Cigarette prices may increase, 25/04/11

MANILA, Philippines – The price of local cigarettes may go up by as much as 83 percent next year based on the comparative estimation of the Department of Finance (DoF) on 7 excise tax bills pending in Congress.

The DoF estimation compared revenue estimates and price increases under the various proposals to reform the excise tax on alcohol and tobacco products which are pending in the House Committee on Ways and Means.

The DoF said the price of local cigarette could increase by 82.9 percent in 2012 should the government opt for House Bill 3465 filed by Batanes Rep. Henedina Abad and HB 3489 by Iloilo Rep. Niel Tupas Jr., both seeking to restructure the excise tax system.


House Bill 3465 seeks a unitary excise tax system and indexation of tobacco excise tax to inflation, while HB 3489 provides for an increased and unitary tax rate which shall be adjusted annually to present values using the consumer price index.

Comparatively, HB 3183, which seeks to reduce cigarette classification to two tiered-rates would translate to a 72.2 percent hike in the price of local cigarettes in 2012 while HB 3059 seeking to promote equitable sharing of costs and benefits in the alcohol and tobacco industry would push up the price of local cigarettes by 59 percent next year according to the DoF.

The DoF also projected a 20.1 percent increase in the price of local cigarettes if the government adopts House Bill 2687 filed by Negros Oriental Reps. Jocelyn Limkaichong, George Arnaiz and Pryde Henry Teves which provides for the indexation of the rates using the appropriate price index for tobacco and alcohol and proposes a unitary tax rate for each category of alcohol and tobacco products.

The DoF projected a 16.7 percent hike in prices of local cigarette if HB 2485 filed by Bohol Rep. Erico Aumentado seeking an additional P3 tax per pack of cigar and cigarettes is adopted. A minimal 2.3 percent price increase is expected with the adoption of HB 3666 filed by Antique Rep. Paolo Javier which seeks to increase the 2011 tobacco excise tax rates by adjusting these to inflation and by adding an absolute amount of P0.17 per pack across all tiers.

For 2013, the DoF estimates a 17.9 percent increase in local cigarette price through HB 2687, and 14.2 percent through HBs 3465 and 3489. (CSL)


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