Opposition to DOF-backed sugar tax hike mounts

MANILA  -A trade association of local food caterers is opposing the government’s plan to increase taxes on sweetened beverages, adding another private sector group to the ranks of local organizations pushing back against a measure that is seen worsening food inflation in the country.

The Food Caterers Association of the Philippines (FCAP), an umbrella organization of small, medium and large catering companies in the country, on Friday told the Inquirer that this tax increase will cause price hikes in the beverage products that they offer, costs that will then be passed on to consumers.

“It will create a ripple effect through our consumers, our clients. So, if the government really pushes through with this, it will really disrupt the food industry. There will be price increases in different establishments,” Felix Nino Asuncion, secretary of FCAP, said in a phone interview.

Asuncion added that it would not just be their industry that would be affected, but also other businesses like restaurants and coffee shops.

“This will really be felt by the consumers. And for our part as caterers, we don’t want this [tax increase] to push through because we all know that we just came back from the pandemic. Businesses are still just bouncing back,” he said.

The FCAP official said further that they were preparing a position paper that would be sent to relevant government authorities such as the Sugar Regulatory Administration (SRA) to express these sentiments, and possibly, to include alternatives.

Additional P76B tax revenues

The Department of Finance (DOF) and the Department of Health plan to increase the tax for sweetened beverages, raising it to P12 per liter—or double the current level—and will apply to all kinds of sweeteners and not just to high-fructose corn syrup.

Finance Secretary Benjamin Diokno said they were projecting an additional P76 billion in tax revenues during the first year of implementation, as well as a 21 percent reduction in consumption.

Several trade groups representing both big and small businesses have urged the government to reconsider this tax policy direction, warning of its negative impact and questioning if it will really lead to better public health outcomes.

The Philippine Association of Carinderia and Store Owners (Pasco) said in a statement last month that the tax measure will further eat away at their already meager profits, recalling that their sales went down by 40 percent when the tax measure on sweetened beverages was first implemented back in 2015.

“Every time the government raises taxes, it is the small businesses trying to make a living and even the ordinary consumers who are heavily burdened. Every time there is a new tax imposed by the government, it is the masses who suffer,” Elilyn Gadia, national president of Pasco, said in a statement.

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