Press Statement— Action for Economic Reforms— April 27, 2012


WHEN THE 15th Congress of the Philippines resumes on May 7, Action for Economic Reforms (AER) hopes that our lawmakers in the House of Representatives will take the interests of millions of poor Filipinos to heart by approving HB 5727— the Malacañang-sponsored sin tax reform bill.

We contend that if HB 5727 is passed, these reforms will sever a lethal relationship between tobacco and poverty in the Philippines— a relationship that continually compromises the health of poor smokers, and imperils their families with ever-worsening states of poverty.

Tobacco: The Poor Man’s “Sin”?

All the data we have seen verify that our country’s poor are the most endangered by tobacco-related diseases. According to a 2012 study by the Philippine Institute for Development Studies (PIDS)[i], although the top 20% of the population had a 24.8%          smoking rate in 2008, the figure was 39.9% for the bottom quintile. This is almost twice the high-income statistic (see Table 1).

But the poor not only smoke more— they spend more on tobacco products. A study commissioned by the WHO in 2006[ii] discovered that the country’s lowest income bracket spent 2.7% of monthly income on tobacco, while the highest income-ranked households used only 0.9% (see Table 2). In fact, the tobacco expenditure of the two lowest income classes of Filipino households was higher than their monthly spending on clothing, education and even healthcare (see Table 3).

Moreover, the poor are doubly vulnerable to second-hand smoke. According to the Philippines’ 2009 Global Adult Tobacco Survey, 49.1% of the poorest income bracket in urban areas were exposed to tobacco smoke in their homes everyday. The figure for the highest income quintile, meanwhile, was only 20.7%. The percentages for the rural poor are similar (see Tables 4).

Sicknesses of Poverty, not Affluence

Thus, when the diseases precipitated by chronic tobacco consumption finally burst out, it is poor households that are the most at risk. While data disaggregating mortality according to income is elusive, a lauded 2011 study led by Dr. Antonio Dans concluded that death rates from stroke, heart disease, cancer, and chronic obstructive pulmonary diseases (COPD) were highest among low-income populations in the ASEAN region[iii].

By 2008, up to 220,000 Filipinos may have died annually from tobacco-induced diseases (see Table 5). Yet unbeknownst to most, majority of these victims have come from low-income families. Tobacco-related ailments, Dans and his colleagues have stressed, are not diseases of affluence, but diseases of poverty. Ultimately, this is because smoking prevalence is far higher among the poor in the Philippines and Southeast Asia (see Table 6).

A Poverty “Timebomb”

Even when they are unable to access adequate medical attention, the losses to the poor when a family member is crippled by tobacco use are usually enough to decimate what little savings and socioeconomic prospects they may have. In 2010, reputable sources estimated that the hemorhage to the country and Filipino families’ pockets may have risen to P445.5 billion annually (see Table 7)[iv].

For the lowest 40% of families, the money devoured by medical treatment results in catastrophic expenditures. Data from the Lung Center of the Philippines shows that charity ward treatments alone demand at least P100,000 in outlays for lung cancer patients. Chemotherapy sessions, meanwhile, can cost up to P150,000 each.

The options available to poor families to cover these expenses are often bleak. Occasionally, families are compelled to assume debts from other relatives, neighbours, loan sharks. They may prematurely halt their childrens’ education, forcing them into informal, underage employment. Others still, when no other source of finance is available, may even hazard their own lives and safety by selling their bodies and body parts in the illicit human trafficking or organ trade industries.

Ironically, mounting distress usually leads some family members to intensify their consumption of vices like tobacco, jumpstarting a vicious cycle that tears further at the fabric of poor households. When a smoking-induced disease flares up in a poor family— often depriving it of a breadwinner— an uncontrolled spiral into deeper and deeper misery sometimes seems inescapable.

 Pass the sin tax reforms now!

AER has pressed for sin tax reforms to prevent tobacco from ravaging the health and life-chances of poor Filipinos. Poor families afflicted by smoking-related diseases are already in the midst of a health crisis. This crisis will worsen if our tax system for tobacco is not reformed within 2012.

The devastation dealt by tobacco among the poor works in the same manner as a time bomb. The danger exists without those affected knowing it, and it may take years before the destructive force of smoking is finally revealed. But the explosion almost takes away everything from the victims— their meagre incomes, and almost always their lives.

It is the duty of our legislators to protect the poor from this bomb. HB 5727 must be passed immediately.

(To view the attached tables, please click here)

[i] Ulep et al., “Inequities in Noncommunicable Diseases,” Philippine Institute for Development Studies Discussion Paper Series No.2012-04 (January 2012)

[ii] Baquilod et al., Tobacco and Poverty in the Philippines, Manila: National Tobacco Control Team, Department of Health, Manila College of Public Health, University of the Philippines— Manila, Philippine College of Medical Researchers Foundation, Inc., and the Tobacco Free Initiative of the World Health Organization, 2006.

[iii] Dans et al., “The Rise of Noncommunicable Diseases in Southeast Asia: Time for Action,” The Lancet 337 (2011): 680-689.

[iv] Lilita Balane, “Death, 17 Times Over,” Newsbreak Special Edition: Smoked Out, March 2010: 24-26