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THE ECONOMIC IMPACT OF EXCISE TAX ON

SUGAR-SWEETENED BEVERAGES
IN METRO MANILA

An Undergraduate Thesis
Presented to the Faculty of the
College of Business and Entrepreneurial Technology
RIZAL TECHNOLOGICAL UNIVERSITY
Mandaluyong City

In Partial Fulfillment of the Requirements for the Degree

Bachelor of Science in Accountancy

By:

Jane Cris D. Abagon

Maricar R. Pineda

June 2021
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APPROVAL SHEET

This thesis entitled “THE ECONOMIC IMPACT OF THE ADDED EXCISE

TAX ON SUGAR-SWEETENED BEVERAGES IN METRO MANILA”, prepared

and submitted by Jane Cris D. Abagon and Maricar R. Pineda in partial fulfillment

of the requirements for the degree, Bachelor of Science in Accountancy, has

been examined and is hereby recommended for oral examination.

_________________ DR. JESSIE F. SERGOTE

Date Adviser

PANEL OF EXAMINERS

Approved by the Oral Examination Committee with a grade of ______.

Dr. Corazon Austria

Chairperson

Mr. Rowell Marasigan Dr. Rubi Ana Saludario

Member Member

Accepted in partial fulfillment of the requirements for the degree, Bachelor of

Science in Accountancy.

DR. LEONILA C. CRISOSTOMO

Dean, College of Business
and Entrepreneurial Technology
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ACKNOWLEDGEMENT

The researchers would like to acknowledge the immeasurable help and

express deep gratitude to the following people who offered their warm hands

helping the researchers for the completion of this study:

First and foremost, Dr. Jephte O. Muñez, research adviser of

RESEARCH1, who guided the researchers from Chapter 1 to Chapter 3; and Dr.

Jessie F. Sergote, research adviser of RESEARCH2, who patiently checked and

helped with the revision of work of the researchers, for their advice, endless

support, sharing their skills and knowledge for the improvement of the study.

To the researchers’ parents, for the moral support given to the

researchers while conducting the study, for the words of encouragement, for the

understanding and care given all throughout the making of this study, and for

helping in financing and providing the needs of the researchers.

To the researchers’ friends and loved ones, for the valuable prayers

and support given to the researchers while conducting the study, for the

unceasing encouragement, for the constructive discussions and perseverance

during this research phase.

Most significantly, to our Great God Almighty, who gave the strength,

wisdom, guidance, and grit that made the researchers continue the research

study and accomplish it.

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ABSTRACT

Sugar-sweetened beverages have always been associated with chronic

diseases such as diabetes, obesity, and heart diseases. The Philippine

government implemented an excise tax on sugary drinks linked to the TRAIN

Law. The purpose of this study is to give a piece of valuable information and

knowledge about the tax within a particular area of concern in Metro Manila. This

quantitative research made use of a descriptive method, particularly a descriptive

survey approach. It aims to know the extent to which different conditions can be

obtained among the variables. The respondents of this study were the students

and employed people who are consuming sugary drinks aged 18 to 25 years old

in Metro Manila. The researchers used a random sampling method in choosing

the respondents. This study evaluated the respondents’ assessment of their

consumption of sugary drinks based on five factors, namely: personal preference,

price, level of risks, government policy, and business perception. Based on the

findings, the respondents frequently considered the level of risks upon buying

and consuming sugar-sweetened beverages. It is also observed that the

respondents’ personal preference was prevailing with respect to the price

increase. The researchers recommended that the government should enhance

the existing sugar tax and make it precise and accurate with regard to the

contained sugar.
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Table of Contents

Title Page.............................................................................................................i

Approval Sheet....................................................................................................ii

Acknowledgement...............................................................................................iii

Abstract...............................................................................................................iv

Table of Contents................................................................................................v

List of Tables......................................................................................................vii

List of Figures....................................................................................................viii

