CENTRO ESCOLAR UNIVERSITY

MANILA CAMPUS
9 Mendiola Street, San Miguel, Manila City
(02) 8735-6861 to 71 or (02) 8735-6860; (02) 8736-7175

A Research Paper

About the Student’s Hometown

Candon City:

My Roots, My Heritage

And My Home

In Partial Fulfillment

of the Requirements for

Science, Technology &

Society

Presented To

Ms. Maria Lourdes P. Sagun

Presented By

Gamueda, Brent Drix N.

 CENTRO ESCOLAR UNIVERSITY
MANILA CAMPUS
9 Mendiola Street, San Miguel, Manila City
(02) 8735-6861 to 71 or (02) 8735-6860; (02) 8736-7175

MISSION

“The City of Candon is committed to providing quality basic services to its people, particularly

the disadvantaged, through research-based modernization, efficient utilization of resources, and

sustained linkages with the stakeholders.”

VISION

“A sub-regional growth center, nurtured by competent and committed leaders; and sustained by

empowered and God-centered people living in a balanced environment.”

 CENTRO ESCOLAR UNIVERSITY
MANILA CAMPUS
9 Mendiola Street, San Miguel, Manila City
(02) 8735-6861 to 71 or (02) 8735-6860; (02) 8736-7175

INTRODUCTION

Candon is a seaside city in the province of Ilocos Sur, Philippines.

The city has a land area of 103.28 square kilometers or 39.88 square miles, accounting for 3.98%

of the total area of Ilocos Sur. According to the 2020 Census, its population was 61,432. This

accounted for 8.70% of the entire population of Ilocos Sur province, or 1.16% of the Ilocos

Region's total population. Based on these numbers, the population density is calculated to be 595

people per square kilometer or 1,540 people per square mile.

Candon City is located in the province of Ilocos Sur's lower central region. It is shaped like a

"C," with altitudes ranging from 10 to 500 feet above sea level. The municipality of Santa Lucia

in the south, Salcedo in the southeast, Galimuyod and San Emilio in the east, Santiago and

Banayoyo in the north, and the South China Sea in the west surround the city. The city's climate

is mainly dry, with the dry season lasting from October to May.
 CENTRO ESCOLAR UNIVERSITY
MANILA CAMPUS
9 Mendiola Street, San Miguel, Manila City
(02) 8735-6861 to 71 or (02) 8735-6860; (02) 8736-7175

ETYMOLOGY

There are several ideas concerning the city's etymology. One is that the city's name was taken

from the now-rare "candong" tree. Locals claim that during Spanish times, the prominent

chieftains of the area organized a tournament (called "gabbu," a wrestling contest) to pick the

spouse of Ineng, the daughter of the most powerful chieftain, Madal-ang, and his would-be

successor, due to his increasing age. The competition was conducted in the shade of the candong

trees at Madal-mansion. ang's The chieftain called Kalinio, an inhabitant of the Cauplasan

caverns, battled Madal-ang and another chieftain named Abay-a from the Cadanglaan caves. In

spectacular rituals, Kalinio and the chieftain's daughter were married in the shade of a candong

tree.

During the wedding, a party of Spaniards, including Captain Juan de Salcedo, stopped by and

inquired about the proceedings. Natives mistook their question for a request for the name of the

tree and uttered "Candong," pronounced Candong in Spanish.

 CENTRO ESCOLAR UNIVERSITY
MANILA CAMPUS
9 Mendiola Street, San Miguel, Manila City
(02) 8735-6861 to 71 or (02) 8735-6860; (02) 8736-7175

HISTORY

Malayan settlers were the original occupants of Candon City, which eventually became a hamlet,

according to city documents. Farmers, fishermen, woodsmen, and craftspeople were the most

common types of settlers. Three local chieftains dominated the village at the time: Abay-a,

Madalang, and Kalinio. Madalang chose the shade of a massive tree in the heart of the hamlet as

his dwelling, and people gathered there to exchange pleasantries and commodities. The elders

and the chief also handle conflicts and provide advice here. The huge tree was given the name

"Kandong" by the villagers.

