Small retailers and trade organisations protest against Philippines sugar tax

By Lester Wan contact

- Last updated on GMT

Pasco says 40% of the daily income of small shop owners comes from drinks affected by the Sweet Tax, putting them at risk of losing their livelihood. ©GettyImages
Pasco says 40% of the daily income of small shop owners comes from drinks affected by the Sweet Tax, putting them at risk of losing their livelihood. ©GettyImages
More than 300,000 people have signed a petition by the Philippines association of sundry shops and small eateries, Pasco, to oppose the government’s Sugar-Sweetened Beverages (SSB) bill.

Pasco says that 40% of the daily income of small shop owners comes from soft drinks and powdered drink products affected by the “Sweet Tax”. This puts the 1.3 million 'micro-retailers’ in the country at risk of losing their livelihood.

In an earlier open letter to President Rodrigo Duterte, Pasco stated: “We are saddened to think that most of us will be forced to close our stores because we will not be earning income from it to help our families.”

Part of the government’s Tax Reform for Acceleration and Inclusion (TRAIN) to revive the economy, the SSB bill proposes a tax of Php10 per litre on SSBs, which includes fast-moving goods such as powdered juices, energy drinks and soft drinks. The rate will be increased by 4% each year thereafter.

Finance Secretary Carlos Dominguez III had said TRAIN was necessary for the country to join the elite of the world’s fast-growing, high-income economies.

The tax was also said to be aimed at funding health initiatives related to the consumption of SSBs.

Pasco president Vicky Aguinaldo expressed the support of the association for the government’s policies, including in improving the lives of the poor, but added, “This bill is anti-poor. Please do not let our small micro-retailers, consumers, sugar and coffee farmers, and manufacturing plant workers carry the burden.”

Other organisations against the sugar tax

Likewise, the Beverage Industry Association of the Philippines (BIAP) wants the government to delay implementation to give more time for beverage industry players to work with the government on the tax reform. The BIAP recommended three alternatives, including a tax based on caloric sweetener content only, not total liquid volume.

Beverage and snacks giant Mondelēz Philippines, which makes powdered-juice Tang, had also suggested that the tax be based fairly, on sugar content.

Furthermore, the Export Development Council (EDC) under the Department of Trade and Industry warned: “The passage of this bill might hamper the growth of the beverage industry, local sugar farmers as well as fruit farmers, since it will experience a decline caused by lower demand of fruit juices and sugar.”

The EDC supported the BIAP view that the consumption of SSBs is behavioural and driven by the individual consumer’s choices, habits and attitudes. Moreover, SSBs are said not to pose a health concern when consumed “normally”.

The EDC proposed strategies such as public health awareness campaigns to reduce consumption, and called the tax on a single type of product “regressive and unfair”.

Pasco serves as the voice of micro-retailers in addressing issues that impact them and improving their livelihood. It has more than 6,000 members.

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