Chapter I. The Problem and its Background

Introduction………………………………...…………………….…...…..……9

Conceptual Framework…………………………......…………….....………14

Statement of the Problem………...……………………..….…............……15

Hypothesis of the Study………...………………………...……….....…..…16

Scope and Limitations………...…………………………………..…...……16

Significance of the Study………...…………………...…................………17

Definition of Terms………...……………………..…...……….............……19

Chapter II. Review of Related Literatures

Personal Preference.………...………………………...……..….........……21

Price.................……...……………….……………………..................……23

Level of Risks.....………………………..…...….……………..…...….….…25

Government Policy……...……..………...…..……….………..…...……….28
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Business Perception...............................................................................31

Synthesis of the Reviewed Literature and Studies……..…….….……....33

Chapter III. Research Methodology

Research Method Used.……..…………..………………….......……........35

Population, Sample Size and Sampling Technique…......…....……....…36

Description of Respondents.....………..……………........…….....….……36

Research Instrument………………………………....………..…..…...…...36

Validation of the Instrument....................................................................38

Data Gathering Procedure....…………………........…………...…........…38

Statistical Treatment of Data....……………………......….....…….....……39

Chapter IV. Presentation, Analysis and Interpretation of Data

Presentation of Data...............................................................................41

Interpretation and Analysis of Data.........................................................41

Chapter V. Summary of Findings, Conclusions and Recommendations

Summary of Findings....……………………........……………...............…59

Conclusions…………………....…………………....……….........…...……62

Recommendations…………………....……………....…………..…....…...63

References..…………………....……………………………..……..........….……65

Appendices

Survey Questionnaire……………….............…....…………...….….…….70

Letter for Validation……………………………………………..…..........…75

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Certification of Statistical Treatment.......................................................78

Certification of Editing.............................................................................79

Curriculum Vitae……………….…....………………………….......….……80

List of Tables

Table 1 Frequency and Percentage Distribution of Respondents by

Sex….…....…………………….…....…….......……………….…....……….………41

Table 2 Frequency and Percentage Distribution of Respondents by Family

Size.…....…………………….…....……………………......……………..…………42

Table 3 Frequency and Percentage Distribution of Respondents by City of

Residence.…....…………………….…....…………………….........….......………44

Table 4 Frequency and Percentage Distribution of Respondents by Marital

Status....…………………….…....……………………......…...………........………45

Table 5 Frequency and Percentage Distribution of Respondents by Educational

Attainment....………………………….…....……………..…..........................……46

Table 6 Frequency and Percentage Distribution of Respondents by Average

Monthly Income....…………………….…....…………..............…….........………47

Table 7 Respondents’ Assessment on their Consumption of Sugary Drinks in

terms of Personal Preference....…………………….…....……..........…...………49

Table 8 Respondents’ Assessment on their Consumption of Sugary Drinks in

terms of the Price....…………………….…....………………….…................……51

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Table 9 Respondents’ Assessment on their Consumption of Sugary Drinks in

terms of the Level of Risks………………...........….….…....…………….……….52

Table 10 Respondents’ Assessment on Excise Tax of Sugary Drinks in terms of

the Government Policy……………................……............…...............…………54

Table 11 Respondents’ Assessment on Excise Tax of Sugary Drinks in terms of

Business Perception………………….……..........................................…………55

Table 12 Consolidated Factors of Sugar-sweetened Beverages

Consumption………………….…....……………………….......……..…………….56

Table 13 Test of Significant Relationship…………...…............….…......………57

List of Figures

Figure 1 Conceptual Framework…………………..…….......…....………………14

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CHAPTER I

THE PROBLEM AND ITS BACKGROUND

Introduction

Sugar-sweetened beverages are all liquids that are sweetened with

various types of added sugars, such as brown sugar, corn sweetener, maize

syrup, dextrose, fructose, glucose, high fructose maize syrup, honey, lactose,

malt syrup, maltose, molasses, raw sugar, sucrose, and everything with the same

metabolic impact. These comprise non-diet soft drinks or sodas, energy drinks,

flavored juice drinks, powdered sweetened tea, and coffee drinks. It has often

been considered that fats and carbohydrates are bad for consumer’s health. But

the reality is that sugar, or, to be exact, added sugar, is much worse, and people

