobilize domestic resources, covering a total population of 200 million people. In the Ukraine, the 2017 budget includes a 40% excise tax increase on tobacco products, above the 2016 level, while maintaining a 12% ad valorem tax. It is estimated that that this measure will increase on average the excise tax burden as a share of the retail price of a pack of cigarettes from 41% in 2016 to 46% in 2017, while consumption is expected to decrease by 10%. To get a sense of the magnitude of health gains likely to result from the adoption of these tax increases, modeling work estimated that, by 2035, Ukraine’s recent tobacco tax increases will prevent 126,730 new cases of smoking-related disease; 29,172 premature deaths; and 267,098 potential years of life lost, relative to no change in tax. These reductions in disease and death are estimated to result in significant healthcare costs avoided.

As part of broad fiscal reforms approved by Colombia’s Congress, new taxes on tobacco products will nearly triple prices over 2017-2018, with annual adjustments for inflation and a mandated specific increase in subsequent years. Likewise, in Moldova, the average excise tax burden on a pack of cigarettes will increase from 39% in 2016 to 45% in 2017.

Following the introduction of the new tax regime in 2017, Armenia’s tobacco excise tax burden will double, increasing to 62% of the average retail price by 2020. In the case of Armenia and Colombia, tobacco taxation increases are part of larger tax system reforms that were included under fiscal consolidation programs.

In moving forward this agenda, we have to be clear that to be effective and sustainable, the design of tobacco tax reforms has to be grounded on a good understanding of how public policy is created and implemented in a country, including the social forces which could support or hinder the passage of strong anti-tobacco measures. We also have to be mindful that the adoption of tobacco tax reforms could be greatly facilitated if they are included as part of broad fiscal consolidation programs as shown by the recent experience in Armenia and Colombia, or as part of the formulation of annual government budgets as shown by the experience in Moldova and Ukraine.

Jokowi opts to kill tobacco bill

In an about face move that demonstrated stronger support for the country’s public health, the government said on Wednesday that it refused to deliberate the controversial tobacco bill, which seeks to boost cigarette production while dismissing the dangers of smoking.

This is the second time the government has rejected such a proposal from the House of Representatives after the bill was also voided last year following opposition from the Health Ministry to jointly deliberating the bill.

Ending his ambivalence on tobacco, President Joko “Jokowi” Widodo, whose administration had earlier issued a road map for the industry that sought to triple cigarette production to 524 billion by 2020, made a bold move that puts him against one of the country’s oldest industries and which employs millions of workers.

Cabinet Secretary Pramono Anung said Jokowi would not issue a presidential letter (Surpres) to approve the House proposal to start discussion of the bill.

Without the letter, the House cannot begin deliberations because all bills must be both discussed by representatives of the government and the House. If the House does not receive a letter from the government by the given deadline of March 19, the bill will be voided.

“There is no Surpres [to be issued by the President in this case],” Pramono told reporters at the State Palace, adding that the President had instructed Trade Minister Enggartiasto Lukita and State Secretary Pratikno to pay a visit to the House to deliver the government’s stance.

During a Cabinet meeting on Tuesday, Health Minister Nila Moeloek, Manpower Minister Hanif Dhakiri and Industry Minister Airlangga Hartarto told Jokowi that if the bill was passed into law then it would contravene a number of prevailing laws handled by the three ministries.

The Health Ministry has long campaigned for stronger tobacco control, which is crucial to saving around 200,000 Indonesians who die every year from tobacco-related illnesses and to save Rp 378 trillion (US$28.35 billion) in economic losses caused by smoking.

In his opening remarks during Tuesday’s Cabinet meeting, Jokowi, however, expressed doubts on the matter, saying that he could understand the concerns raised by the Health Ministry because the government had to take care of the health of its people, but the welfare of those who worked in tobacco industry should also be taken into consideration.

The bill was initially dropped from the 2016 National Legislation Program (Prolegnas) by the Health Ministry, which was appointed by Jokowi to lead the discussion at the House.

However, the comeback of Golkar Party politician Setya Novanto as House speaker paved the way for the inclusion of the bill in the 2017 Prolegnas.

