By: Dante B. Salvador, Jr., Michael Mo
Alcohol use disorders in the Philippines are prevalent in 5.3% of all current drinkers aged 15 years old and above. As of 2015, almost 45% of all Filipino adults consume alcohol, with males representing 69% of drinkers. In the Philippines, alcohol consumption is responsible for 4,431 deaths per 100,000 population due to liver cirrhosis, 2,875 deaths per 100,000 population due to road traffic accidents, and 2,714 deaths per 100,000 population due to cancer. Experience in other countries suggests that alcohol taxation is an effective strategy that could prevent disease, improve public health, and raise revenue.
This study aimed to simulate the public health and economic impact of updating alcohol tax rates in the Philippines in two tax scenarios: 1) Department of Health-Department of Finance (DOH-DOF): higher specific tax and 10% annual indexation rate and 2) House of Representatives (HOR): higher specific tax and 7% annual indexation rate. A two-step economic modelling approach was used to simulate the impact of tax and price changes of alcohol to revenue and health outcomes starting from 2019.
CONCLUSION AND RECOMMENDATIONS
This is the first study in the Philippines that utilized a simple and replicable modelling framework to estimate health effects of alcohol tax intervention. Unlike previous estimates, if any, this study is linked to tax structure, actual consumption, and relative risk functions.
Increasing alcohol taxation will result in more lives saved compared with the current tax structure, in addition to generating additional revenues. Our findings are in line with the conclusions of the study by Stacey et al. (2018), where the shift in disease burden as a result of tax increase produces life gains as well as raise revenues. We recommend that the government push for higher alcohol tax rates in light of this new evidence. To further strengthen the current evidence base, we recommend that impact on alcohol-related morbidity and its implications on health expenditure be modelled alongside mortality effects.