don't know how much sugar is in their favorite drinks. The negative results still

prevail, despite the fact that it is beneficial for brain health. Sugar itself is not

harmful; however, it is better to handle a natural sugar source for health than to

consume added sugars. Chronic diseases such as diabetes, heart disease, and

obesity may be caused by too much sugar. Out of ten adult Filipinos in the

Philippines, three (3) of them are overweight and obese. Based on the data

provided by the Food and Nutrition Research Institute of the Department of

Science and Technology (FNRIDOST), presenting the result of the National

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Nutrition Survey in 2018, obesity raised from 20.2-percent in 1998 to 37.2-percent

in 2018, which proves its prevalence.

With all the data and studies about the harm that people can get to added

sugars, the government thought of a solution, and that is taxing sugar-sweetened

beverages. In the House of Representatives, a plan for taxing sugar-sweetened

drinks was introduced and integrated into a comprehensive Tax Reform for

Acceleration and Inclusion (TRAIN) law. A strategy that would optimize benefits

for both public health and government revenue was recommended by the health

department and the financial department. This tax against sugar-sweetened

beverages was framed as a preventive health initiative that discussed food

industry characteristics that are associated with higher rates of obesity and

diabetes. This is the government's way to help Filipinos to limit their consumption

of sugary drinks. Regulating sugar serves to be an effective tool for controlling

consumption, and importantly this sweet tax does not appear to function as a

regressive imposition on the families belonging to low socio-economic status.

The researchers conducted a study with regards to the effectiveness of

the sweet tax from increasing government revenue to promoting public health.

According to Representative Joey Salceda, tax revenues were ‘essential’ to

lessen the impact the TRAIN law would bring to the sugar sector. Consumption

of sugar-sweetened beverages, particularly carbonated soft drinks, can be a

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crucial contributor to the epidemic of overweight and obesity. A large number of

consumers have been drinking sugary drinks to quench their thirst and to discern

the sweetness a soda gives. But Wenk (2019), director of neuroscience

undergraduate programs at the Ohio State University, explains that the rush of

sweetness also appears to activate the same reward centers in the brain as

drugs. It triggers the release of the brain’s chemical dopamine in a region known

as the nucleus accumbens, and as a result, people feel euphoria. For instance,

a 12-ounce can of Coca-Cola has 39 grams of sugar; and that is equivalent to

about ten teaspoons, and more than we should consume in an entire day.

According to the World Health Organization, the Philippines is one of the

twenty-seven countries that has introduced a sweet tax, joining others such as

Chile, France, Mexico, Spain, and six municipalities in the United States of

America. As the sugar-sweetened beverage tax is a health-related tax, the health

department, and finance department have made a collaboration upon

recommending a tax policy that would give benefits to both public health and

government funds. In particular, the policy focused on modifying health risks by

introducing taxes that will increase the price of sugar-sweetened beverages

sufficiently to put off purchases, and that could be applied to a variety of products,

which leads to the discouragement of unhealthy substitution.

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On January 1, 2018, the Philippine government implemented an excise

tax on sugary drinks. According to Republic Act 10963 Section 47 under Tax

Reform for Acceleration and Inclusion (TRAIN) law, the tax rate is equivalent to

6 Philippine pesos per liter for beverages using purely caloric sweeteners and an

increment on the price of 12 pesos per liter for those manufacturers who use

high-fructose corn syrup (HFCS). An influx of high-fructose corn syrup to the

country has affected the local sugar industry, which expressed concern that the

food manufacturers would shift to artificial sweeteners if artificially sweetened

beverages would be exempted from excise tax.