When the Spanish invaders arrived in the 16th century, the iconic tree was chopped down on

instructions of the friars, and its lumber was used to build the area's first Catholic Church. People

were brought readily into the new church and converted to Catholicism. Candon was called by

the Spaniards after their rendition of the "Kandong" tree. The graveyard at the Catholic Church,

located south of Poblacion, was built in 1797. The settlement was incorporated as a municipality

in 1780. Under Spanish authority, the town was swiftly taken over by affluent Spaniards who

employed the indigenous in near-slavery circumstances. Famine struck in 1881 and 1882. Then,

on March 25, 1898, a revolutionary government was established, and the Spaniards were

attacked. However, Spanish forces were able to retake Candon two days later. Most of the

uprising's leaders and participants were arrested and then executed.

 CENTRO ESCOLAR UNIVERSITY
MANILA CAMPUS
9 Mendiola Street, San Miguel, Manila City
(02) 8735-6861 to 71 or (02) 8735-6860; (02) 8736-7175

Another revolution occurred during the Japanese occupation in 1942. Along the national

highway, several truckloads of Japanese soldiers and supplies were killed. However, Japanese

soldiers replied by burning down the whole town in January 1942, regarded as the most

significant incident in Candon's history. Despite the suffering that the people faced throughout

the World Wars, they remained committed to the process of redemption and reconstruction. And

the towering acacia trees that now grace the town plaza and municipal buildings bear witness to

the Candon's tenacity. Large trees have grown across the Poblacion's National Highway,

towering up to 15 meters high and 20 feet in circumference.

CITYHOOD

Candon City applied to become the second city in the Province of Ilocos Sur in order to carry out

government programs with additional funding from the national government to benefit the

people in the fields of social services, economic growth, peace and order, health, education,

agriculture, and infrastructure development in the Charter of Candon City.

Candon, like the "Kandong" tree of old, is only starting to spread its branches in its own effort to

become the next metropolis in Ilocos Sur. House Bill 7260, which sought to transform Candon

into a component city, was introduced by then-Congressman Eric D. Singson in the 10th
 CENTRO ESCOLAR UNIVERSITY
MANILA CAMPUS
9 Mendiola Street, San Miguel, Manila City
(02) 8735-6861 to 71 or (02) 8735-6860; (02) 8736-7175

Congress and then reintroduced by Congresswoman Grace D. Singson in the 11th Congress.

Because of Candon's strengths and credentials as the premier town in Southern Ilocos Sur, the

measure was readily approved by the Committees on Local Government in both the House of

Representatives and the Senate.

Candon's goal to become a city remained a pipe dream until recently, when the equivalent Senate

Bill No. 2242 was sponsored by none other than Senate President Aquilino "Nene" Pimentel Jr.,

Senators Frank Drilon, Sergio Osmea III, and all members of the Senate Committee on Local

Government. It was then unanimously approved by the Senate in a plenary session, and it is now

up to the townsfolk to accept this distinction with an equally unanimous "YES to Cityhood" vote.

ECONOMY

Candon City's geographical location and closeness to the national highway and neighboring

cities facilitated better mobility in commercial, economic, social, and cultural activities. The city

has been designated as the "Center for Trade and Commerce" in Ilocos Sur by the Department of

Trade and Industry.

 CENTRO ESCOLAR UNIVERSITY
MANILA CAMPUS
9 Mendiola Street, San Miguel, Manila City
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Candon is frequented by several neighboring towns for commercial activity, serving to the

requirements of an estimated 100,000 people. There is also a supermarket and shopping mall,

banking and lending institutions, recreational and tourism amenities, and health and medical

businesses in the city.

Candon City's existing industries include manufacturing, agro-industry, and cottage industry. The

Tobacco Stalk Cement Bonded Board Plant, which produces particle boards for low-cost housing

and other building needs, is owned by the manufacturing sector. Other manufacturing companies

include calamay production, chichacorn (deep-fried corn), bakeshop/bakery, ice cream, and

vinegar production; furniture production, concrete product production, and a Coconut Oil

Processing Plant in Barangay Talogtog.