Separately, the House Legislation Body (Baleg), which is assigned to deliberate the bill, has reminded the government to be cooperative, arguing that the bill will protect the domestic tobacco industry, while at the same time benefiting local tobacco farmers.

“If the government refuses to discuss the bill, which is the initiative of the House, we will also refuse to deliberate any bills initiated by the government in the future,” Baleg deputy speaker Firman Subagyo of Golkar said on Wednesday.

The politician suspected foreign intervention in pushing the government to kill the bill, as the draft restricted foreign tobacco companies operating in the country.

Firman said the majority of political factions at the House shared the same opinion and thus agreed to continue the deliberation.

What About Smoke Free EO?

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CASHING IN ON 240 DAILY DEATHS: LAWYERING FOR BIG TOBACCO IN THE PHILIPPINES

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Philippines: Department of Health backs Ecigs restrictions supported by WHO

Philippines are going towards one of the toughest tobacco control on Southeast Asia. The government back e-cigarette restrictions decided at the CoP7 and include vaping in smoking bans.

The presence of Alicia Bala, Civil Service Commission (CSC) Chairperson, rather than Department of Health (DOH) Secretary Paulyn Jean Ubial at the head of the Philippine delegation in New Delhi to lead the negotiations with the Worldwide Health Organization (WHO) has been deemed beyond of their expertise.

The delegation clarified that the CSC lead initiatives on tobacco control within governmental agencies. Indeed, in 2009 and 2010, CSC tobacco control initiatives have been to issue an absolute ban on smoking in all government offices and to impose to all government officials and employees not to interact with the tobacco industry unless to supervise, regulate or control tobacco production.

Department of Health agrees with WHOs position on potential risks to the health

During the last CoP7, the Framework Convention on Tobacco Control (FCTC) encouraged parties to “to prohibit or restrict the manufacture, importation, distribution, presentation, sale and use of ENDS,” in response to what the WHO describes as a “tobacco epidemic.” The global organization discourages the use of ENDS until it is deemed “safe and effective, and of accepted quality by a competent national regulatory body.”

As a signatory of the WHO’s treating since 2005, Philippines, the Southeast Asia’s second-most populous country, has committed to prioritise public health over other interests in relation to the manufacture, sale, and use of tobacco products.

To clarify the position of the Government with respect to the ecigarette, the Department of Health (DOH) declared it agrees with WHOs position on potential risks to the health of users, as these have not yet been clearly determined.

The determination of a president to have Philippines smoke-free

After his election on June 30, 2016, Rodrigo Dutertre’s government proposed increasing taxes on cigarettes and other tobacco products. To confirm president Dutertre’s determination to enforce nationally an anti-smoking law that he experimented as a mayor for 22 years of a 1.5 million citizen city, Davao, the government spokesman Ernesto Abella declared “Certainly in Davao, the sentiment and business establishments support a smoke-free Davao. The president sees it as something that’s not ideal for health… and this is part of the public well-being”. DOH Secretary, Paulyn Jean Ubial, told Reuters she was supportive with the president to curb smoking in public places, including parks, bus stations, and even in public vehicles.

During his term as a mayor in Davao, Reuters reports that he once personally forced a man to stub out his cigarette and eat it after he refused to stop smoking in a restaurant. His nickname, “The Punisher”, was inherited from his governance ruled by harsh laws like a ban on late-night drinking and karaoke, and a 10 p.m. curfew for school children in addition to his smoke-free policy in Davao.

Tobacco industry, a powerful lobby

A Sin Tax Law signed by former president Benigno Aquino III in 2012 strengthened the lobby of cigarette manufacturers and kept the tax structure on alcohol and cigarettes complicated and weak. The system was believed to encourage corruption among state agents and to constitute a loss of earnings for the DOH to manage issues arising from abuse in the use of alcohol and cigarettes.

Tobacco group trashes House sin tax bill

http://www.manilatimes.net/tobacco-group-trashes-house-sin-tax-bill/302238/

The Philippine Tobacco Growers Association (PTGA) reiterated its strong objection to the House-approved bill proposing a huge increase in cigarette excise taxes while keeping the two-tier structure even as its president Saturnino Distor disowned press reports maliciously attributing to him statements supporting the measure.

