4 September 2025
HIGHER taxes on sweetened beverages and new levies on unhealthy ultra-processed products are being pushed by reform advocates to curb non-communicable diseases and raise more revenues to fund health and nutrition programs.
The nongovernment Action for Economic Reforms (AER) said the tax rate on sweetened beverages must be adjusted to recover its real value.
“Cumulative inflation since the tax on sweetened beverages was passed in 2018 has eroded the value of the sweetened beverage tax rate,” read the statement the AER issued last Thursday.
The Tax Reform for Acceleration and Inclusion (Train) law, enacted in 2018, imposed a tax on sweetened beverages. According to the group, the law had proven effective in reducing consumption and generating public revenues.
Under the law, an excise tax of P6 per liter was imposed on sugary drinks using purely caloric sweeteners. A P12 per liter excise tax on sugary drinks using high fructose corn syrup also took effect.
However, the AER argued that the tax is only a one-time increase and its efficiency in curbing consumption weakens over time due to sustained inflation.
“To remain effective, the policy needs to be automatically adjusted for inflation and cover other exemptions to sustain its effectiveness,” it said.
Apart from keeping up with inflation, AER said raising the sweetened beverage tax would help lower the risks of non-communicable diseases such as diabetes, hypertension and cardiovascular diseases.
It added that the measure could also lay the foundation for a more comprehensive health tax package—one that already includes tobacco, alcohol and eventually, unhealthy ultra-processed food products (UPPs).
“Just as the SB tax addresses the harms of sweetened beverages, implementing a nutrient-based tax on unhealthy packaged foods can reduce consumption of products high in sugar, salt, and fats—nutrients of concern that contribute to diabetes, hypertension, heart disease, and other non-communicable diseases,” AER said.
A 20-percent tax on unhealthy processed products could prevent 2,700 deaths, 21,700 cases of diabetes, 13,600 heart attacks and 5,000 strokes, according to a study cited by AER from Johns Hopkins University and the Department of Science and Technology-Food and Nutrition Research Institute.
At the same time, it could generate an estimated P648 billion over 20 years to bankroll nutrition and health programs.
The presentation of the Department of Finance at a hearing of the Committee on Ways and Means of the House of Representatives last Wednesday revealed that new expenditures far exceed new revenues.
“This tax isn’t just about raising funds—it’s about protecting the health of the population. By cutting down on unhealthy products, it helps people live healthier lives, reduces medical expenses, and supports universal health care programs, especially those that provide nutrition for children and care for mothers,” the AER said.