The biggest loser

Today, about 240 families lost a loved one to a tobacco-related illness. That’s an estimated 87,600 deaths in a year. In 2011, the Philippines earned around P26 billion worth of taxes from the tobacco industry, while revenue from cigarette manufacturers amounted to some P31 billion.

How much does life cost? For each life lost to tobacco use, the tobacco industry earned P353,881.28. Is it worth it?

This does not even account for the annual health costs and productivity losses from tobacco-related deaths and diseases that range from P148 billion to P314 billion. There is no monetary equivalent of the hours of painful treatment to manage the diseases, or the time and energy a family member spends to care for a loved one. And these numbers do not even reflect the pain of losing that loved one.

But for decision-makers, these exact figures and immeasurable realities are not sufficiently compelling to pass the necessary measures to reduce tobacco use. Instead, the most marginalized and poorest sectors are pitted against each other to rationalize inaction—tobacco victims versus farmers, or workers against children and youth.

Life vs livelihood

The battle of the sectors has been the easiest tactic used to muddle the discourse on amendments to excise taxation. What we fail to remember is that all of these sectors—farmers, urban poor, youth, children, and workers—are the tobacco victims. They are the ones selling their produce at a lower cost because of the monopoly, the ones earning below the minimum wage (or worse, hired contractually), and the primary consumers or smokers who eventually turn into patients after years of addiction. They are the same people continuously trapped in the vicious poverty cycle of having less education, lower income, poorer health, and greater out-of-pocket health spending.

The industry declares that it provides livelihood to an estimated 3 million Filipinos (3 percent of the total population), including their dependents, from farmers to factory workers to sari-sari store vendors and takatak boys. True, the industry provides jobs, but what kind of jobs, and at what expense?

A recent Xinhua wire report written by Prime Sarmiento details the earnings of Bernadette Guya, a 39-year-old tobacco farmer in La Union. Guya sold her produce for a one-hectare leased plot at P50,000 in the cropping season that ended in May 2011 and netted only P20,000, barely covering expenses for her children’s food and education.

Meanwhile, compensation for workers of the tobacco manufacturing sector has been declining over the past two decades. From 1991 to 2010, compensation per employee in real terms have declined by 41 percent, according to data of the Bureau of Labor and Employment Statistics. Contractualization schemes in the industry have also been on an upward trend.

The majority of the farmers and workers are low-income earners. As a result, most of them also belong to the poorest households, which have poor sanitation facilities and poor access to clean air and water and healthy food. These living conditions make the poor most vulnerable to illnesses and high out-of-pocket health expenditures, which, in turn, push them farther down the income pyramid.

A paper written by Valerie Ulep et al. and released by the Philippine Institute for Development Studies last January shows that the sectors supposedly benefiting from the tobacco industry are also the primary consumers of the product. According to the study, 40 percent of the poorest population are current smokers, as compared to 25 percent of the richest population. Inasmuch as the bulk of the population belongs to the poorest households, we can easily deduce that a significant part of the cigarette market is poor.

It’s simple logic: If you want the biggest profit, target the bulk of the market. In a country of almost 100 million where the majority are poor and the culture is tingi (per stick sales), small change put together produces the largest profit share. About 60 percent of tobacco sales are from tingi, and for industries such as tobacco and alcohol, there is no such thing as small change.

Poor Filipino families allot at least 2 percent of their resources to “sin” products (i.e., tobacco and alcohol). Even the government’s foremost poverty alleviation program, the Conditional Cash Transfer or Pantawid Pamilyang Pilipino Program (4Ps), is no exception, as reports show that sales of tobacco and alcohol increase during the release of subsidies.

The lure of nicotine is too hard to ignore, especially for those addicted to it. But for the poorest and most marginalized sectors, price is a deciding factor. Research shows that for the poor, children and youth sectors, increasing the per stick price of cigarettes to at least P5 will compel the majority, if not all, of them to kick the habit.

Accountability

At P2 per stick, cigarettes are cheap products with high costs. Excise taxation is the most effective intervention in controlling and curtailing negative behavior.

House Bill No. 5727, proposed by Cavite Rep. Joseph Abaya, introduces phases of preventive measures that gradually prevent the poorest and most marginalized sectors from using tobacco. This bill aims to gradually strengthen the tax structure, and yet with immediate results—decrease in consumption and increase in government revenue.

The proposal of the Abaya bill to use the earnings to benefit the affected sectors employed by the tobacco industry, and to fund universal health care—or health insurance for 5 million indigent families and enhancement of public health services and facilities—is a landmark legislative measure for accountability. It’s an eye for an eye. Make the tobacco industry pay for its negative impact.

The numbers stated here do not even reflect the deaths and illnesses resulting from alcohol use and drunk driving (road accidents are the fourth primary cause of death in the country). The compounded social and health costs of tobacco and alcohol use should be reason enough for the House of Representatives to pass the measure.

If reforms are made, the tone will be set that in the Philippines, the government is for and about the people. The longer it takes to pass the measure, the higher the losses for all sectors, for all Filipinos.

The Filipino people can win this time, if we compel our representatives to vote for health and our best interests. If we fail, we will be the biggest loser.

May-i L. Fabros is the coordinator of the Young Women Collective of WomanHealth Philippines. Jo-Ann J. Latuja is a fellow of Action for Economic Reforms.