Government needs P682 billion for universal health care

MANILA, Philippines - The Aquino administration needs P682.1 billion for universal health care from this year to 2016, according to the latest data from the Department of Finance (DOT).

Of the amount, the government shall be providing P224.8 billion, while the other amount would come from local government units and other agencies.

The P224.8 billion would be funding various components of the universal health care including full and partial subsidies for poor families.

Of the amount, the government would be using P92.7 billion to finance the 100 percent subsidy for the health insurance premiums of the 5.2 million poorest families, data showed.

The government would also be requiring P55.3 billion to be able to provide 50 percent subsidy for the next 5.6 million poorest families.

Investment subsidies in the health sector, meanwhile, are estimated at P76.8 billion.

 “NG financing requirement for the next five years amounts to a total of P224.8 billion or a 33 percent share in the universal health care cost,” the DOT said.

This, the Finance department said, strengthens its argument for higher sin taxes on alcohol and cigarettes.

 “The additional revenues to be brought about by the proposed sin tax reform are being viewed as one of the main sources of universal health care NG financing requirement,” the Finance department said.

In 2012 alone, the government would need P50.3 billion to fund its financing requirement for universal health care, data also showed.

As such, the DOF is pushing for the passage of House Bill 5727, authored by Cavite Rep. Joseph Emilio Abaya.

The measure seeks to reform the current excise tax regimen of alcohol and cigarettes.

Specifically, the bill, currently pending at the House ways and means committee, wants to abolish the annexes and price classification freeze of certain brands.

This is expected to yield additional revenues of P60 billion a year from alcohol and cigarettes.

Under the prevailing sin tax system, 1996 brands, which cover the brands of PMFTC, are permanently classified regardless of an increase in net retail prices but post-1996 brands are classified based on current retail prices.

This happened because of Republic Act 8240 or the excise tax reform law, which was enacted in November 1996.

The law froze taxes due from tobacco and alcohol products based on net retail prices on October 1, 1996.

As a result, brands sold as low-priced cigarettes in 1996 continue to be taxed as low-priced whether or not they have been repackaged already as premium cigarettes.

On the other hand, new brands that entered the market after the law was passed are taxed according to their current net retail price.

PMFTC, which controls 94 percent of the local cigarette industry is the merged entity of Philip Morris and Fortune Tobacco. It is opposing HB 5727, saying that higher taxes would kill the local tobacco industry.