Proposed beverage tax hike raises alarm for sari-sari stores

Insider Spotlight

• Steep price hike looms as the proposed 233 percent increase in sweetened beverage taxes threatens to squeeze household budgets already strained by inflation
• Small retailers are at risk as around 1.3 million sari-sari stores could face weaker beverage sales and tighter margins
• Industry urges delay amid warnings that beverage sales volumes could decline by another 27.2 percent by 2027
  
  
  
  

Filipino consumers and neighborhood retailers could face another financial squeeze as a proposed 233 percent increase in sweetened beverage taxes threatens to push prices higher amid mounting inflationary pressures.

The Beverage Industry Association of the Philippines (BIAP) is urging the government to suspend the proposed increase, warning that the timing could worsen financial pressures on households and sari-sari stores.

Under the proposed ProGRESS Bill, excise taxes on beverages using sugar or other sweeteners would jump from P6 to P20 per liter, while those containing high-fructose corn syrup would face an increase from P12 to P40.

The proposal seeks to raise government revenues and discourage excessive sugar consumption, but industry representatives warn of potentially significant economic consequences.

BIAP president Juan Lorenzo Tañada cited rising food and transportation costs linked to the Middle East crisis as reasons to reconsider the measure.

The bigger picture

The association pointed to slowing economic growth and accelerating inflation, with September inflation reportedly reaching 7.2 percent.

Around 1.3 million sari-sari stores could be exposed to declining beverage demand, while government projections suggest sales volumes could fall by another 27.2 percent by 2027.

The health debate

Philippine Institute for Development Studies senior research fellow John Paolo R. Rivera emphasized that obesity involves multiple factors beyond beverage consumption.

“Ang obesity kasi ay multidimensional. Hindi lamang ito, halimbawa, na naaapektuhan ng pagpapataw ng buwis; marami pang ibang salik o aspeto na puwedeng makaapekto sa obesity (Obesity is multidimensional. It is not influenced by taxation alone; many other factors can also affect obesity),” Rivera said.

What comes next

BIAP wants further studies and consultations before lawmakers advance the proposal, arguing that its economic and public health implications require closer scrutiny.

“We have to be very, very clear in what we want to achieve, on the health front and on the revenue front,” Tañada said.

The emerging policy debate puts affordability, government revenue and public health priorities on a potential collision course. —Ramon C. Nocon | Ed: Corrie S. Narisma