“We have not changed our position. We strongly oppose House Bill 4144 as this will only bring hardship to the farmers still reeling from the huge tax increase in 2013,” Distor said in a statement.

“I also condemn the unauthorized use of my name and the attribution to me of statements that are contrary to my views. This is the product of malicious minds serving vested interests,” he added.

Distor was quoted in media reports as throwing his support behind HB 4144 in his capacity as the Pangasinan Chapter President of the National Federation of Farmers Association and Cooperatives. (NAFTAC).

He said he has not changed his position, which he publicly stated during the hearing of the House Ways and Means Committee last Dec. 5.

“Our position is stated in Congress and is a matter of public record,” Distor said.

In fact, he said he refused to sign a position paper supporting House Bill 4144 that was offered to him by the National Tobacco Administration (NTA) during the House committee hearing.

“I repeat, the tobacco farmers will bear the brunt of this bill,” Distor said.

Earlier, public health think tank HealthJustice Philippines accused legislators of railroading a bill that would allow cigarettes to remain dirt cheap in the Philippines, contrary to the Philippine health agenda and Duterte’s promise of a Smoke Free Philippines.

May Fernandez-Mendoza, HealthJustice president, said that House Bill 4144 was approved without amendment during second reading on December 5.

It sought a P7 increase in excise taxes to P32 and P36 from the current P25 and P29 with marginal increases of 5 percent per year instead of marginal increases of 4 percent per year based on RA 10351,the current Sin Tax Law which is scheduled to bring taxes to a single rate of P30 in 2017.

Rep. Eugene de Vera of ABS Partylist sponsored the bill which was supported by all those in the super majority.
Another bill filed by Rep. Joey Salceda pushed for P40 with P5 increase per year but this was not passed during the plenary hearing.

“There is an illusion of significant increase in taxes but in reality, this is a ruse to preempt ideal taxes for health that President Duterte, being a strong tobacco control advocate, is capable of calling for,” Mendoza said.

“If this is made in line with the Philippine Health Agenda to reduce harm from tobacco use, taxes on tobacco, should be at least P40, hence significant enough to discourage smoking and bring the Philippines out of the category of those countries having the cheapest cigarettes in the world. It should also call for significant annual increases,” she added.

In 2010, a HealthJustice study projected that, in order to achieve a periodic 10 percent reduction in smoking prevalence or save 200,000 lives annually and reducing 500,000 smokers annually, taxes should have reached a unitary rate of P30 by 2014, to be increased annually based on inflation and income growth.

“However, the deliberation of the Sin Tax bill went through a lot of compromises due to the tobacco industry lobby, and was watered down such that the rate of P30 would take effect only in 2017. To make up for the lost lives, we propose a minimum of P40 excise tax per pack as a starting point in 2017,” Irene Reyes of HealthJustice said.

Mendoza also pointed out that incremental revenues from any tobacco tax increase should go back to the health sector in the form of health promotion, to strengthen communities’ capacity to undertake health initiatives and to have healthy cities.

“Investments must be made to prevent Filipinos from getting sick,” she added.

“The price of cigarettes in Philippines is cheap. If we want to protect the youth, we need to break the P100 per pack price barrier,” said Dexter Galban of One for Nursing Empowerment, a group of nursing students from universities in the Philippines.

Internal tobacco industry documents show that the industry targets the youth as replacement smokers.

According to a survey HealthJustice conducted, the youth will stop smoking if prices of cigarettes are at P5-10 per stick or P100-P200 per pack. Price of a pack of cigarettes averages between P36-65 per pack in the Philippines while it is between P100-450 in countries that are committed to stop smoking, such as Thailand, Singapore, Australia, and USA.

It has also been established that smoking contributes to poverty. A 2008 DOH study shows that the total economic costs for the four smoking-related diseases were estimated at P188 bilion a year. The total collection from tobacco products averages at P120 bilion a year and an average of P 75 billion goes to health.

