One early evening, my mother came home with a slight complaint on the not so slight hike on the price of a one liter bottle of her favorite brand of cola. Nevertheless, she was carrying a bottle, ready to complete our family dinner. Yes, dear countrymen, it has finally come.
I remember when I was younger and candies would be worth tulo-piso (three for one peso); and of course it was affordable. I didn’t really notice when the price for the same sort of sweets became 50 centavos; and I didn’t mind. I bought anyway. Nowadays, when I need some soothing menthol inside my mouth, I’d have to shell out a full one peso; and I don’t mind. In the same way, I’d still get me my favorite brand of three piece pack of chocolate cookies with vanilla filling even if the 5 peso price climbs up to 8 or 10. I’d still prefer it to the cheaper yet bland tasting excuse for a kid’s snack. Maybe I’m making a faulty analogy.
Two years ago, “because of the Sin Tax Reform Act of 2012, an estimated four million Filipinos were discouraged from smoking cigarettes, a proponent of the law said, citing results of a study by Dr. Antonio Dans of the University of the Philippines College of Medicine who noted that the prevalence of smoking among adults went down to 23.3 percent in 2015 from 31 percent in 2008. “This means ‘there are more or less four million less smokers in the country today, because of the sin tax law,” Dans said.” (www.gmanetwork.com) “The sin tax law has proven to be effective in reducing tobacco consumption among the youth and the poor, according to a survey conducted by Social Weather Stations (SWS).” “The study showed that the prevalence of smoking for those belonging to socioeconomic Class E, or the very poor, dropped from 38 percent in December 2012 to 25 percent in March 2014. Across age groups, smoking prevalence among those belonging to the 18-to-24 age group was also reduced from 35 percent in December 2012 to 18 percent in March 2014.” (newsinfo.inquirer.net) According to then Finance Undersecretary Jeremias Paul, “cigarette volume removals from tobacco manufacturing plant throughout 2013 declined by 15.5 percent to 4.9 million packs from 5.8 million in 2012.” (news.abs-cbn.com)
Will the soda go through the same fate? Oh my… Why didn’t tell us they’re really aiming for a diabetes-free society.
By principle, “a true consumption tax is nearly impossible to increase to excessive or punitive levels. These taxes are naturally limited because they will ultimately discourage economic activity when they become too high . Excessive consumption taxes affect the economy by discouraging consumer spending, by decreasing business revenues and by lowering the amount of tax that can be collected when economic activity decreases.” (www.investorguide.com) In other words, higher taxes run the risk of killing the industry; or at least, that’s what the Economics textbooks say.
Throughout my childhood and adolescence, I was unaware and/or indifferent of taxes they placed on chips (if ever, there were any). I stood witness to its evolution from a less than a peso worth, more than a handful and a lot of mouthful state. Then, the packs became smaller – a bit disappointing, but still consumed in snack time. Now, some of them have shrunk further and their prices have blown up a bit fatter. The same revolution transpired with high end chips with glossy packs. But hey, they’re still in business. In fact, (without pointing specifics) the more expensive ones were the products that managed to survive. I would remember the snacks which I would see the pretty high school girls with rich parents, would munch on from the canteen to the classroom, are still around today; despite becoming more expensive. The new generation of chip munchers also bring with a juvenile view of price and product; unmindful of the product’s glorious past. So, it’s like the new smaller more expensive product gets a fresh new start with new clientele.
Even if authorities bring it to the point extreme point, consumerism will find its way to seep through some of the cracks. A former OFW once told me that liquor is illegal in Saudi. Well, what does the alcohol thirsty Filipino do? Well, this balikbayan friend of mine would tell me that they’d make their own. Filipino ingenuity and/or stubbornness know no bounds.
I’ll be watching what will become of the Filipino soda. Will the consumers shrink? Will the product shrink? Will the consumer’s buying power force its way up to the product’s same size? Or will the Filipino make its own at home?
“And the merchants of the earth weep and mourn over her, because no one buys their cargoes any more”