The cause-oriented group Tindig Pilipinas believed that the Tax Reform

for Acceleration and Inclusion (TRAIN) law is a burden on the poor citizens as

their earnings are insufficient with the price increase of basic commodities.

Moreover, some government officials have sought a congressional review of the

TRAIN law. Magdalo Partylist Representative Gary Alejano quoted that it has

caused nothing but hardships for the Filipinos in unreasonable price increases of

commodities. Committee member Sen. Juan Miguel Zubiri said that the sugar tax

is too burdensome for the poor and the primary consumers.

According to Nielsen Retail Data, the average price of taxable sweetened

beverages in sari-sari stores and neighborhood convenience stores had

increased by 20.6-percent and average prices in supermarkets had increased by

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16.6-percent. Sugar-sweetened drinks cannot be compromised, for consumers,

as these drinks have been part of their habitual behavior. Some drinks serve

functional needs such as boosting energy and other products are precepted as a

reward or personal treat for their selves. These views suggest the significance of

emphasizing the emotional connection and the functional benefits of these

sugary beverages in the consumers’ lives.

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Conceptual Framework

INPUT
Demographic Profile of
the Respondents

• Sex
• Family Size
• Marital Status
• City of Residence
• Educational
Attainment
• Average Monthly
Income

PROCESS
Assessment of Consumers' Consumption in terms of:

• Personal Preference
FEEDBACK • Price
• Level of Risks

Assessment of consumers on excise tax in terms of:

• Government Policy
• Business Perception

OUTPUT
Profile of the respondents
determined

Economic Impact of Excise Tax on

Sugar-sweetened Beverages in
Metro Manila

Figure 1. Conceptual Framework

The research paradigm describes the processes needed in gathering

data. The input infers the flow of data into the processes. The processing step
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includes all tasks required to effect a transformation of the inputs. In contrast, the

outputs are the data and materials flowing out of the transformation process.

These are essential to identify the desired outcome of the study.

Statement of the Problem

This study aimed to identify the economic impact of taxing sugar-

sweetened beverages in Metro Manila.

Specifically, it sought answers to the following questions:

1. What is the profile of the respondent in terms of:

1.1 Sex;

1.2 Family Size;

1.3 City of Residence;

1.4 Marital Status;

1.5 Educational Attainment;

1.6 Monthly income?

2. How do the respondents assess their consumption of sugar-sweetened

beverages in terms of the following factors:

2.1 Personal Preference;

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2.2 Price;

2.3 Level of Risks?

3. How do the respondents evaluate the added excise tax on sugar-sweetened

beverages in terms of the following factors:

3.1 Government Policy;

3.2 Business Perception?

4. Is there a significant relationship between the respondents’ assessment of the

added excise tax on sugar-sweetened beverages when grouped based on their

monthly income?

Hypothesis of the Study

There is no significant relationship between the respondents’ assessment

of the added excise tax on the sugar-sweetened beverages when they are

grouped based on their monthly income.

Scope and Limitations

This study aimed to identify the economic impact of the added excise tax

on sugar-sweetened beverages in Metro Manila. Since different perspectives

would be expressed by the participants based on their opinions, the survey form
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was given to respondents of varying age, sex, city of residence, marital status,

educational attainment, and average monthly income. Due to the restrictions set

by the government during this time of the pandemic, the researchers utilized the

technology and administered an online survey by the use of Google Forms.

The researchers encountered some difficulties, complexities, and

technicalities while doing the study. The researchers also faced a lack of time

with managing day-to-day activities in school, especially when distributing the

survey forms online.

Significance of the Study

This study served as a significant source in explaining the impact of taxing

sugar-sweetened beverages to the economy, involving the individuals, entities,

institutions, organizations, and other segments of society.

The Society and the community. Under the present tax system, the

excise tax forms part of the tax base when computing the value-added tax (VAT).

The excise tax will also increase the tax base for the value-added tax (VAT).

