Monsod: False Claims Against Sin Tax Bill

By: Janine Oro

Amid deliberations in the Senate on the Sin Tax Bill, Economist Solita “Winnie” Monsod challenged the “exaggerated” claims of tobacco companies to the bill’s adverse effects.

Monsod, former National Economic and Development Administration (NEDA) Chief, argued from an economic perspective what the tobacco industry have been claiming in their fights against the measure.

"It is so clear that there are so much exaggerations that are going on at dapat alisin na ang mga 'yan," she said in a news report.
 

Tobacco industries claimed that if the bill is passed, smuggling of the products such as cigarettes and liquor will be intensified, the government will lose money, the farmers and retailers will lose livelihood, the economy that benefited much from the industry will be greatly affected and the industry itself will die.

She explained that “there is no relationship between price and illicit trade. Smuggling is an enforcement issue. If we use that same argument, then we should have no elections dahil nagdadayaan naman eh.”

Monsod also questioned the industry’s presented figures, during the second Senate hearing, which suggest that a number of 840, 146 farmers is employed in tobacco farming with a total land area of 32, 235 hectares

“If we divided the 840,000 with the 32,000 hectares, that means there are 26 farmers per hectare. Doesn’t that sound ridiculous to you?” Monsod added. “If we assume the 85,000 annual incomes per hectare and divide it by 26, that means the average annual income is 3,269.23 pesos. How can anybody survive with 3,200 pesos a year?”

According to a study conducted by the UP College of Law and Health Justice in 2010 mentioned in the DOH’s official publication HEALTHBeat, the industry only employs 1% of the workforce, suggesting that this would less likely to affect in a large scale. The decline would happen gradually, therefore giving the government the opportunity to provide alternative jobs 

that would enhance more productivity in the Filipino workforce.

Monsod also debunked the claim that the Philippine economy benefits some P103.8 billion from the tobacco industry.

As an economist, Monsod demonstrated the effects on both the demand and the supply of the products affected. She stressed that “with the higher prices of tobacco products, only a least would be able to buy, consequently, less will also be willing to sell.”

DOH Secretary Enrique Ona also highlighted that the proposed Sin Tax bill aims to reduce the number of the youth being engaged in such addictions, especially those from the poor families. 

Statistics show that at the age of 15, teens have already been smoking and with the price of tobacco products in the country even a school-aged could afford to buy a cigarette stick.

The said bill was also said to contribute in providing revenues for the department’s Universal Health Care Program.