DOF Sec. Gary B. Teves' Keynote Speech during the June 22, 2010 Health Promotion Funding and Tobacco Tax Seminar

1. Sec. Gary B. Teves’ Speech
Health Promotion Funding and Tobacco Taxes Seminar
Malcolm Theater, UP College of Law
22 June 2010
Fellow workers in government, health advocates, civil society partners, friends from the media,
members of the academe, distinguished guests, ladies and gentlemen, good morning!
We would like to thank the HealthJustice and the Southeast Asia Tobacco Control Alliance
(SEATCA) for organizing this forum which seeks to bring together potential partners in
advocating health promotion funding through tobacco taxes and drawing broad-based support
for tobacco tax increase.
Of course, we, at the Department of Finance (DOF), are very much interested in your second
objective, which is to generate broader support for an increase in tobacco taxes.
As you all know, the sin tax reform which included the proposed increase in tobacco taxes had
been in our legislative agenda for quite some time already.
We have been called a number of names in pushing for this reform measure. We have been
called anti-poor, insensitive, and even anti-business as we continue to stand by this proposal.
Despite the sustained attacks on the Department (and even directly to me), we have always
believed that we need higher sin taxes not just because of the additional revenues it would bring
in but because it also serves a sumptuary objective which is to reduce tobacco and alcohol
consumption.
While we acknowledge that tobacco control will continue to be a challenging task as long as
smoking remains an absolute right of every individual, government and policymakers are not
without means to address the health problems caused by tobacco consumption.
Alongside supply controls are tobacco taxes which are considered the single most cost-effective
policy tool to reduce tobacco use.
A study by the International Tobacco Evidence Network showed that a 10% price increase in
low-income to middle-income countries like the Philippines could reduce tobacco demand by
8%.
Even US President Barack Obama was convinced that the best way to address cigarette
smoking and improve healthcare is through higher taxes on tobacco products. Thus, the first
law that he signed when he assumed office was the Children’s Health Insurance and Federal
Tobacco Tax Increase Law which imposed an almost 160% increase in tobacco taxes from
$0.39 cents to $1.01 per pack.
Thus, we hope that you will support us in our proposal to raise the excise tax on tobacco
products. We hope that our health sector will have more involvement in pushing for this reform
measure because they will ultimately benefit from higher tobacco taxes.
We hope that the new administration will listen to our collective voice if they are really serious in
putting the health agenda at the top of their priorities.

2. We hope that they will listen to a Social Weather Station (SWS) survey commissioned by the
Department of Health in 2007 which showed that a large 82% of Filipinos were in favor of
significantly increase cigarette taxes.
We hope that they will listen made by the International Monetary Fund (IMF) which showed that
the Philippines has the lowest cigarette tax burden and incidence among its ASEAN neighbors,
as Finance Undersecretary Gil Beltran will show to you later in his presentation.
We hope that they will see how far the billions of pesos in additional revenues from higher
tobacco taxes (P9 billion in the first year and P23 billion in the second year) could improve
healthcare and provide better social services to a greater number of Filipinos.
In closing, let me quote US President Obama in his speech to the US Congress about his
healthcare plan: “Put simply, our health care problem is our deficit problem. Nothing else
even comes close.”
Indeed, the fiscal sector and the health sector are intrinsically linked. We need each other’s
support to address our common problems. We need each other’s cooperation for sustainable
solutions that will bring us to our common goal of improving the quality of life of our people.
And we believe that this forum bring us one step closer to achieving that goal.
Thank you and good morning to all.