The Beverage Industry Association of the Philippines expressed opposition to a bill in Congress that plans to impose a 10-percent tax per liter of sugar-sweetened beverages.
The group whose members include softdrink and other beverage producers said House Bill No. 292 would not achieve its targets of curbing obesity and increasing government revenue collection, but instead raise the prices of several consumer goods and hinder economic growth.
The House ways and means committee recently said it wanted to adopt House Bill No. 292 as a part of the tax reform plan.
The group cited research findings showing that compared with consumers in other countries, Filipinos were not over-consuming sugar-sweetened beverages. “This is due to the smaller package size and less frequent consumption by Filipinos,” it said.
It referred to statistics from the World Health Organization in 2015 showing that of 192 countries in the world obesity index, the Philippines ranked only 155th.
“Furthermore, it is not in the higher tier of the Asian countries,” it said.
The association also said that obesity had many causes aside from eating too much sugar.
The proposed tax is also predicted to raise the prices of consumer goods and to ultimately “have the most impact on the poor and poorest segments,” it said.
It said studies showed that instant coffee would see a price increase of 48.41-percent after an excise tax of P10 per liter was imposed, raising the price of a sachet of coffee from P5 to P8.
Powdered concentrate will go up in price by 108.61 percent, or from P9 per sachet to P19, while prices of tea drinks will jump 52.48 percent, from the current P20 to reach P30 per bottle, it said.
The beverage group said that besides hurting the beverage industry, “the proposed tax will result in reduced government revenues, economic contraction and job losses.”
Statistics from the University of Asia and the Pacific Economic Impact Study (2016) and AC Nielsen Data showed the proposed tax would affect the income of sari-sari stores, representing 91 percent of retail stores in the country, as 31 percent of sari-sari store sales were coming from carbonated beverages, the group said.
A possible decline of about P20 billion in sales of sugar-sweetened beverages and a P51-billion drop in the revenue of related industries is also seen that may result in 39,000 direct and indirect jobs being affected and a 1.5-percent increase in unemployment, it said.