A dichotomy of smokers in the Philippines following sin tax reform: Distinguishing potential quitters from those unlikely to quit.

The Philippine government significantly raised cigarette excise taxes in 2013, following passage of the landmark Sin Tax Reform Act of 2012. As a result, cigarette prices increased substantially. Given varying smokers' responses to the price increase, we examined underlying typologies of Filipino smokers and assessed how these typologies determine smoking intensity. We used cross-sectional data from the 2015 wave of the Philippine Global Adult Tobacco Survey (N = 1,651). To uncover typologies, random effects latent class modelling was used on six individual smoker responses (attempting to stop, thinking about quitting, decreasing sticks smoked, switching to cheaper brands, buying in bulk, and asking from others). Bivariate and multivariate analyses were employed to uncover determinants of typologies and smoking intensity. We found two typologies based on smokers' response. The first group, called "potential quitters" (62.62%), is composed of smokers who are more likely to consider quitting and decrease sticks smoked. The second group, called "unlikely to quit" (37.38%), have smokers who opt for price-minimization strategies like switching to cheaper brands, buying in bulk, or asking cigarettes from others. Potential quitters tend to be female, a student, and less nicotine dependent. They smoke up to three fewer sticks than those unlikely to quit, controlling for other factors. Nicotine dependence stood out as the most important predictor of being in the unlikely to quit group. The dominant role of nicotine dependence in determining a smoker's typology points to the need for non-price based measures, such as those targeted towards highly-nicotine dependent smokers, to complement tax-induced price increases and comprehensively address the smoking problem.

Cost-effectiveness analysis of the 2019 cigarette excise tax reform in the Philippines.

In this past decade alone, the Philippines has made major strides in increasing the price of cigarettes. This study estimated the cost-effectiveness of the most recent cigarette price increase of about 29% brought about by Republic Act (RA) 11346 in 2019. A static or a single cohort model was populated with locally-sourced inputs whenever possible. Public payer and societal perspectives were taken wherein the former only considered direct costs and tax revenue gained earmarked for the health sector while the latter adds indirect costs in the form of productivity losses. A 7% discount rate was applied. Increasing the price of cigarettes by about 29% was found to prevent about 1961 tobacco-related deaths which translate to about 34,571 disability adjusted life years (DALYs) saved. Savings incurred from hospitalizations prevented and additional excise tax revenues for health was about USD 367 Million. But when productivity losses averted due to the lives saved and the higher cost of hospitalizations were accounted for in the societal perspective, the excise tax reform yielded USD 415 Million net gain. It would save the public payer USD 10,612 per DALY averted while society at large stand to save USD 11,955 per DALY averted. Tax increases like RA 11346 yield significant revenue that can be used towards public health programs.

Price Elasticity of cigarette smoking demand in the Philippines after the 2012 Sin Tax Reform Act.

The Philippine tobacco excise tax reform law passed in 2012 drastically increased cigarette prices which were historically low. A pack of 20 cigarettes costing nine cents (US Dollar) or less was taxed five cents in 2011. When the reform took effect in 2013, each pack was taxed 24 cents which is almost five times the 2011 rate. Alongside the increase in tax is a decline in the prevalence of tobacco use from 28.3% in 2009 to 23.8% in 2015. Seven years since the reform took effect, policymakers are still debating whether the tax introduced was high enough to significantly reduce smoking prevalence. This study estimated the total price elasticity of cigarette demand using regression analyses on the pooled Philippine 2009 and 2015 Global Adult Tobacco Survey data with the excise tax as an instrumental variable. Information from both tax regimes provided the variation in cigarette prices that allowed for the estimation of the price elasticity of smoking participation and intensity. Age, sex, urban residence, educational attainment, employment status, wealth quintile, and media exposure were used as control variables. Results confirm that cigarette demand is inelastic, given that total cigarette price elasticity of demand ranges from -0.56 to -1.10 which means that for every 10% price increase, total cigarette demand declines by 5.6% to 11.0%. This study also provides total price elasticities for different subpopulations. Future studies can use these elasticity estimates to forecast smoking prevalence and provide policy recommendations.