Cottage industries, on the other hand, include balut egg manufacturing, fish re-drying, salt

manufacture, national delicacies, woodcraft, and handcraft.

Candon also has sari-sari and grocery stores, carinderias (small diners), nightclubs, barber shops,

beauty parlors, gasoline stations, stores/outlets for auto parts, agricultural equipment, and

supplies, school and office supplies, photo and supplies, appliances, pharmaceuticals, hardware,

and electrical. In addition, there are movie centers, bazaars, gift stores, pawnshops,

mineral/distilled drinking water retail outlets, and real estate.

 CENTRO ESCOLAR UNIVERSITY
MANILA CAMPUS
9 Mendiola Street, San Miguel, Manila City
(02) 8735-6861 to 71 or (02) 8735-6860; (02) 8736-7175

The city is the commercial and trade center of Ilocos Sur's second district. The national highway

and major thoroughfares in the city center have a linear structure of urban expansion.

TRANSPORTATION

Candon City may be reached through the McArthur National Highway, which also serves as the

city's major highway. Other prominent thoroughfares in the city are 25 de Marzo Street and San

Juan Street, both of which run parallel to the National Highway. Quirino Boulevard is a

secondary route that links the city main to Candon City's highland barangays and Ilocos Sur's

upland towns. The Darapidap Beach Road or the Samonte Boulevard, which has a Muslim

Mosque alongside it. This road links the beach barangays to the city core.

The city's primary modes of transportation are tricycles and jeepneys. The city has the most

registered tricycles in the province, with over 3000 registered tricycles (as an individual local

government unit.)

Buses travel great distances to major cities such as Manila, Baguio, and Laoag. Mini-buses

transport residents to adjacent towns as well as the nearby cities of Vigan and San Fernando, La

Union. Major bus companies have also developed terminals in the city.
 CENTRO ESCOLAR UNIVERSITY
MANILA CAMPUS
9 Mendiola Street, San Miguel, Manila City
(02) 8735-6861 to 71 or (02) 8735-6860; (02) 8736-7175

PRODUCTS AND SERVICES

Candon provides cultivated acacia, mahogany, and fruit tree plantations, as well as tobacco, rice,

corn, cotton, string beans, onions, and coconut. Candon also has fish nurseries and commercial

ponds where aquatic goods such as bangus, tilapia, milkfish, tilapia, paltat, tanguigue, tuna,

swordfish, and others may be found.

Candon City's existing industries include manufacturing, agro-industry, and cottage industry. The

Tobacco Stalk Cement Bonded Board Plant, which produces particle boards for low-cost housing

and other building needs, is owned by the manufacturing sector. Other manufacturing companies

in Barangay Talogtog include calamay making, chichacorn, bakeshop/bakery, ice cream, vinegar,

furniture making shop, concrete goods, and the Coconut Oil Processing Plant. The cottage

industry, on the other hand, includes "balut" or egg production, fish re-drying, salt manufacture,

national delicacies, woodcrafts, and handicrafts.

Candon also has sari-sari and grocery stores, carinderias, nightclubs, barber shops, beauty

parlors, fuel stations, stores/outlets for auto parts, agricultural equipment, and supplies, school

and office supplies, photo and supplies, appliances, medicines, hardware, and electrical. In

addition, there are movie centers, bazaars, gift stores, pawnshops, mineral/distilled drinking

water retail outlets, and real estate.

 CENTRO ESCOLAR UNIVERSITY
MANILA CAMPUS
9 Mendiola Street, San Miguel, Manila City
(02) 8735-6861 to 71 or (02) 8735-6860; (02) 8736-7175

TOBACCO

TOBACCO, the Ilocos region's principal cash crop, has an indisputable influence on the

agricultural, economic, and social lives of every Ilocano family, and has been a key factor in the

economic growth of Ilocos, particularly Region I, where flue-cured or Virginia tobacco is

farmed.

Tobacco, a key business in the region that outlasted the Spanish and American colonial periods,

represents the Ilocano in the same manner that pinakbet represents regional food, "Manang

Biday" for folk music, bucanegan and "Biag ni Lam-ang" for literature, and saluyot for leafy

vegetable.

