Sweetened Beverage Tax in the Philippines: a Department of Health Perspective on its Successful Passage

Full text: Background: While the Philippines continue to have very high stunting rates among children, obesity has become an emerging concern with almost 10% of Filipino adolescents overweight. In response, the Sweetened Beverage (SB) Tax was proposed on June 30, 2016. Concerns against the proposal included the misconception that SBs are nutritious, the low regard of lawmakers on the problem of obesity, and the perceived low political profitability of the tax proposal among lawmakers seeking reelection. Despite organized opposition from beverage industries and allied lawmakers, the SB Tax was signed into law on December 19, 2017. This document describes strategies for its successful passage through the Philippine Department of Health's (DOH) perspective. Methods: Document review was carried out on official transcripts from public consultations and Congressional hearings. Themes related to catalyzing events and key arguments in favor of the SB Tax were identified and validated through interviews with DOH point persons involved in the policy development and legislative process negotiations. Results: Twenty-five (25) documents were retrieved from the archives of the 17th Congress. Four (4) DOH point persons responsible for the policy were interviewed. Two (2) key strategies catalyzed SB Tax passage: 1. Leveraging cross-sectoral expertise With the aim of raising revenues, the Department of Finance (DOF) and allied lawmakers merged the SB tax proposal into the proposed national comprehensive tax reform, and engaged DOH to defend the necessity of the SB tax. The DOH framed the SB Tax as a justifiable collection: to finance Universal Health Coverage reforms, and to disincentivize excessive SB consumption. There was consensus among DOH informants that merging the SB Tax within the broad tax reform secured its place in high-level policy discourse. Policy design was also favorable to both revenue and health goals. The broad tax on all sweetened non-alcoholic products can minimize potential unhealthy substitution. The simplified volumetric tax collects more revenue from those with excessive consumption, and minimizes opportunities to evade tax obligations. 2. Redirecting the health argument Lawmakers had low regard for the problem of obesity. Thus, discourse was redirected outside conventional non-communicable disease (NCD) arguments in order to win them over. The "alarming" oral health argument was leveraged, with 88% of Filipinos having dental caries and toothache being cited by the Department of Education as the top reason for school absence. The economic argument framed repercussions of unmanaged obesity and diabetes that lead to end stage renal failures - costing the government's National Health Insurance Program PhP 8 billion (USD 406.3 million) for claims on hemodialysis benefits in 2016 alone. Conclusion: The Philippine experience demonstrates that harnessing dual benefits of public policies by leveraging cross-sectoral expertise of the DOF and DOH enabled the successful passage of the SB Tax despite opposition. Redirecting the discourse for the SB Tax outside conventional NCD arguments through alarming oral health and economic figures was also key. This experience can inform countries framing their arguments for similar fiscal interventions that aim to address obesity at the population level. (author)