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january 15, 2020

Simulating the Health Impact of Updating Alcohol Tax Rates in the Philippines

HPSR Highlight 

By: Dante B. Salvador, Jr., Michael Mo

BACKGROUND

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.

#1

CONSUMPTION

Both the DOH-HOR proposed tax structures will result in a reduction of alcohol consumption.

#2

LIVES SAVED

The simulation demonstrates that increasing tax rates for alcoholic beverages will result in population gains terms of lives saved.

#3

ECONOMIC IMPLICATIONS

Government revenues are projected to increase with the implementation of either the DOH-HOR or HOR proposal

METHODOLOGY

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.

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.

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