Who is 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 country earned around P26 billion worth of taxes from the tobacco industry, while revenue from cigarette manufacturers amounted to approximately 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. No monetary equivalent can also be juxtaposed to the hours of painful treatment just to manage the diseases, nor the time and energy a family member spends to care for the loved one. More so, these numbers do not even reflect the pain of losing someone you love.

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

Life versus livelihood

The battle of the sectors has been the easiest tactic 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 minimum wage or, worse, hired contractually, and they are also the primary consumers-replacement smokers-turned-patients a few years after being addicted to smoking. They are the same people continuously getting trapped in the vicious poverty cycle of having less education, lower income, poorer health, and greater out-of-pocket health spending.

The industry attests that it provides livelihood to an estimated three 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. According to the article, 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 education and food.

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 the data of the Bureau of Labor and Employment Statistics (BLES). Contractualization schemes in the industry has also been on an upward trend.

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

A recent paper released by the Philippine Institute for Development Studies (PIDS) in January of this year, which was written by Valerie Ulep et al., 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 compared to 25 percent of the richest population. Inasmuch as the bulk of the population belong to the poorest households, we can easily deduce that a significant part of the cigarette market is poor.

Target the Poor, Earn from the Poor

Its simple logic, if you want the biggest profit, target the bulk of the market. In a country of almost 100 million where majority are poor and the culture is tingi (per stick sales), small change put together produce the largest profit share (approximately 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) (FIES). Even the the country’s foremost poverty alleviation program, the conditional cash transfer program, Pantawid Pamilyang Pilipino Program (4Ps) was no exeption, as reports show that sales of tobacco and alcohol increase during the release of subsidies.

The lure of nicotine is too hard to pass especially for those already addicted. 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 majority, if not all, of them to say no.

Holding sin products accountable

For 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 5727 proposed by Jun Abaya, introduces phases of preventive measures that gradually ease out and prevent the poorest and most marginalized sectors – children, youth, farmers, workers, and the poor 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 the universal health care – health insurance for five million indigent families and enhancement of public health services and facilities – is a landmark legislative measure for accountability. An eye for an eye. Make the tobacco industry pay for its negative impact.

These numbers do not even reflect the deaths and illnesses due to alcohol use. Deaths due to drunk driving – road accidents are the fourth primary cause of death in the country; add to that liver problems and violence.

Even without the WTO ruling, the compounded social and health costs of tobacco and alcohol use should be reason enough for the Lower House to pass the amendments.

If reforms are made, the tone is set that in the Philippines, the government is about the people. However, the longer it takes to pass the amendments, the higher the losses for all sectors, for all Filipinos.

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

Tobacco victims, please stand up. –http://www.pia.gov.ph/news/index.php?article=1831336385664

(May-i L. Fabros- Coordinator of the Young Women Collective of WomanHealth Philippines and Jo-Ann J. Latuja, fellow of Action for Economic Reforms)
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