Gov’t bleeds P1.1T annually from alcohol, tobacco, vape consumption — think tank

The overall cost of alcohol and tobacco consumption in the Philippines has ballooned to a staggering P1.1 trillion per year, according to new research from policy think tank Action for Economic Reforms (AER).

According to AER projections, the indirect costs of tobacco and alcohol consumption—including lost productivity due to illness and premature death—amounted to P703.5 billion in 2021.

When combined with direct healthcare expenses, the estimated economic burden of alcohol and tobacco reached P1.055 trillion, surpassing the combined 2025 budgets of the Department of Education and the Department of Health (DOH).

“The true cost of alcohol, tobacco, and vapes goes beyond what we see on the shelves, and the Filipino people are paying the price with their lives," said AJ Montesa, Fiscal Policy Lead at AER.

"We need to tax these products to compensate for the dangers they pose to society and keep them away from children and teens,” Montesa added.

In 2019, the Institute for Health Metrics and Evaluation estimated that 39,802 Filipinos died from causes related to alcohol consumption.

Furthermore, a 2021 DOH survey found that an estimated 40 percent of Filipino adults reported drinking alcohol, up from 38 percent in 2019. This includes 33 percent who engaged in heavy drinking sessions.

Meanwhile, in 2022, an estimated 16.4 million Filipinos (14.7 million males and 1.7 million females) aged 15 and older used tobacco products, according to the Global Action to End Smoking.

This ranks the Philippines 15th globally and fourth in the Pacific region in terms of tobacco users.

Over 20 percent of non-communicable disease-related deaths—including (ischemic heart diseases, stroke, diabetes, lung cancer, among others) in the Philippines are linked to tobacco use, according to Tobacco Free Kids.

Champion health taxation reforms, candidates told

With rising consumption and mounting losses, public health advocates are urging incoming election candidates to champion health taxation reforms "that hold alcohol, vape, and tobacco companies accountable."

Revenue generated from higher taxes can be allocated to universal health coverage and prevention programs, ensuring that the funds are used to counter the same harms brought on by the industries, the AER argued.

Citing the Institute for Health Metrics and Evaluation’s Global Burden of Disease report, AER warned that alcohol and tobacco use contribute to 115,000 deaths in the Philippines per year.

Beyond fatalities, these substances cause widespread illnesses, disabilities, and reduced productivity, leading to an estimated 3.9 million years of healthy life lost due to alcohol and tobacco-related conditions, AER added.

Meanwhile, both industries continue to profit while much of the financial burden falls on taxpayers and the healthcare system.

Seven of the largest alcohol and tobacco companies in the Philippines generated P506 billion in revenue in 2022, placing them among the top 0.2 percent of the country’s most profitable businesses.

“Ultimately, even Filipinos who don’t smoke or drink alcohol carry the weight of these costs. You don’t need to consume these products to be a victim of drink driving, domestic violence, or secondhand smoke," Montesa continued.

"It’s time for voters to demand policies that put public health over corporate profits," he added.