Consider Virginia tobacco and the numerous Ilocano farming families who have derived a large

portion of their farming income and livelihood from the industry for many decades since the

1950s, which is why the golden leaf industry continues to thrive in the region despite ongoing

anti-tobacco lobbies and other efforts to reduce tobacco production and smoking.

The concentration of tobacco production in Ilocos began in the 1950s when an American tobacco

company discovered that the region's soil and climate were suitable for Virginia or flue-cured

tobacco. The Ilocanos were eager to embrace tobacco cultivation at the time since the
 CENTRO ESCOLAR UNIVERSITY
MANILA CAMPUS
9 Mendiola Street, San Miguel, Manila City
(02) 8735-6861 to 71 or (02) 8735-6860; (02) 8736-7175

crops were cultivated during the summer when much of their unirrigated land would be idle

following rice harvest.

Unlike in Central Luzon and other Mindanao regions, most farmers in the region possess smaller

land holdings that are largely unirrigated, providing them a relatively restricted yearly income

from farming. They were offered the option to earn more money from tobacco than they would

from their typical rice-corn growing rotation. Even though the farmers lacked production cash,

some intermediaries or leaf purchasers gladly gave them money to be paid back after the market

season.

Tobacco takes more attention and care than other crops, and it adheres to tight standards and

technology to create the quality leaves that the market demands. To produce high-priced quality

tobacco leaves, however, a tobacco producer must be patient, diligent, and hardworking, all of

which are Ilocano attributes.

Members of the Ilocano family collaborate on this labor-intensive yet profitable farming

endeavor. A large portion of tobacco cultivation, including post-harvest operations, takes place

during the summer, while youngsters are on vacation. During this season of production, every

member of the family, even school-age children, helps on the farm. The father and older children
 CENTRO ESCOLAR UNIVERSITY
MANILA CAMPUS
9 Mendiola Street, San Miguel, Manila City
(02) 8735-6861 to 71 or (02) 8735-6860; (02) 8736-7175

are in charge of production, from seed bedding through leaf collection, curing barn construction,

and loading tobacco leaves in sticks/strings into the barn. During the harvest and curing time,

everyone, including the children and a few helpful neighbors, helps with the sticking and,

subsequently, the sorting of leaves. Women generally accompany their husbands to the

commercial area to sell their produce.

Are the Ilocanos encouraging people to smoke cigarettes? Do all Ilocanos smoke as a means of

supporting their own product? Yes and no. The figure in Gloria Romero's legendary film

"Manang Biday," who wields a gigantic pinadis (rolled local tobacco), leans on theatrics rather

than realism and does not reflect Ilocano women in general. Not all Ilocanos smoke, and others

regard it as a lifestyle choice rather than a vice. To the Ilocanos, tobacco is just an agricultural

commodity from which they may earn a lot of money, especially during the summer. There may

be health risks associated with tobacco cultivation, however the government and private

contractors have addressed this by implementing Good Agricultural Practices in tobacco

agricultural areas.

Tobacco trading usually begins in February and continues until the last week of May, so farmers

have enough money to celebrate their patrons' fiestas, which are mostly held during this time
 CENTRO ESCOLAR UNIVERSITY
MANILA CAMPUS
9 Mendiola Street, San Miguel, Manila City
(02) 8735-6861 to 71 or (02) 8735-6860; (02) 8736-7175

period and they have enough money in time for school enrollment in June, as well as capital for

rice production the following season.

Tobacco growing has helped most Ilocanos establish a family and send their children to school,

according to Ilocanos born in the 1960s and 1980s in farming towns. The majority of these

youngsters have gone on to become professionals, such as teachers, attorneys, physicians, and

authors. The funds were also used to send family members abroad to work as contract

employees. Consider how these individuals who were successful in their jobs and work helped to

better the economic situation in their communities.

