Gov’t bleeds ₱1.1 trillion annually from alcohol, tobacco, vape consumption — think tank

By THE PHILIPPINE BUSINESS AND NEWS

The overall cost of alcohol and tobacco consumption in the Philippines has ballooned to a staggering ₱1.1 trillion per year, new research from policy think tank Action for Economic Reforms (AER) found, which advocates say necessitates increased health tax on these harmful products.

According to its news release, AER projected the indirect costs borne out of tobacco and alcohol consumption—including lost productivity due to illness and premature death—accounted for ₱703.5 billion in 2021.

Combined with direct healthcare expenses, the total 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.

“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. We need to tax these products to make up for the dangers they pose to society and keep these harmful products away from children and teens,” said AJ Montesa, Fiscal Policy Lead at AER.

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

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

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 deaths, however, these substances cause widespread illnesses, disabilities, and reduced productivity, leading to an estimated 3.9 million years of healthy life lost due to conditions caused by alcohol and tobacco use.

All the while, 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, ranking among the top 0.2% of the country’s most profitable businesses that year.

“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. It’s time for voters to demand policies that put public health over corporate profits,” Montesa said.