Raising Alcohol Taxes: More Health and More Revenue for the Philippines

This Policy Note was written by Economics for Health. The policy note examines the epidemiology and economics of alcohol, as well as implication of strengthening taxes on alcoholic beverages, in the Philippines. Survey findings suggest that 22.3% of adolescents aged 10-19 are current drinkers (17.8% of girls and 26.5% of boys) and 62.5% of adults aged 20 and older report current drinking (46.9% of women and 77.5% of men). In addition, alcohol causes more than 17,000 yearly deaths. The burden of disease is associated with an economic burden that could ascend up to 2.3% of the Filipino Gross Domestic Product. The alcohol tax is annually increased 6%, which is below inflation, however, real income growth is expected to outpace this adjustment, keeping alcoholic beverages affordable. Alternatively, increasing the tax by 10% for beer and 25% for spirits would decrease consumption of beer and alcopops by nearly 1% and spirits by nearly 4% in the first year of implementation. Furthermore, tax revenue would increase by more than PHP 22 billion and more than 38,000 deaths would be averted through 2045. The policy note concludes with recommendations for policy makers to strengthen alcohol tax policies to reduce alcohol-related harm.