Philippines: Lawmaker Files Minimum Cigarette Price Bill

Source from:  Manila Bulletin (ph)  10/08/2014

Amid the proliferation of cheaper cigarette brands, a pro-administration lawmaker filed a proposed measure that seeks to impose a minimum floor price on tobacco products.

Based on House Bill No. 5013, Romblon Representative Eleandro Jesus F. Madrona is proposing for a minimum cigarette price (MCP) beginning next year, which aims to deny the youth in accessing cheaper cigarette brands.

Under HB-5013, cigarette makers cannot sell their products below P38 per pack or P1.9 per stick by January 2015, and that floor price would increase to P44 per pack the following year and by 2017, the minimum retail price would be at P51 a pack.

"The mere recitation of the minimum cigarette price would be enough for a young smoker to reconsider and realize that buying cheap is no longer a pocket-friendly option," Madrona stated in his explanatory note.

Based on a Social Weather Stations (SWS) survey, which was commissioned by the Department of Health, the country's overall smoking incidence had not significantly decreased despite the enactment of the new sin tax law in 2012.

"This means that there are still 20 million smokers today in the Philippines, the same number of smokers as in 2011, prior to the tax increase. Based on the same SWS survey, 45 percent of smokers merely switched to cheaper brands when tax increased," Madrona said.

Madrona, chairman of the House committee on accounts, blamed the proliferation of "super cheap" cigarette brands for the meager change in the overall smoking incidence in the Philippines.

Earlier, Health Secretary Enrique Ona said he was open to supporting the proposal of a floor price or minimum price on cigarettes to counter smuggling and reduce youth access to tobacco products.

Following the enactment of the new sin tax law, intense competition among tobacco players has resulted in proliferation of cheaper cigarettes sold in the market, which could be bought by youth smokers, thus, negating the objectives of the law.

Internal Revenue Commissioner Kim S. Jacinto-Henares was the first who floated the floor price concept as a counter proposal when pressed by anti-tobacco groups to have the sin tax law amended anew to usher in a new round of higher excise taxes.

During the recent forum on sin law reform law held early this year, Jacinto-Henares said that "if there's something you [healthadvocates] should lobby for, I think you should lobby for a law which will require a minimum floor price." Enditem