UHC has funds other than sin tax

Amid fierce lobbying and warnings by health and anti-tobacco advocates, Senate leaders have assured that the Universal Health Care (UHC) law that would deliver healthcare to all Filipinos could still be implemented as planned even without fresh revenues from higher tobacco tax.

There is an agreement in principle to increase the excise tax on tobacco products in order to raise funds for the Universal Health Care bill and substantially reduce the smoking prevalence among the youth

Senate Health Committee chair Sen. Joseph Victor “JV” Ejercito said even if the Senate failed to approve the bill increasing tobacco tax before it adjourned for the May elections, funds remain adequate to ensure smooth implementation of UHC.

“There will be funds available for UHC,” Ejercito, who is pushing for a P90 additional tax per pack for cigarettes, said in an interview.

The senator said the 2019 General Appropriations Act and funds coming from Pagcor and PCSO will ensure funding for the UHC in its two years of implementation.

He also said the additional P18 billion “savings” that were discovered at the Senate budget deliberation of the proposed 2019 outlay should further boost the UHC.

This is contrary to the repeated claims of health advocates, the Departments of Finance (DoF) and of Health (DoH) that the non-passage of higher tobacco tax would imperil the effective roll out of the UHC.

“To the tobacco industry, don’t think we are charging everything from you. We will find the sweet spot. We do not want to kill the industry. We understand that hundreds of thousands depend on the industry for the livelihood,” Ejercito said in previous hearings on the proposed increase in tobacco excise tax.

Even Senate President Vicente “Tito” Sotto III earlier clarified that with or without sin taxes, there is enough budget for the implementation of the UHC which requires a hefty P257 billion on its first year of implementation alone.

Officials of DoF and DoH have claimed that the UHC is short of P40 billion on its first year of implementation.

The UHC listed the following as sources of appropriation for its implementation: Incremental sin tax collections: 50 percent national government share from PAGCOR, 40 percent from documentary stamp payments and mandatory contributions from PCSO, premium contributions from PhilHealth members and annual appropriations of the DoH from the General Appropriations Act.

“Let us put it this way: It isn’t imperative for the excise tax measure to pass just so we have the UHC. The UHC will be pursued even if we are not able to pass it in the 17th Congress,” Sotto stressed.

Senate President Pro Tempore Ralph Recto has also said instead of relying on tobacco tax to fund the big part of UHC, the government may consider other tax sources such as adjusting further sugar tax that could translate to P5 billion in additional revenues.

Recto said on top of their earmarked funds for UHC, Pagcor could still add with P5 billion while PCSO could afford to “donate” an additional P10 billion for the UHC.

The Senate leader said the government could also get extra funds if PhilHealth would lessen its fraudulent claims, which could lead to P5 billion in “saved” premiums.

Sen. Juan Edgardo “Sonny” Angara, chairman of the Senate Ways and Means panel, said even if the Senate failed to come out with its own tobacco tax bill, “there is an agreement in principle to increase the excise tax on tobacco products in order to raise funds for the Universal Health Care bill and substantially reduce the smoking prevalence among the youth.”

He nevertheless disclosed that “there is no consensus yet on the final tax rate.”

Angara said the committee is also inclined to increase the penalties against illicit tobacco trade to give more teeth to the law.

He said Senate will take up the unfinished bill when it resumes session after the 13 May elections.