THE Philippines will continue to post strong sales of alcoholic beverages even with an increase in excise tax, the United States Department of Agriculture (USDA) said.
The USDA-Foreign Agricultural Service said in a report by its Global Agricultural Information Network (GAIN) that alcohol sales are expected to continue growing 5%-10% due to strong demand.
Alcoholic beverages were assessed higher excise taxes after the passage of Republic Act 11467, which adjusts the tax code to raise rates on such products.
The ad valorem tax on distilled spirits rose to 22% of net retail price, from 20% last year, with a specific tax of P42 per proof liter. The specific tax on distilled spirits will increase to P47.00 in 2021, P52.00 in 2022, P59.00 in 2023, P66.00 in 2024, and 6% every year thereafter, taking effect on Jan. 1 of each year.
Meanwhile, excise taxes on all types of wine have been set at P50.00 per liter, while the specific tax on other fermented liquor such as beer rose to P35.00 per liter, from P25.42 per liter in 2019.
The specific tax on beer and other fermented liquor is set to rise P2.00 every year until the total hits P43.00 in 2024, taking effect Jan. 1 of every year. The specific tax will increase by 6% from 2025 onwards.
According to the report, the Philippines is the largest market for US high-value food and beverage products in Southeast Asia.
The Philippines is viewed as a consumption “sweet spot” despite gross domestic product per capita levels of only $3,000.
The US is a top-three supplier and has a 9% market share in the Philippine market for alcoholic beverages.
RA 11467 was signed by President Rodrigo R. Duterte on Jan. 22, which increased the excise tax imposed on alcoholic beverages. It took effect at the start of the year. — Revin Mikhael D. Ochave