Therefore, the value-added tax (VAT), being an indirect tax, is generally passed

on to the consumers. This would be shifted and become part of the price of sugar-

sweetened beverages. The higher the selling price, the fewer individuals would

likely to consume. The majority of the sari-sari stores in a community have

experienced a decline on sales because of changes in consumers’ purchasing.

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The Government. The incremental revenues collected from sugar-

sweetened beverages will be allocated to the sugar industry under the joint

memorandum circular between the assigned government sectors. According to

Representative Joey Salceda, farmers are one of the biggest contributors to the

Tax Reform for Acceleration and Inclusion (TRAIN) Law; therefore, they should

be one of the main beneficiaries that need to be funded by the government since

it was stated in the law that a proportion of the revenue earned should be passed

to the sugar industry.

Organizations. By highlighting the amount of sugar in sweetened

beverages such as soft drinks, energy drinks, and sports drinks, different

organizations can help in establishing awareness of the overconsumption of the

consumers. Since there are health risk factors involved, it is relevant to observe

the intake of sugar-sweetened beverages.

The Academe. This research would be helpful in the academic

environment in order to know how do added taxes affect the increment in price

of the products and how these affect the consumers’ behavior. Being

knowledgeable about tax is essential because every citizen is, and will be, a

taxpayer. Even some children, at a very young age, are informed of what taxes

are so that they will be aware in the future of how do product prices flow.
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Other Researchers. Even in different fields of expertise, other

researchers shall be informed about how taxes work for an economy since they

are also individuals who buy commodities. Therefore, this research study will be

relevant for it reflects on products and services as expected from the amount of

taxes contributed.

Definition of Terms

For clarity and thorough understanding of this study, the following terms

or phrases are defined operationally:

Excise Tax refers to the tax proposed to reduce the consumption of drinks with

added sugar that cause adverse health effects.

Low-income consumers refer to individuals whose income results in them being

unable to obtain the goods and services needed for a socially acceptable

standard of living.

Middle-income consumers are the individuals whose income is enough to

obtain goods and services, and having a savings for their other purchases.

Obesity is the excessive fat accumulation from sugary drinks that presents a

health risk, according to the World Health Organization.

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Sari-sari store refers to a convenience store that has a variety of products,

including soft drinks, energy drinks, and other sugary drinks.

Sugar-sweetened beverages refer to non-alcoholic beverages of any

constitution that are prepacked and sealed, in accordance with the Food and

Drug Administration (FDA) Standard, that contain sugar added by the

manufacturers.

Tax Reform for Acceleration and Inclusion (TRAIN) Law refers to Republic

Act No. 10963, is the initial package of the Comprehensive Tax Reform Program

(CTRP) signed into law by President Rodrigo Duterte on December 19, 2017.
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CHAPTER II

REVIEW OF RELATED LITERATURE AND STUDIES

Numerous scholarly articles were used as a reference to assist the

researchers in conceptualizing the study from the foreign literatures and studies,

and the local literatures and studies which were reviewed by the researchers and

gave a synthesis of the reviewed literature and studies.

Personal Preference

A person who consumes one sugary beverage per day can easily exceed

the World Health Organization’s guideline to limit free-sugars to less than 10-

percent of the total daily energy intake. They stated that it will be at elevated risk

of a range of effects on a person’s health including tooth decay, obesity, and

diabetes. From the perspective of public health, the tax on sugar-sweetened

beverages is globally recommended as a way to prevent and control obesity and

diet related non-communicable diseases. The scientific evidence of the harmful

effects that consuming sugar-sweetened beverages has on health has

accumulated over time and become increasingly convincing. A recent systematic

review and meta-analysis was examined by Vartanian (2006), the relationship

between consumption of these beverages and diverse nutritional and health

measures. Concerns about the health costs associated to consumption of sugar-

sweetened beverages have led to an increased number of studies proposing

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economic measures–essentially taxes–to cut sugar-sweetened beverages

consumption. While these measures are not the only ones proposed there is

growing evidence of their potential effectiveness, as it is shown that sugar-

sweetened beverage consumption is relatively sensitive to price movements.