Although the number of farmers and hectares has decreased over time, farmers' revenue per

hectare of tobacco has remained high. However, unlike in the past, farmers are now provided

production aid to offset production costs, providing them with higher returns on investment. It

also helped because the NTA removed the cowboy system, or trading through middlemen, and

decreased loan interest rates, which led to lower production costs for tobacco producers.

Some farmers who reverted to tobacco production said that their other crops yielded relatively

little. Some who switched to corn cultivation returned to tobacco production only after a year or

two since maize has no market and does not get government help, unlike tobacco production.
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It also helped that local governments are eager to retain their support for tobacco products

because of the billions of dollars it generates. The Sin Tax Law provides tremendous money for

the national treasury in the form of excise taxes, P3.65 billion in 2017, which the government

utilizes for education, infrastructure, economic, health, and welfare projects throughout the

country. According to R.A., a portion of the excise tax revenue is allocated to recipient Virginia

tobacco-growing regions. 7171; and the provinces of Burley and Native Tobacco, in accordance

with R.A. 8240.

With the economic benefits benefiting families in the Ilocos area, several farmers do not see

themselves abandoning tobacco growing anytime soon. I have to explain to Ms Atienza that, in

the absence of a suitable replacement crop for tobacco, the sector continues to be the lifeline of

certain Ilocanos' families.

TOBACCO CORRUPTION

(Morella, 2019)In the parched, sun-drenched northern Philippines, where family fortunes and

political dynasties are formed on the golden leaf, tobacco both enriches and corrupts. The

nicotine-rich plant is like an addictive addiction that is tough to break for Eddie Habab and the

country's 65,000 other tobacco growers headquartered in the country's north. "It takes months of
 CENTRO ESCOLAR UNIVERSITY
MANILA CAMPUS
9 Mendiola Street, San Miguel, Manila City
(02) 8735-6861 to 71 or (02) 8735-6860; (02) 8736-7175

back-breaking manual labor, but nothing comes close to tobacco in terms of returns," said the

43-year-old farmer, who has paid for his two children's college education with crop revenues.

Habab sows tobacco in November, after the rice paddies have dried up, and collects the leaves

from February to May, during the region's lengthy dry season. They are cured in wood-fired

barns, which give them a golden-yellow color, and he makes at least three times as much as he

would if he had cultivated maize, peanuts, or other alternatives. Despite the national government

imposing increased tobacco taxes this year, the business is flourishing, with 84,000 tonnes of

tobacco projected to be farmed in the country's north this year. According to the National

Tobacco Administration, the industry's top regulator, this is nearly 13% higher than the previous

year. Tobacco supports the habit of over 17 million Filipino smokers, or around 20% of the

population, generating nearly $700 million in yearly tax income. According to the regulatory

organization, 15% of tobacco sales taxes are returned to the communities that cultivate them,

amounting to a $140 million windfall each year. According to local governor Luis Singson, over

70% of it currently travels to Ilocos Sur province, the country's biggest tobacco-growing area.

The money must be spent on improving farmers' livelihoods, according to a two-decade-old rule,

and Singson said the tobacco monies were a lifeline for the previously cash-strapped province.

"It has jolted our economy," he added. However, other detractors see the tax monies as a slush

fund for the politicians that dominate certain areas, a form of entrenched corruption that has been

a feature of Philippine politics for decades. The disposal of the levy payments,
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according to Father Sammy Rosimo, a Catholic parish priest in Ilocos Sur was inadequately

controlled and hence a magnet for financial skulduggery. "There are no checks and balances, so

the authorities in charge may spend the money on pretty much anything," Rosimo told AFP. In

the most notable case, Singson agreed to give then-President Joseph Estrada 130 million pesos

($3.1 million) in embezzled tobacco levy monies in 2000. The revelation, together with other

explosive proof of corrupt dealings, led to Estrada's impeachment in 2001 and eventual

conviction for plunder, or unjustly enriching himself, in 2007. Singson obtained immunity by

testifying during Estrada's trial. Singson told AFP in a lengthy interview that the fraud was a

one-time misappropriation of tobacco proceeds done as a mistaken favor for a friend. "I accepted

to be exploited by a corrupt president," he added while claiming that he was not corrupt and that

tobacco levy payments had always been used appropriately in his region. "There's no graft and

corruption... I'm not greedy," claimed Singson, who credits his great fortune to a successful

business empire spanning many industries such as building, transportation, and mining. A bloody

battle for control of the province's tobacco trade molded Ilocos Sur politics. According to

