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JEREMIAS N. PAUL, JR.
Undersecretary, Department of Finance
Republic of the Philippines
Securing the Wins of the
Philippine Sin Tax Reform
OUTLINE OF PRESENTATION
I. Background
II. Wins of Sin Tax Reform
III.Expenditure Indicators
IV.Concluding Remarks
51.2
42.6
39.8 39.6 37.7
33.1 31.4
0.0
10.0
20.0
30.0
40.0
50.0
60.0
Lao PDR Vietnam Sri Lanka Indonesia Philippines India Pakistan
i
n
P
e
r
c
e
n
t
Public Health Expenditure, as % of Total Health Expenditure, 2012
LMIC Average- 38.3
PH BELOW LMIC AVERAGE
Source: World Development Indicators
REPUBLIC ACT NO. 10351
• An Act Restructuring the Excise Tax on Alcohol and Tobacco Products (RA 10351)
(Signed into Law - Dec. 19, 2012)
• Landmark Legislation under the Aquino Administration.
• Primarily a health measure with revenue implications.
• Fundamentally a good governance measure with positive impact on both public health and fiscal health.
RATIONALE FOR REFORM
Help finance Universal Health Care (UHC).
Address public health issues relating to alcohol and
tobacco consumption.
Simplify the current excise tax system on alcohol and
tobacco products and fix long standing, structural
weaknesses:
Remove price/brand classification freeze.
Level the playing field.
Reduce number of tiers.
Make tax system more buoyant by indexing tax rates
to inflation.
Section 8 (C): After deducting the allocations under Republic Act Nos.
7171 and 8240,
Eighty percent (80%) for:
National Health Insurance Program (NHIP)
Attainment of the Millennium Development Goals (MDGs)
Health awareness programs (HAP)
Twenty percent (20%):
Medical assistance (MAP)
Health enhancement facilities program (HEFP)
Incremental revenues earmarked for health
REPUBLIC ACT NO. 10351
WIN FOR FISCAL HEALTH
Share of tobacco and alcohol excise collections
to GDP in 2013 highest since 2000.
Increased funding for Department of Health – 2014 budget
up 57% over 2013 levels, from Php 53.3 billion ($ 1.26 B) to
Php 83.7 ($1.90 B) billion. Bulk of this will be used to
finance Philhealth premiums.
24.631.8
42.2
53.383.7
0
10
20
30
40
50
60
70
80
90
2010 2011 2012 2013 2014
DOH Budget (In B PhP)
WIN FOR PUBLIC HEALTH
$ 0.54 B $ 0.73 B
$ 1.26 B
$ 1.90 B
$ 1.0 B
NATIONAL GOVERNMENT HEALTH BUDGET
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
Total Budget PhilHealth MDG & Others Health FacilitiesEnhancement
Program
Medical AssistanceProgram and Health
EnhancementFacilities Program
In Billion Pesos
FY 2013 GAA (Baseline budget w/o Sin Tax) FY 2014 GAA
WIN FOR PUBLIC HEALTH
$1 ~ Php 44.3103
In Billion Pesos
National Government Allocation
for Health Insurance Premiums for the Poor
WIN FOR THE POOR
$ 0.3 B
$ 0.3 B
$ 0.8 B
Sustainable Financing for Health from Alcohol and
Tobacco Excise Tax
WIN FOR UHC
$ 0.82 B
$ 1.02 B
$ 1.15 B
$ 1.30 B
Indicator
Monitored
2013 Accomplishment
(Baseline)
2014 Target/
Accomplishment
(as of)
Budget Utilization as of
August 2014
Coverage rate of
the Poor (Quintile
1 & 2)
5.3 M Principal members and
15.9 Dependents (A total of
21.2 Members)
ACCOMPLISHMENT
14.7 M Principal
Members and 30.53 M
Dependents (A total of
45.23 M members)
100 %
2014 DOH BUDGET UTILIZATION
Universal Health Care: National Health Insurance Program
Source: DOH Sin Tax Law Incremental Revenue for Health Annual Report
Indicator
Monitored
2013
Accomplishment
(Baseline)
2014 Target/
Accomplishment
(as of)
Budget Utilization as of
August 2014
Prevalence of
smoking among
Filipino adults
aged 20 years old
and above
31 %
TARGET
25.4%
30 %
2014 DOH BUDGET UTILIZATION
Health Awareness: Health Promotion
Source: DOH Sin Tax Law Incremental Revenue for Health Annual Report
Indicator
Monitored
2013 Accomplishment
(Baseline)
2014 Target/
Accomplishment
(as of)
Budget Utilization as of
August 2014
Percentage of