8 Million Smokers Quit After Tax Hike in Philippines

Tax hikes on cigarettes have forced my Filipinos to quit, but it now seems manufacturers may be trying to flood the market before another round of tax hikes hits.

http://www.taxationinfonews.com/2016/12/8-million-smokers-quit-after-tax-hike-in-philippines/

In a recent interview the president of the Philippine Society of General Internal Medicine Antonio Miguel Dans reportedly claimed that as many as 8 million locals have quit smoking due to the effect of tax hikes on the sale of tobacco.

The latest round of tax hikes on the sale of tobacco occurred in 2012, and were aimed specifically at reducing consumption of tobacco in the country.

In 2012 the estimated smoking rate in the country was approximately 31 percent, while it has now dropped to 23 percent, a drop equivalent to approximately 8 million people.

The supply of cigarettes in the Philippines between 2012 and 2015 fell by an estimated 25.9 percent.

However, over the course of 2015 the supply had risen by 9.1 percent, as manufacturers front-load their supplies now, in order to circumvent the hoked tax rates which will be enacted next year.

The Minister also said that the tax has been supplemented by new regulations requiring packets of cigarettes to be affixed with graphic labels showing the negative effects of smoking, a measure which has also had a positive effect on smoking cessation.

Duterte urged to sign EO vs public smoking

http://interaksyon.com/article/134751/duterte-urged-to-sign-eo-vs-public-smoking

An anti-tobacco group is urging President Rodrigo Duterte to sign an executive order banning smoking in all public places across the country to fulfill a promise he made.

“We appeal to our dear president, who we know is an ardent anti-smoking advocate, to please sign the smoke-free Philippines EO now. Each day of delay would bring your people closer to becoming victims of the ills of smoking like me as well as those who are not even smoking,” New Vois Association of the Philippines president Emer Rojas, a former chain-smoker who lost his vocal cords due to cancer, said in a statement.

Rojas said the EO would, in particular, help protect non-smokers from second-hand smoke.

He also said it would help save Filipinos, especially the youth, from smoking-related illnesses. He cited the Tobacco Atlas of 2016, which shows 14.5% of Filipinos aged 13 to 15 and 23.8% of adults smoke regularly.

Records show an estimated 240 Filipinos die from tobacco-related diseases daily.

Aside from banning smoking in public places, Rojas said the EO would be the perfect complement to already existing tobacco control measures, specifically Republic Act No. 10351 (Sin Tax Law) and Republic Act No. 10643 (Graphic Health Warning Law).

Health Secretary Paulyn Ubial earlier said Duterte, who has buergers disease, is more than willing to sign the EO. Buerger’s disease is an ailment linked to heavy smoking.

The EO closely follows the smoking ban implemented in Davao City where Duterte was a long-time mayor.

Think tank: Big-time increase in cigarette taxes to force smokers to quit

http://business.inquirer.net/220377/think-tank-big-time-increase-cigarette-taxes-force-smokers-quit

Public health policy think-tank HealthJustice Philippines Monday pushed for a single-tier tax system for tobacco products, saying other proposed systems would not make smokers quit.

HealthJustice, which won the Bloomberg Award for Global Tobacco Control in 2012, said the industry-proposed two-tier tobacco tax system, which assigns lower tax rates to cheaper cigarettes or those on the “lower-tier,” would not be effective at curbing smoking.

“The two-tier tobacco tax system that the tobacco industry has been pushing for is ineffective and will not encourage smokers to quit or reduce consumption of tobacco products,” HealthJustice consultant Bianca Bacani said in a statement.

Based on government projections, the current multi-tier tax system would eventually shift to single tier by going through a two-tier stage first.

For example, a two-rate structure of P14 and P30 per pack of cigarettes would be implemented for a period of two years, moving on to a uniform rate of P30 per pack on the third year.

“If we don’t make tobacco products substantially more expensive, smokers will continue to shift to cheaper cigarettes instead of shift to a healthy lifestyle,” Bacani said.

She said smokers would sustain their habit and keep smoking. They would even reduce the number of cigarettes they consume.

“This is called downshifting, and it has taken place in many countries after they imposed the two-tier tax tobacco tax,” Bacani said.

HealthJustice also noticed that, as early as 2012, the Department of Finance reported that downshifting in alcohol and tobacco products caused the government to lose P32 billion in revenues.