Singson, the Crisologo dynasty, whose patriarch was a congressman and matriarch was the

province governor, required that all tobacco harvested in Ilocos Sur in the 1960s be sold to a

processing corporation controlled by the family. However, Singson, their nephew, and protege

began to sell tobacco elsewhere, saying that his uncle had taken advantage of farmers. This
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infuriated the patriarch, Floro Crisologo, who tried to crush his new rival's challenge with a

squad of gunmen who, according to historical reports, murdered numerous allies of Singson.

Singson said he survived seven assassination attempts, two of which killed two bodyguards and

11 fans. "Everyday killings — you might hear shooting at any time of day or night," Singson

recalled. Politicians in the Philippines, both then and now, frequently use their own security

units, and both sides in the family feud were highly armed. In 1969, Singson ran bravely but

unsuccessfully for Crisologo's House of Representatives seat against his uncle, a supporter of

then-President Ferdinand Marcos. Singson's life was turned upside down in 1970 when the

Crisologo patriarch was slain inside a local church during an afternoon Catholic service. In

elections a year later, Singson beat the widow to become provincial governor. He has ruled

Ilocos Sur ever since, either as governor or congressman or with his cronies in those positions.

When asked who he thought was responsible for Crisologo's death, Singson said, "Well, it was

never solved since the entire province was rejoicing when he was assassinated." Singson, 71,

subsequently stated that his security troops were on the defensive during the tobacco wars and

that he did not order any killings. According to Father Danilo Laeda, a parish priest in

neighboring Ilocos Norte province, another leading tobacco-growing region, the golden leaf levy

was a double-edged sword. "It can go both ways. If the local executive is honest and has a clear

vision of his town, it can truly function well," he told AFP. "However, it may become a gigantic
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milking cow." Ilocos Norte is now administered by the widow and children of Ferdinand Marcos,

who died in exile in 1989 after being deposed in a three-year-long revolution.

APPENDIX A: THE INTERVIEW

(Antonio, 2022)Senior Deputy Majority Leader and Ilocos Norte Rep. Ferdinand Alexander

“Sandro” Marcos and PBA Party-list Rep. Margarita Ignacia “Migs” Nograles has proposed an

amendment to the Anti-Agricultural Smuggling Act of 2016 to classify cigarette smuggling as

“economic sabotage”, allowing for heftier penalties and fees. The amendment would also make

the illicit trade of tobacco product non-bailable.

House Bill (HB) No. 3917 will carry stiffer and heftier penalties for tobacco “both in its raw

form or as finished products” to be smuggled into the country.

This is because, under the original law that called agricultural smuggling a heinous crime, the

illegal trade only covers such products as rice, sugar, corn, pork, poultry, garlic, onion, carrots,

fish, and “cruciferous vegetables”.

“There is an urgent need to combat large-scale tobacco smuggling by imposing more stringent

penalties and deter the entry and sale of illegal tobacco in the Philippines,” the lawmakers said.

Under the proposed bill, cigarette smugglers would face a minimum of 30 years imprisonment

but not exceeding 40 years with no bail recommended.

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Violators would also be obliged to settle a fine double the value of the seized smuggled items,

plus the total amount of unpaid duties, and other taxes.

The present law only imposes imprisonment of 10 to 12 years for persons or firms caught in

possession of cigarette products that did not settle excise taxes.

The same law furthered that a person caught with smuggled cigarettes will be fined 10 times the

value of the payable excise taxes or not less than P1 million and a minimum of five years

imprisonment.

President Ferdinand “Bongbong” Marcos Jr. declared war against rampant smuggling during his

first State of the Nation Address (SONA) and ordered authorities to immediately curb the

operations within their jurisdiction.

In the bill’s explanatory note, Marcos and Nograles said that there is a “growing threat” of

cigarette smuggling since it deprives the government of billions of pesos annually in revenues.