Their ultimate impact on health would depend, however, on the baseline tax level,

obesity prevalence and sugar-sweetened beverages consumption (Escobar,

2013).

According to the study of Indian J Community Med (2020), respondents

with higher education were significantly more likely to consume aerated or

carbonated drinks as compared to illiterates. Unmarried persons were more likely

to consume aerated drinks than married while widowed/divorced/separated were

less likely to take aerated drinks than. People belonging to higher socioeconomic

status were three times more likely to consume aerated drinks than lower class.

Limiting such factors can prove to be beneficial in reducing their consumption

and further help in reducing the burden of non-chronic diseases. Future studies

should look at behavior change interventions aimed at reducing the consumption

of sugary drinks by influencing the socio-ecological environment of an individual.

According to Nakhooda and Wiles (2017), students who live away from

home needs to make their own food decisions, but a lack of dietary awareness

can lead to poor dietary and lifestyle choices. Since the transition to tertiary
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education necessitates a number of adjustments, including nutrition and lifestyle

changes, university students are particularly susceptible to these changes.

Price

Based on World Health Organization’s recommendations, researchers

further simulated how sugar-sweetened beverage intake would respond to a 20-

percent tax price increase. Tax-policy outcomes were examined across countries

by income decile for representative age and sex subgroups. To simulate

economic outcomes, they calculated changes in consumer spending and tax

revenue for each country over a 50-year period. Consumption levels and patterns

were calculated at the beginning of each five-year period and assumed to be

unchanged for this period. The potential for food taxes to improve health

outcomes in Australia has previously been examined. Sharma et. al., (2013)

recently examined the potential impact of a sugar-sweetened beverages tax in

Australia, using household panel data. They estimated that a 20-percent caloric

tax, resulting in a percentage increase in price, as opposed to an excise tax that

varies with the content of the product, could reduce total energy consumption by

about 10,000 kilojoules per person per year, and body weight by 0.93 kilogram,

at an average cost per household of $17.

Excise tax on sugar-sweetened beverages is not new. Since the 1980s,

several countries have implemented fiscal and regulatory measures on these

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beverages to increase revenue and reduce the demand for consumption of these

types of beverages, and evaluations have confirmed a reduction in sales and

intake of these products. One of the earliest measures undertaken was by Ireland

in the 1980s for the purpose of obtaining additional revenues. The effect

manifested an 11-percent decrease in consumption for every 10-percent

increase in price. Since then, many countries have taxed sugar-sweetened

beverages. Norway, one country which has joined the list recently, has seen the

effects of a decrease in consumption of lemonade and regular soft drinks

between 2001 and 2008 from 4.7 to 2.5 times per week and 2.3 to 1.6 times per

week respectively. Another, Hungary, saw a drop in sales for soft drinks from 117

million liters sold in the last quarter of 2011 to 69 million liters sold in the first

quarter of 2012.

As these experiences have shown, demand for beverages have

consistently been found to be price elastic, which in other words mean that a

small change in price results in large changes in the quantity demanded.

Likewise, in the Philippines, the purchasing decision for soft drinks is greatly

affected by pricing. Despite the increasing disposable income, the level of

demand among Philippine consumers for soft drinks has been influenced strongly

by pricing. Nonetheless, the awareness of the industry of the growing price

consciousness among consumers has led to the launching of carbohydrate

sources, energy drinks, and products in cheaper yet smaller pack sizes.
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Level of Risks

According to Summan et. al., (2020), people living in low-income countries

and middle-income countries face a growing burden of non-communicable

disease attributable to rising consumption of tobacco, alcohol and sugars. From

varying degrees, taxes on the commodities have helped reduce the consumption

and the associated disease burden while simultaneously raising revenue for

government. However, rates and structures of taxation vary widely by country

and are low in many parts of the world where consumption of the harmful

commodity is increasing. In this study, they simulated the global effects of

increased taxes to curb the burdens of tobacco smoking, alcohol consumption

and sugar-sweetened beverage (SSB) consumption on health, expenditure and

tax revenue outcomes. Globally, a growing burden of mortality is attributable to

the lifestyle behaviors, and in particular, to the consumption of tobacco, alcohol

and sugar-sweetened beverages. In low- and middle-income countries, the

increased disease burden falls on resource constrained healthcare systems.