fully immunized
child
2.683 M Children
(aged 1 year old)
(89%)
TARGET
-2.731 M Children (90%)
-Provide Pneumococcal
vaccination to 300 T
infants
-Provide Rotavirus
vaccination to 2.4 M
infants (72%)
72 %
2014 DOH BUDGET UTILIZATION
Attainment of Health-related MDGs: Expanded Program on Immunization
Source: DOH Sin Tax Law Incremental Revenue for Health Annual Report
Indicator Monitored 2013 Accomplishment
(Baseline)
2014 Target/
Accomplishment
(as of)
Budget Utilization as of
August 2014
Number of Doctors,
Registered Nurses,
Rural Health
Midwives,
Community Health
Teams (CHT)
Deployed
Doctors: 276
Nurses: 21,930
Midwives: 2,738
CHTs: 48,519 teams
(222,128 members)
ACCOMPLISHMENT
Doctors: 319
Nurses: 11,202
Midwives: 2,700
CHTs: 44,735 teams
(212,388 members)
52 %
2014 DOH BUDGET UTILIZATION
Access to Quality Health Services: Deployment of Human Resources for Health
Source: DOH Sin Tax Law Incremental Revenue for Health Annual Report
Indicator
Monitored
2013 Accomplishment
(Baseline)
2014 Target/
Accomplishment
(as of)
Budget Utilization as of
August 2014
Number of
patients served
-
ACCOMPLISHMENT
25,136 patients
51 %
2014 DOH BUDGET UTILIZATION
Medical Assistance Program
Source: DOH Sin Tax Law Incremental Revenue for Health Annual Report
• Hospital Operations
Utilization of funds allocated – 10 %
Special Hospitals, Medical Centers, strategically placed nationwide
and serve as end referral centers
• Infectious Diseases
Prevention program for HIV/STI, Prevention and treatment activities
for Dengue – 65% Fund Utilization
• Elimination of Diseases such as Malaria, Schistosomiasis, Leprosy and
Filariasis
Malaria morbidity – 2.0/100,000 Malaria mortality - .004/100,000
Prevalence of Schistosomiasis - <1%
Filariasis – 26 disease free provinces
84% fund utilization
2014 DOH BUDGET UTILIZATION
Source: DOH Sin Tax Law Incremental Revenue for Health Annual Report
Universal Health Care Medium-Term Expenditure Program
List of projects and programs for UHC
Guidelines for the identification and qualification of funding support and monitoring of fund utilization
With expenditure tracking system
Guidelines and standards for monitoring and evaluating the effectivity of Service Delivery Networks
Guidelines for the deployment of physicians graduating from residency training programs in government hospitals
Guidelines for the assessment and monitoring of clinical competencies to ensure that all skilled health professionals meet the standards for service delivery
Evidence-based Human Resources for Health Master Plan with guidelines for determining, attaining, and retaining the ideal number of skilled health professionals and other allied health professionals
Performance monitoring measures such as the Benefit Delivery Rate approach, among others to measure UHC implementation and improve access to and availment of health services
OPERATIONAL GUIDELINES ON UTILIZATION AS REQUIRED IN THE SIN TAX IMPLEMENTING RULES AND REGULATIONS
CONCLUDING REMARKS
Aim high for health.
Sintax reform has generated substantial resources for UHC in the Philippines.
Reforming tobacco and alcohol taxation is a sustainable financing source for UHC.
Need to spend wisely. Importance of comprehensive, holistic approach under a medium term expenditure framework.
No room for complacency. Continued vigilance necessary to ensure effective implementation of reforms.
CONCLUDING REMARKS
Understand the mindset of Finance Ministry officials.
Predictable revenues are important to them.
How to balance the financing demands from various sectors, i.e. education, health, infrastructure etc.
UHC can be a bottomless pit, thus the need for cost effectiveness and efficiency measures. Looks at value for money.
Generally against earmarking as preference is One Fund concept which allows flexibility.
THANK YOU!