Marcos is from Ilocos Norte which is noted for its tobacco farming, while Nograles hails from

Mindanao, which incidentally is where illicit tobacco trade is reportedly prevalent.

“If the entry and sale of smuggled cigarettes continue unrestricted, the national government

stands to lose even more revenues. This will be detrimental to its pandemic
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recovery efforts, clearly, this is one of the biggest tax leaks that government needs to plug,” they

said.

Marcos cited various government statistics, which showed that the government is losing from

P30 billion to P60 billion annually in revenues due to cigarette smuggling.

They highlighted how the excise taxes from tobacco allowed the government in the past two

years to allot P299 billion to address the Covid-19 pandemic.

The lawmakers lamented that in several parts of the country, notably in Zamboanga del Sur and

Misamis Occidental, 60 percent of the cigarettes sold in the market come from illegal sources.

Even in Marcos’s turf of the Ilocos Region, considered a tobacco-producing province, 10 percent

of the cigarettes being sold are illicit.

APPENDIX B: SIN TAX

(OPS, 2012)House Bill 5727, often known as the Sin Tax Bill, seeks to reform the present

alcohol and cigarette tariffs. Duties on these items are a possible income stream that might assist

support the administration's Universal Health Care Program. Similarly, greater taxes—and hence

higher
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costs—are considered as a disincentive to the consumption of "sin" items, the negative

consequences of which are carried mostly by the poorer parts of society.

According to the Department of Health (DOH), the Philippines has an estimated 17.3 million

tobacco consumers, making it the Southeast Asian country with the highest number of smokers.

Filipinos use an average of 1,073 cigarette sticks per year, whereas smokers in the region

consume fewer than a thousand sticks per year. This high consumption rate can be attributed to a

variety of factors, including our country's extremely low cigarette pricing. Smoking is

responsible for 71% of all lung cancer deaths worldwide. As a result, lung cancer is the most

common kind of cancer in the Philippines. According to DOH data, smoking kills 10 Filipinos

per hour.

According to the DOH, a 10% increase in tobacco taxation will result in a two million reduction

in smokers by 2016. A considerable reduction in the number of smokers will also result in a

reduction in smoking-related mortality.

Meanwhile, although having fewer severe health consequences than smoking, alcohol

consumption has imposed a variety of costs on individuals and society:

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REVENUE

The Department of Finance (DOF) has determined the following flaws in the current system of

taxing sin products:

● The current system is still under the Price Classification Freeze, wherein old brands are

taxed differently from new ones.

● The system follows a multi-tiered tax structure that is prone to the downshifting of

smokers to cheaper cigarette brands (which does not discourage smoking). For example,

based on 1994-2010 statistics provided by the Bureau of Internal Revenue (BIR), it was

observed that consumers had downshifted from medium-priced cigarettes (more than

30% consumption in 1994 to less than 20% in 2010) to low-priced cigarettes (less than

40% consumption in 1994 to more than 50% in 2010). This also applied to beers:

consumption of low-priced beer ballooned from less than 40% in 1994 to more than 70%

in 2010.

● The lack of price indexation results in declining tax burdens, as tax is eroded by inflation.

In effect, the 2004 effective burden tax price decreased in 2010 ranging from a 1 percent

to 9 percent decrease in tax burden (based on BIR 4th quarter survey).

● The taxation of distilled spirits is non-compliant with World Trade Organization (WTO)

rules.
 CENTRO ESCOLAR UNIVERSITY
MANILA CAMPUS
9 Mendiola Street, San Miguel, Manila City
(02) 8735-6861 to 71 or (02) 8735-6860; (02) 8736-7175

The sin tax proposes the following reforms:

● Maintain the specific form of excise taxation (e.g., per piece, per pack, per proof liter) to

discourage consumption, have more revenues that are predictable and easier to

administer, and devoid of incentives for manufacturers and importers with under-invoice

products;

● A shift from a multi-tiered tax structure to a single tax structure: (1) For cigarettes, a

two-rate structure of P14 and P30 per pack for the 1st two years, and a uniform rate of

P30 per pack of cigarettes in the third year. (2) For fermented liquor, immediate

implementation of a unified rate of P25/liter. (3) For distilled spirits, a two-year transition

period to a unified rate of P150 per proof liter in the third year.

