The revenue loss resulting from President Rodrigo Duterte’s sudden order to stop all betting formats of the Philippine Charity Sweepstakes Office (PCSO) would have a small impact on funding for the Universal Health Care (UHC) law which would start implementation next year, the Department of Finance (DOF) said on Monday (July 29).
Assistant Finance Secretary Joselito Lambino II, in a text message, said the UHC law needed P257 billion and the expected PCSO share was just P3 billion or less than 1.2 percent.
In five years, the UHC law would need at least P1.4 trillion of which the PCSO share would be P16.6 billion, “also less than 1.2 percent of total budget,” Lambino said.
Other sources of funding for the UHC law are so-called sin taxes and contributions from the Philippine Amusement and Gaming Corp (Pagcor).
Pagcor Chair Andrea Domingo said there was “no instruction yet [to] help PCSO beneficiaries.”
She said if Pagcor would be asked to fill the gap left by the absence of PCSO funds for UHC, the casino regulator would have to “come up with the appropriate system of taking over.”
Citing a legal opinion from Justice Secretary Menardo Guevarra, Finance Secretary Carlos G. Dominguez III said he does not “think that the President has any intention of transferring the PCSO’s entire mandate to the Pagcor.”
“He [President Duterte] only meant that the Pagcor may be tapped in the meantime to continue providing for health and medical care assistance, among others,” Dominguez said, quoting Guevarra.
For the DOF, the bigger chunk of funding for universal health care would come from higher taxes on alcoholic drinks, e-cigarettes and vapor products.
Lambino said taxes on e-cigarettes and alcoholic drinks could raise nearly P16 billion in the first year alone.
“Actually, we can aim for even higher,” he said.
The DOF wants to raise tax on alcohol products to P40 per liter.
Last week, President Duterte signed into law Republic Act (RA) No. 11346, under which the excise on cigarettes will billow from P35 a pack at present to P45 per pack in 2020; P50 a pack in 2021; P55 per pack in 2022; and P60 a pack in 2023.
Heated tobacco products or e-cigarettes will be levied excise of P10 a pack starting Jan. 1, 2020, to be followed by annual hikes of 5 percent starting 2021.
For vapes, individual cartridges, refills, pods or containers of their liquid solutions will be slapped tax of P10 per 10 mL, or a larger P50 on top of P10 per additional 10 mL for those being sold in volumes higher than 50 mL in 2020.
Tax on vapes will also increase by 5 percent yearly beginning 2021.
Dominguez had said the DOF wanted taxes on e-cigarettes and vapes to be much higher as the rates were “too low.”
“Target is to make it equivalent to cigarettes,” Dominguez had said.
The objective, Dominguez said, was to “fill the funding requirements for the universal health care program while curbing smoking, binge drinking and other vices, especially among the youth.”/TSB