The Departments of Finance (DoF) and Health (DoH) scored a joint victory after Malacañang on Tuesday announced President Rodrigo Duterte’s approval to raise excise taxes on tobacco and alcohol products.

Presidential spokesman Salvador Panelo said Mr. Duterte approved the proposal during the 33rd Cabinet meeting last Monday.

“This is a key public health measure to reduce deaths and disabilities due to tobacco and alcohol consumption and at the same time a revenue measure to fund the Universal Health Care program,” Panelo said.

The DoF earlier had said it would back a bill filed by Sen. Manny Pacquiao raising the tobacco excise tax rates to P60.

Under the Tax Reform for Acceleration and Inclusion law, the tobacco excise tax, currently at P35, will be raised to P40 by 1 January 2022. This will then increase by four percent annually starting 1 January 2024.

The DoF, under its proposed Package 2 Plus of the Comprehensive Tax Reform Program, is also seeking to raise excise tax rates for alcohol.

Panelo also noted that President Duterte was also briefed on the implications of a reenacted budget for the first quarter of 2019, including a delay in the implementation of the salary hike for government employees, teachers, policemen and soldiers.

Panelo “Delays in the infrastructure programs and delivery of basic social services will also be observed,” Panelo said.

However, the official stressed that the upcoming plebiscite on the Bangsamoro Organic Law will not be affected as the funds for this exercise were already included in the 2018 budget.

Duterte extended the validity of the 2018 budget after Congress failed to pass the 2019 General Appropriations Act before it adjourned for the holidays last year.

A timetable earlier released by Senate Majority Leader Juan Miguel Zubiri showed the 2019 budget may not be signed by congressional leaders until 7 February.

The Palace asked Congress to pass the 2019 budget immediately.