● Adopt an automatic annual adjustment of tax rates using relevant NSO-established

tobacco and alcohol indexes after the third year.

● A shift from a raw-material criterion to an alcohol-content criterion in taxing distilled

spirits.

● Revenues from sin taxes are to augment the funds of the Aquino administration’s

universal health care program.

● The continued sharing with tobacco farmers of the incremental revenues.

 CENTRO ESCOLAR UNIVERSITY
MANILA CAMPUS
9 Mendiola Street, San Miguel, Manila City
(02) 8735-6861 to 71 or (02) 8735-6860; (02) 8736-7175

UNIVERSAL HEALTH CARE

The total cost of universal healthcare (UHC) from 2012 to 2016 will amount to P682.1 billion.

The national government’s financing requirement for the next five years amounts to a total of

P224.8 billion or a 33 percent share in the UHC cost. Additional revenues to be brought about by

the proposed sin tax reform are being viewed as one of the main sources for UHC national

government financing.

● P92.7 billion will account for the national government covering for a 100 percent subsidy

for the premium of 5.2 million or the bottom 20 percent of the poorest families.

● P55.3 billion will account for a 50 percent subsidy for the next 5.6 million of the poorest

families (the other half will be funded by the local government).

● P76.8 billion will account for investment subsidies in the health sector.

APPENDIX C: THE SOLUTION

Many research on corruption show that it is a widespread problem across the world. Finding a

solution to corruption in the Philippines will surely take time, and its implementation would need

both institutional and cultural reforms. On a micro level, however, being morally pure is one of

the most effective strategies to counteract the ever-growing corruption.

 CENTRO ESCOLAR UNIVERSITY
MANILA CAMPUS
9 Mendiola Street, San Miguel, Manila City
(02) 8735-6861 to 71 or (02) 8735-6860; (02) 8736-7175

Corruption thrives when someone has a monopoly on a product or service and has the authority

to select how much to get, as well as when accountability and openness are lacking.

Incompetence and corruption are also inextricably intertwined. To combat corruption, we must

diminish monopolistic power, restrict discretion, and promote responsibility in a variety of ways.

Reduced monopoly power equals more competition; in this context, we are delighted that the

Philippines has competition laws in place and the Philippine Competition Commission (PCC) to

enforce it. However, it would be ideal if the PCC could perform its job without intervention from

the courts in the goal of reducing monopolies/duopolies so that corruption may be effectively

addressed, decreased, and eventually abolished.

Limiting discretion entails making the rules of the game clear and accessible to everybody. This

involves posting government contracts and procurement plans online, as well as developing

online tutorials on what is necessary to acquire a permit, build a house, or start a business, among

other things. Making these sources open discourages corruption by making it easy to cross-check

these procedures and ensure that everything is in order.

Finally passing freedom of information (FOI) legislation in both Houses of Congress would be a

significant step forward. We've been talking about FOI for far too long. Indeed, it is possible that
corruption situations like Philhealth corruption may have been averted if the FOI law had

previously been adopted.

Another way to limit discretion is to simplify the tax code, making it easier to understand and

therefore lowering the discretion of BIR workers. This is how we can reduce private-sector

corruption and tax evasion. A better set of taxation regulations helps individuals understand what

they need to contribute and where their money could possibly go.

Increasing accountability may take various forms, and innovative leaders in government and the

business sector employ a wide range of approaches. Improving performance assessment is one

method to promote accountability. Another approach is to listen to and learn from businesses and

citizens. This involves methods for public complaints, but it extends beyond reporting individual

incidents of corruption in corrupt systems.

Resources:

https://www.officialgazette.gov.ph/sin-tax/

https://ph.news.yahoo.com/tobacco-enriches-corrupts-northern-philippines-074158190.html?guc

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https://businessmirror.com.ph/2022/07/26/solution-of-corruption-in-the-philippines/