According to an article written by Neel Burton (2017), married people are

14 percent more likely than single people to survive a heart attack and are able

to be released from the hospital two days sooner. There are proofs that marriage

has a significant health benefit, approximately equal to a healthy diet or daily

exercise. Lower socioeconomic position and being unmarried or divorced have

also been found to be associated with an increased SSBs intake. According to a

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2010 article published in "Nutrition Today," higher-income families are more likely

to spend money on fresh fruits and vegetables, whole grains, and other nutrient-

dense food products than lower-income families. The very reason for this was

nutritious foods are often more expensive than junk foods, many low-income

families cannot afford to buy them on a regular basis.

There is no doubt that sugar sweetened beverages and chronic diseases

have a parallel relation. According to Onagan et. al. (2019), both the consumption

of sugar-sweetened drinks and the incidence of obesity have escalated in the

Philippines in recent years. The word sweetened beverage was introduced by the

approved TRAIN Law to clarify that the tax includes both sugar and non-sugar

sweetened beverages. The rate of tax was fixed at 6.00 Philippine pesos per liter

of sweetened drinks. Higher tax rates on drinks containing high fructose corn

syrup were successfully promoted by the sugar industry, resulting in a differential

rate of 12 Philippine pesos per liter.

The enacted sweetened drink tax can help reduce premature deaths

associated with obesity and improve financial well-being. The Philippines is one

of 27 countries that has introduced a sweetened beverage tax, joining others

such as Chile, France, Mexico, Spain and six municipalities in the United States

of America. The World Health Organization and others have supported this

solution to curb the rapid escalation of obesity as a cost-effective policy solution,

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if market prices rise enough (10-20 percent) to minimize consumption. However,

there is still little proof of the efficacy and fairness of these new sweetened

beverage taxes (Saxena et. al., 2018). Tax policies apply to all consumers. The

price either be raised by a direct tax on the sugar-sweetened beverage or by a

drawback to the sugar-sweetened beverages by removing sales tax. Taxes were

levied mainly on sodas.

Based on the Department of Finance (2017), the most demanded sugar-

sweetened beverages are the well-known soft drinks that have high risks of

possible overweight, obesity and diabetes. One of the large companies worldwide

who produce this kind of product is Coca-Cola that provides reasonable and

affordable drinks for everyone. However, due to large consumption of sodas,

there is an increase of trend of overweight or obese Filipinos from 2003 to 2015

from any demographic consumers, particularly the poor people. According to the

gathered data of the International Diabetes Foundation, there are 3.5 million

people who acquired diabetes, specifically the Type 2 Diabetes in the Philippines.

In order to reduce the diseases, there will be an additional excise tax of P6 per

liter that is comprises of caloric or non-caloric sweetener. Then, high-fructose

corn syrup ingredients on a drink will be taxed an extra of P12. Coffee and milk

are not included in this law. Moreover, the known products of sugar-sweetened

beverage are carbonated beverages, sports and energy drinks, and sweetened

juice drinks.
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Government Policy

Fiscal policies, specifically taxation, can lower consumption of tobacco,

alcohol and sugar-sweetened beverage while raising government revenues. A

recent meta-analysis found that there is no safe level of alcohol consumption

(Griswold et. al., 2016). The World Bank (2020) incorporates the global evidence

of effectiveness of sweet tax globally. Arguably, taxation is not punitive but market

normalizing, as the true costs of sugar-sweetened beverages due to public

healthcare expenditures and other societal costs from excessive intake are not

reflected in current market prices. Thus, by increasing sugar-sweetened

beverage prices, as well as the other foods, taxes can play a huge role in

decreasing the consumption, lowering costs and improving societal wellbeing

(Eyles et. al., 2012).

