Philippines: Sin Tax Put Alcohol, Tobacco Atop Price Index

Source from:  Sun Star  04/12/2013

WITH the implementation of the Sin Tax Reform law this year, alcoholic beverages and tobacco products jumped at the top of the consumer price index (CPI) as shown in a National Statistics Office data.

Based on the NSO-Cordillera Regional Price Situationer released February 2013, Cordillera's CPI stands at 131.1, higher by 5.9 compared to the 125.2 CPI last February 2012.

CPI is defined as a general measure of the change in the retail prices of a market basket or collection of goods and services commonly purchased by the average Filipino household.

The said regional price situationer shows that all the provinces in the region reflect an increase in CPI due to the stand up in the average prices of goods and services. As per commodity groups, alcoholic beverages and tobacco reported the highest CPI with 166.5, followed by food and non-alcoholic beverages with a CPI of 141.3 and transportation with 130.9.

Republic Act 10351 or Sin Tax Reform 2012 signed by President Benigno Aquino III last December 2012 and took effect last January 1, aims to increase government revenues on alcohol and tobacco products that would also help elevate the quality of public health in the country through the Universal Health Care program.

With higher prices of alcoholic beverage and sin products, the government also aims to discourage the public especially the young against such vices, which also causes financial and health constraints to every Filipino family.

Meantime, the same NSO data sheet shows that the increase in the CPI also brings up the region's inflation rate to 4.7, an increase by 2.4 percent compared to the February 2012 inflation rate of 2.3 percent.

As for the average purchasing power of peso in the region, the NSO data shows that the value of peso dropped to 76 centavos compared to last year's 80 centavos; meaning the market value of goods and services worth 76 centavos in February 2006 (baseline date) is bought at one peso this February 2013.

The province of Apayao has the highest peso value at 82 centavos, followed by Abra and Kalinga with peso value of 79 centavos. Ifugao registered the lowest peso value at 74 centavos. Enditem