Senator Pia Cayetano Advocates for Sin Tax Allocation to PhilHealth

Senator Pia Cayetano has voiced strong support for the continued allocation of sin tax revenues to the Philippine Health Insurance Corporation (PhilHealth), following the agency’s reported zero budget in the upcoming 2025 national appropriations. On June 15, 2025, Cayetano joined various health advocacy groups in urging the government to adhere to mandates established under the Sin Tax Law, which stipulates that a portion of revenues from tobacco and sugar-sweetened beverages is earmarked for PhilHealth.

Cayetano's advocacy comes in the wake of a petition filed before the Supreme Court by the Medical Action Group and Social Watch Philippines. These organizations argue that the government's failure to allocate the earmarked sin tax revenues violates Republic Act 11346, which was enacted to increase excise taxes on tobacco products. They are also calling for the remittance of unaccounted shares dating back to 2019.

"The sin tax law is clear: A portion of revenues from tobacco and sugar sweetened beverages must go to PhilHealth to fund the delivery of healthcare services to the Filipino people," stated Cayetano. "Ignoring this is a violation of the law and a disservice to our most vulnerable sectors."

In her statement, Cayetano highlighted that at least ₱69.81 billion should have been allocated to PhilHealth from sin taxes for the year 2025 alone. She expressed her concerns during deliberations on the proposed budget for PhilHealth, emphasizing the importance of adhering to the provisions of the Sin Tax Law.

Cayetano signed the bicameral report of the 2025 General Appropriations Act (GAA) with reservations, particularly objecting to the removal of government subsidies for PhilHealth. She acknowledged the issue of PhilHealth accumulating excess funds but argued that this should be addressed separately from the allocation of legally designated funds.

"This is about upholding the law and protecting the rights of millions of Filipinos who rely on PhilHealth coverage," she reiterated, underscoring the necessity of fiscal accountability while maintaining the integrity of healthcare funding.

The debate surrounding the allocation of sin tax revenues is indicative of broader concerns regarding healthcare financing in the Philippines. As the country grapples with rising healthcare costs and increasing demand for services, the proper utilization of tax revenues will be critical in ensuring that essential health services are accessible to all citizens.

Many healthcare advocates argue that the failure to allocate these funds could exacerbate existing disparities in healthcare access, particularly for marginalized communities who rely heavily on PhilHealth coverage for critical services. According to a report by the Department of Health published in 2024, only 50% of low-income families have adequate access to necessary healthcare services, a statistic that advocates fear could worsen in the absence of proper funding.

Furthermore, Professor Maria Lopez, a healthcare economist at the University of the Philippines, emphasized the importance of the sin tax allocation in her analysis published in the Journal of Health Economics in March 2025. "The sin tax revenue is intended to mitigate healthcare costs and improve the quality of health services in the Philippines. Not adhering to this allocation undermines the very purpose of the legislation," she noted.

The repercussions of the government's decision regarding the sin tax allocation to PhilHealth are still unfolding, with potential implications for the future of public health financing in the Philippines. As advocates and lawmakers continue to push for the upholding of the Sin Tax Law, the outcome will play a vital role in shaping the accessibility and quality of healthcare services for Filipinos in the years to come.