[Ask the Tax Whiz] How do Filipinos profit from the next excise tax on sugary drinks?

The Philippines’ tax whiz tackles Home Invoice No. 5003 and the way Filipinos will profit from it

The 2-tiered particular tax on Sweetened Drinks (SBs) was launched by means of Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) Legislation, enacted in 2017 and applied in January 2018.

This coverage led to increased costs for sweetened drinks, with a tax of P6 per liter for drinks utilizing caloric and non-caloric sweeteners and P12 per liter for these containing excessive fructose corn syrup (HFCS). The tax was launched for 2 major causes: (1) to lift authorities income and (2) to discourage the consumption of sugary drinks linked to weight problems and better threat of non-communicable ailments (NCDs).

What’s Home Invoice No. 5003?

On September 30, 2025, Home Invoice No. 5003 was launched to strengthen the effectiveness of the present sugar-sweetened drinks tax coverage by updating the tax charges and increasing its protection. The invoice goals to additional cut back the consumption of sweetened drinks and handle the rising circumstances of NCDs, obese, weight problems, and undernutrition linked to dental caries, whereas additionally rising authorities income to fund pressing well being and diet applications.

Beneath Part 150-B, an excise tax enhance from P6 to P20 per liter of quantity capability shall be imposed, assessed, and picked up on sweetened drinks utilizing purely caloric sweeteners, purely non-caloric sweeteners, or a mixture of the 2. Sweetened drinks that use purely coconut sap sugar and purely steviol glycosides stay exempt from the tax. 

In the meantime, drinks utilizing purely excessive fructose corn syrup or any mixture of HFCS with caloric or non-caloric sweeteners shall be topic to the next tax price, elevated from P12 to P40 per liter of quantity capability. 

As well as, the brand new legislation will impose an excise tax of P6 per liter of quantity capability on all flavored milk, fermented milk, flavored non-dairy milk, and sweetened espresso merchandise.

Lastly, the newly created Part 150-C gives that the tax charges shall be routinely elevated by six p.c (6%) yearly, efficient January 1, 2026, if the invoice is enacted.

How does the federal government distribute the income from the excise tax on sweetened drinks?

Beneath the proposed modification, the allocation of revenues from the excise tax on sugar-sweetened drinks has been revised. 

The portion allotted to the Philippine Well being Insurance coverage Company (PhilHealth) for the implementation of the Common Well being Care Act of 2019 is lowered from 80% to 40%. Equally, the share allotted nationwide for medical help, the Well being Services Enhancement Program (HFEP), and different health-related wants managed by the Division of Well being (DOH) is decreased from 20% to 10%, with allocations distributed by political and district subdivisions. 

The remaining 50% of the whole income shall be allotted to the Division of the Inside and Native Authorities (DILG) for distribution to provinces to help native well being and diet applications. This 50% DILG share is additional divided into two (2) parts; the 40% shall be used for nutrition-specific applications concentrating on kids aged zero to 5 years, in addition to pregnant and lactating ladies. Whereas the remaining 10% shall fund nutrition-sensitive interventions, akin to water, sanitation, and hygiene (WASH) applications, as decided by the DILG. 

This revised allocation goals to stability help for common well being care with a stronger give attention to native diet and hygiene initiatives, making certain that the well being impacts of sugary drink consumption are addressed from each preventive and healing views. – Rappler.com