[This policy brief was featured in an ABS-CBN online news article (“Sugary drinks tax seen to boost obesity fight” on 8 August 2017.

The proposed tax on sugar-sweetened beverages (SSB) has triggered a policy debate. The proposal aims to reduce the consumption of these unhealthy beverages and to nudge individuals into consuming healthier ones. It is being successfully implemented in countries like Laos, Cambodia, Malaysia, Thailand, Mexico, France and the United States and is endorsed by the World Health Organization (WHO). Now that a similar law is being proposed in Congress, we need to assess whether the current proposal is the best response in addressing our nutrition problems.

What is our food and beverage consumption pattern?

According to the Food and Nutrition Research Institute (FNRI), while the Filipino household’s food consumption is decreasing over the years, the amount of caloric intake is increasing. The major contributors of household energy are cereals and cereal products (e.g. rice) and meat and meat products. The share of cereals and cereal products as a source of energy rose slightly from 67.5 % in 2003 to 68.1 % in 2015. The share of beverages as a caloric source, however, has increased from 1.6 % of total household calories in 2003 to 2.8 % in 2015.

The FNRI’s study on beverage consumption among Filipinos using the 2008 National Nutrition Survey noted a decline in the proportion of children consuming milk and the increase in softdrink consumption throughout the progression of childhood to adolescence. They also noted the positive association between softdrinks and the body-mass index (BMI) of these population groups especially among 6 to 12 years old children.

SSBs are a major source of added sugar in the Filipino diet. In the 2013 National Nutrition Survey, beverages excluding milk and milk products account for 6.1% of the total energy intake of children 6 months to 5 years, 3.9% for children 6-12 years old and adolescents, 5.5% for adults and 3.6% for pregnant women. Almost half of those caloric contributions come from softdrinks and sugar sweetened juice drinks. The 2013 survey also showed that 86.5% of Filipino adults consume sugar-sweetened bevarages. About 45% of the SSBs consumed by Filipino adults are softdrinks. About 29% are from coffee and tea and about 9% are from sugar sweetened fruit juices.

How healthy are we?

Based on the 2015 National Nutrition Survey, we have what we call a double burden of malnutrition. We have a prevalence of undernutrition among children and prevalence of obesity among adults.

Among children ages 0-5 years old, 21.5 % are underweight, 33.4% are stunted and 7.1 % are wasted. For children between 5-10 years old, underweight is 31.2%, stunting is 31.1% and wasting is 8.4%. For pre-adolescent and adolescent 10-19 years old, stunting is at 31.9% and wasting is at 31.1%.

While obesity among children is relatively low compared to undernutrition, we can see an increasing prevalence of obesity among children. Between 1989 and 2015, the prevalence of obesity increased from 1.1% to 3.9% among children less than 5 years old; from 5.8% to 8.4 % among children between 5 to 10 years of age; and from 4.9% to 9.2% for pre-adolescents and adolescents.

Among adults, obesity is the greater problem than being underweight or having chronic energy deficiency (CED). According to the Food and Nutrition Research Institute, 3 in every 10 Filipinos were overweight and obese while 1 in every 10 Filipinos suffers from CED.

What’s sugar got to do with it?

Based on the analysis of the FNRI, the 2013 National Nutrition Survey showed positive and significant relationship between total SSB intake and high waist circumference, elevated triglyceride, and high HDL-cholesterol among Filipinos. High intake of SSB is also strongly associated with being overweight or obese. The association with elevated blood sugar and blood pressure and high SSB consumption were weak. High waist circumference, elevated triglyceride, high HDL, overweight or obesity, elevated blood sugar and blood pressure are risk factors that are closely linked to developing non-communicable diseases. Insufficient physical activity is also closely related to non-communicable diseases. Around half of the Filipino adults are insufficiently physically active.

The scientific literature has consistently shown the relationship between consumption of SSBs and poorer health. Some confusion arose because the beverage industry-funded studies are four to eight times more likely to show a finding favorable to industry than independently-funded studies. The Harvard School of Public Health combed through the evidence and concluded that that sugary drinks increase the risk of obesity, diabetes, heart disease, and gout. Sugary drink portion sizes have risen dramatically over the past 40 years, and children and adults are drinking more soft drinks than ever. Scientific studies also show that high levels of sugar consumption shorten life span.

Why should we be concerned?

There are good economic reasons why consumption behavior has to be nudged towards healthier choices and sugar consumption regulated.

The Philippines Global Burden of Disease 2010 report showed that there has been an increase in premature mortality due to non-communicable diseases like ischematic heart disease, stroke, diabetes, chronic kidney disease, and hypertensive heart disease from 1990 to 2010. Banzon and Ho (2017) cited a study projecting that by 2040 Filipinos will continue to experience the burden of communicable and non-communicable diseases but with non-communicable diseases overtaking communicable diseases.
Poor health traps individuals into poverty. It reduces an individual’s productivity, burdens household with rising medical costs and caring for the sick which requires some members of the household to give up employment or schooling to provide such care. Unfortunately, these unhealthy foods are also very cheap and addicting, causing individuals to make poor choices in terms of nutrition.

Banzon and Ho also summarized the economic literature establishing the positive relationship between health and economic growth. There is positive link between improvement in health, population food consumption, increase in life expectancy and economic growth. Good health increases labor productivity which then leads to economic growth. It also provides an incentive to save because of longer life spans and prospects of retirement and greater investment per child. Longer life expectancy can also mean extended time in the workforce and increase workforce size.

We should also be concerned with the financial costs that lifestyle diseases will have on the public health care system particularly if we are moving towards universal health care coverage. The burden of these lifestyle diseases can be avoided with proper diet and nutrition. It becomes imperative that we push society towards a healthier diet.

Why tax sugar-sweetened beverages?

A can of softdrink can contain ten teaspoons of sugar. The American Heart Association recommends a daily maximum of six teaspoons of added sugar for adult women and children and nine teaspoons for men. The Philippine Heart Association recommends zero consumption of these SSBs. Using the 2009 Family Income and Expenditure Survey (FIES), we predict that a 10% increase in price will reduce the consumption of softdrinks by around 10%. The data showed that the proposed tax will have greater impact on low income individuals because they are more sensitive to the price change than higher income individuals. Higher income individuals will reduce their softdrink consumption by around 7% with a 10% increase in price.

A tax on SSBs can address nutrition problems.

A tax on SSBs will reduce its consumption and will reduce the incidence of obesity. The policy will be more effective if a portion of the tax revenue will be earmarked to improving access to clean water and public education on proper diet.

The majority of the tax revenue should also be allocated to fund a comprehensive food program targeting children and low income families to address the perennial problem of undernutrition. In that way, the new policy will be able to effectively address the double burden of malnutrition: undernutrition and obesity.