How the Softdrink Tax Could Hurt You and Other Average Filipinos

What beverage do you need to get started in the morning? A good ol’ sachet of 3-in-1? How about in the afternoon? Do you like to drink a small bottle of Coke or 7-Up to get through that midday slump?

 

If so, you’re in for a rude shock. And no, this has nothing to do with the high sugar content of those drinks either (come on, that shouldn’t come as a surprise by now).

 

Last 31 May, the Philippine House of Representatives voted on and approved a move to increase excise taxes on sugar-sweetened beverages (SSB’s). Under Section 150-A of the said bill, SSB’s will be levied an excise tax of Php10 per liter of volume capacity. 100 percent natural fruit juices, yogurt, fruit-flavored yogurt beverages, meal replacement beverages, weight loss products, and all milk products, on the other hand, are exempt.

 

The bill is part of the tax reform package proposed by the Duterte administration, and was designed to offset the revenue losses that would come with lower income taxes. Ostensibly, it’s also meant to discourage citizens from consuming sugary beverages and thus thwart obesity.

 

The bill is part of the tax How the Softdrink Tax Could Hurt You and Other Average Filipinos

 

However, upon closer inspection, it seems that the new tax will actually hurt the average Filipino. Citing AC Nielsen’s research about Filipino consumer habits from 2016, the Philippine Chamber of Food Manufacturers, Inc. (PCFM) pointed out that most of the Filipinos consuming powdered juice concentrates, softdrinks, and coffee mixes are from the D and E markets. Because these consumers fall under the lower income brackets, they earn about minimum wage and perhaps even less. Thus, they will not actually feel the benefits of the lower income taxes, but will bear the brunt of the new excise taxes.

 

How bad can it be, you might ask? Take a look at the estimated price increase for some of the most popular beverages out there:

 

1. Powdered juice drinks, 1-liter sachet

 

Before: Php9

After: Php20

 

2. Bottled iced tea

 

Before: Php20

After: Php30

 

3. Bottled soda/soft drinks, per liter

 

Before: Php16

After: Php25

 

4. Instant/3-in-1 coffee, 1 serving

 

Before: Php5

After: Php8

 

5. Ready to drink juice (tetrapak), per liter

 

Before: Php20

After: Php26

 

If you’re one of those It girls (ick) who always drinks a Starbucks frappucino on the way to the gym, you’re in luck. That overpriced latte of yours isn’t affected. But if you’re just like the rest of us mere mortals, tough.

   

Are you a minimum wage earner/construction worker/security guard who relies on those 3-in-1 sachets to wake up or stay awake on the job? The unit price of those things will now rise by as much as 160 percent. Good luck making that measly paycheck last till the end of the month unless you get rid of this one “luxury” of yours too.

 

What if you’re a stay-at-home mother trying to pack a complete and healthy lunch for your kids? Prior to the SSB tax, Php9 was enough to stir up a pitcher of juice for the family, and to fill up your kid’s water jug. At Php20 a pop, your kid might have to go without if you’re already operating on a tight budget.

 

How about our sari-sari store owners? 40 percent of their total sales comes from all those soft drinks, tetra packs, and instant coffee. Unless the SSB’s terms are revised accordingly, a good number of them might be forced to close shop.

 
Softdrink Tax How the Softdrink Tax Could Hurt You and Other Average Filipinos

Image Credit: The New York Times

 

We haven’t even talked about the sugar farmers and the employees working for companies in the beverage industry yet. Once the new excise taxes hit, the demand for sugar and for beverages made with it will surely plummet. This will inevitably result in a lot of people being out of a job at the very least.

 

Sure, we need a comprehensive tax reform, and yes, we do need to curb our sugar consumption as a country too, but these things shouldn’t be done at the cost of those who are already living hand-to-mouth. We can only hope that the Senate recognizes this once they convene to revise the tax reform proposal soon.

Serena Estrella

Serena joined iRemit back in 2016, and has tormented its Marketing Head constantly ever since. To get through the rigors of writing about grave concerns like exchange rates, citizenship requirements, and PH-AU news, she likes to blast Mozart, Vivaldi, ONE OK ROCK, and Shigeru Umebayashi in the background. She does a mean Merida voice in her spare time too.

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