Press release – Action for Economic Reforms – 15 October 2012

Sin tax reform advocates and members of civil society said the Sen. Ralph Recto’s watered-down sin tax bill is imbued with conflict of interest due to presence of a Philip Morris plant in Batangas.

Dr. Maricar Limpin, Executive Director of the Framework Convention on Tobacco Control Alliance of the Philippines (FCAP) said Batangas is the bailiwick of Recto.

“It is easy to see why Recto would water down the sin tax bill given that there is a $300 million (P15 billion) plant in Batangas. The least Recto could have done was to inhibit himself from crafting the bill,” Limpin said.

Filomeno Sta. Ana of the Action for Economic Reform (AER) added: “Obviously, Recto is guilty of conflict of interest here. At this point in time, Recto should heed our call for him to yield the chairmanship of the Ways and Means Committee to another Senator.”

Sta. Ana also called on other senators to dismiss Recto’s version of the bill and amend it to make it more responsive to public health by curbing cigarette consumption.

Earlier, Sta. Ana renewed his call for the resignation of Recto after reports surfaced the senator met with executives of tobacco companies. The reports said Recto exhorted the executives to back the revenue recommendations of Philip Morris and that the executives were “sworn to secrecy.”

The state-of-the-art Philip Morris cigarette manufacturing plant in Tanauan City, Batangas was inaugurated in 2003. At that time, Philip Morris executives said the plant is “the most modern cigarette manufacturing facility in Asia” and would serve as the company’s manufacturing hub for Southeast Asia.

On Sunday, Presidential Legislative Liason Office (PLLO) Sec. Manuel Mamba confirmed that “big money” from the cigarette lobby is the main reason past administrations have not been able to pass a more stringent sin tax that would curb cigarette consumption and increase substantially funds allocated for public health.

Earlier, Sens. Pia Cayetano, Franklin Drilon and Miriam Defensor-Santiago criticized Recto’s version of the sin tax and promised to amend the measure on the floor.

Finance Secretary Cesar Purisima, Health Secretary Enriquie Ona and Bureau of Internal Revenue (BIR) Commissioner Kim Henares have also expressed their disappointment in Recto’s bill.

Also on Sunday, Budget Secretary Florencio Abad said he hoped debates on Recto’s bill will be “the opportunity to reemphasize the health and revenue arguments in favor of a more substantial bill.”