The Bittersweet Side of the Proposed Sugar-Sweetened Beverage Tax | The Good, the Bad and the Ugly

For the past few years, I have been obsessed with adulting. Read: grocery shopping. I'm wrestling with the reality of being a work-at-home mom and while being smart on a budget is a must, I'm certainly no expert at this "adulting" thing. I mean, is anyone really?

That being said, how do you budget in this day and age? Plus the fact that the implementation of House Bill 5636 could push the prices of sugar-sweetened beverages by 2 percent to as much as 140 percent. The present Duterte administration targets to implement this proposed tax in January 2018 and they intend to introduce a P10-per-liter tax on all sugary drinks.

The cost of soft drinks and carbonated drinks will be much higher than the current prices. The retail price of 1L bottle of Coca Cola will increase to P42.20 from P31 per liter. So 1.5L would probably cost around P55.

Cobra, my husband's favorite energy drink, could hike to P25 from P21.20

Sweetened milk and instant 3-in 1 coffee will also be affected by the proposed excise tax with its price increases. The 3-in-1 coffee will increase from P5 per sachet to P8 per sachet.

It will also raise the price of my daughter's fave fruit juice that could rise by 48%.

A bottled iced tea that costs P21 per bottle will increase to P30.

A pack of Yakult, for example, would cost P50.90 from the current price of P40.

The cost of powdered fruit drinks will go up from its current SRP of P9 per sachet to P19.20, and that just about doubles the price!

To be honest, I have mixed reactions about the price increases and I want to get really real with you, guys. So, let me share the good, the bad, and the ugly of this so-called Sugar-Sweetened Beverage Tax.

So let's start with the "good" part first, shall we?

The Good
  • A Revenue and Health Measure
Yep. The government wants to hit 2 birds in one stone. The Department of Finance said that the proposed P10 per liter excise tax could generate 47 billion in government revenues in the first year of implementation, hoping that it will dissuade consumers from buying unhealthy drinks as a health measure.

High sugar consumption has been identified as a prime suspect in the country's alarming rise in number of diabetes and obesity cases. The Philippines is 4th in Asia in terms of prevalence of obesity cases.

 It is high time that Filipinos get education of the harmful effects of sugar to their health. It increases the risk of  developing health problems such as diabetes, obesity, hyperacidity, tooth decay and heart problems.

A bottle of soft drinks contains 10 spoons of sugar, an amount which experts do not recommend. Roughly half the added sugar consumed by teenagers comes from drinks, one third of it from soft drinks.

Simply put, the point of SSB Tax is to make sugar-sweetened beverages more expensive so consumers would buy and drink less of them. Also, the government wants the consumers to reconsider choices often made automatically, based on either habits or environmental influences, and for the beverage suppliers to reorient their production toward healthier options. If the SSB Tax reduces the consumption of SSBs as promised then it would cut the prevalence of overweight, obesity and Type 2 Diabetes in the population.

I think it's a good thing if the result is making healthier options seem an easier choice and more affordable by way of comparison because I find them too expensive. It is a lot cheaper to get a Happy Meal than a nice tuna salad sandwich these days. Supermarkets charge more for sugar-free, dairy-free and gluten-free options as well as organic ones. Plus, a bottle of water is often no cheaper than a bottle of soft drink.

The Bad

It may cause added financial pressure and undue burden on common households already struggling to make ends meet. According to a market research, PASCO said 80% of beverage consumers are low-income earners. It would result to higher expenses but there's no increase in salaries.  

Here's my computation of our family's weekly purchases of SSBs, with and without the proposed SSB Tax. Well, this should help me cut back a lot on sugary drinks on my shopping list because of the price increases. RIP, full sugar powdered juice drink, you will be sincerely missed. I'm not willing to pay  extra though and I'd probably buy untaxed beverages like unsweetened fruit juice, or I'll just make my own fruit juice at home. 

That being said, I'm sure that there will be a significant increase in household grocery bills particularly for families in lower income groups. If this tax is passed into law, the pinch will be felt by lower income households who spend a higher proportion  of their income on sweetened drinks. High income households consider SSBs more substitutable than low income households do because they can easily afford to buy sugar free alternatives and other substitutes like nonfat milk and diet/meal replacement drinks which are more expensive. I'm not sure if taxing sweetened drinks is going to deter some Filipinos from buying these items. Some consumers who love drinking sweetened drinks might continue to buy them even though it might cost them more, while some of them may not be persuaded to buy healthier options as they will possibly substitute their sweetened drinks by buying something else like chips, ice cream, candies, or chocolates instead. And that, my friend, is still bad.

The Ugly

I'm wondering how the government can monitor such a new measure. They said the sugar tax has to be high enough to discourage consumers from buying sugar-sweetened products as a health measure. However, I think that the proposed tax is disproportionately high compared to those countries with similar taxes, and they should reduce it to minimize its effects. Like for instance, Mexico's SSB tax of 2.50 per liter compared to the proposed local tax of P10 per liter. Aside from the owners of supermarkets, common households and small sari-sari owners will be affected because almost half of their sales come from these products.

Whether it's a health or revenue measure, it would surely affect the low-income households who are among the top consumers of certain kinds of sweetened drinks. I agree with some Senators to lowering the tax imposed on such products. I hope that they will consider a fairer and more reasonable excise tax on sweetened drinks.

I have nothing against this tax but I think the issue runs much deeper. We cannot expect a tax on sugary drinks on its own to solve our country's growing health problem. However, it can help as one of the sustainable strategies to promote long term health.  Also, I've been sugar free and gluten free for 4 months and my blood sugar is normal now. It's a real struggle when you try and it takes a lot to be ever conscious of the things you eat or drink, so understand that it's not easy but it's worth it. I fully encourage everyone to lessen their sugar intake if you want to be healthier, live longer and see your kids grow old. However,  there are many factors that contribute to obesity. Say, physical inactivity, calorie intake, high body mass, smoking, and more. Not just sugar-laden drinks.

If they're really concern about the health of Filipinos, maybe they should include the candies, lollies, cakes, chocolates and other sugar-laden snacks too, to make it a purely sugar tax. But then again, when will these taxes end?

Where will the money go?

It is highly unlikely that the funds collected from this tax will go towards anything useful that is promised. I mean, we all know how corrupt some politicians are in our country. I sure hope that it will not end up lining the pockets of government officials. It will be a good thing if they will use the fund toward making fruits and vegetables cheaper and conducting health and wellness programs.

How do you feel about the proposed tax on sugar-laden drinks? Where do you stand on the matter? To tax or not to tax? Share your comments below.

1 comment

  1. Personally, I don't like these kind drinks. So nothing to worry about extra tax :P


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