Based on these considerations, a growing number of countries have

implemented or announced national sugar-sweetened beverage taxes, including

Norway in 1981 and Samoa in 1984; Australia, French Polynesia, Fiji and Nauru

between 2000 and 2007 and Finland, Hungary, France, Chile, Mexico, Barbados,

St. Helena and Dominica since 2011. In 2018, the Philippines, the United

Kingdom, South Africa, the Ireland, Peru and Norway implemented sugar-

sweetened beverage taxes. Colombia and Saudi Arabia have included such

taxes in recent proposals, while Bermuda, India and Indonesia are considering

similar measures. To investigate this issue, Muhammad et. al., (2019) examined
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sugar-sweetened beverage intake across 164 countries and estimated how

intake differences within and across countries are influenced by the price of

sugar-sweetened beverages and substitute caloric beverages such as fruit juice

and milk, as well as other factors such as national income, age and sex.

According to estimates from Ecuador’s Ministry of Public Health, currently,

Ecuador has a tax on sugar-sweetened beverage that is at 10-percent of price,

inclusive of taxes and could raise an estimate of USD 58 million. Such a tax,

implemented in 2001 has been unable to stop the increasing consumption of

sugar-sweetened beverage, which has been growing at 3-percent annually

between 2009–2014. There are neither estimates about the potential impact that

an increase in the tax on sugar-sweetened beverage would have on consumption

and on fiscal revenues, nor of the impact that subsidies to sugar-sweetened

beverages substitutes could have. This study provides elasticity estimates as a

first, necessary stage for such an assessment.

In addition to the health care cost savings, the intervention would also

raise substantial revenue for the government. Based on national household

expenditure data in 2010, expenditure on soft drinks amounted to AUD5.32 per

household per week, indicating that a 20-percent tax on these products would

raise taxation revenue in excess of AUD400 million each year, taking into account

changes in consumption in response to the tax. This revenue could be put

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towards health promotion activities, or used to subsidize healthy foods. In this

study, Stewart et. al., (2013) did not consider the impact of a sugar-sweetened

beverage tax on different socio-economic groups. Nevertheless, they note that

Australians of low socioeconomic status are disproportionately affected by high

rates of diet-related illnesses and are therefore likely to experience greater

dietary improvements as a result of a tax on sugar-sweetened beverages.

Inequitable aspects are likely to be further ameliorated if revenue was used to

support healthy eating initiatives and subsidies on healthy foods for low-

socioeconomic status households.

A study entitled “The Philippine tax reform law for acceleration and

inclusion (TRAIN): The surrounding factual, legal and ethical issues of taxing

power”, discusses that the concept of the train is making the poor people even

poorer. Despite the fact that for small enterprises, the self-employed, and

practitioners, the new tax reform package would simplify enforcement by

imposing a single rate of 8% (instead of an income tax and a percentage tax). To

ensure enforcement, tax administration steps such as the relaxing of bank

secrecy laws in fraud situations, the use of electronic receipts, and linking cash

registers/point of sale devices to BIR servers for simultaneous reporting of sales

and purchase data were included in the law's passage.

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According to World Health Organization, since the sugar-sweetened soda

tax was a health-related tax, the health department and the finance department

worked together to recommend a tax strategy that would optimize public health

and government revenue benefits and that considered assessments of the best

data available, including both agencies' in-house evidence. In particular, the

policy focused on the reduction of health risks through the implementation of

taxes which raised the price of sugar-sweetened beverages sufficiently to

discourage purchases and which could be extended to a broad range of goods,

thus discouraging unhealthy substitution. Sugar-sweetened drinks are likely to

become more affordable and more commonly consumed across the globe

without concerted policy intervention to increase prices.

Business Perception

Blanck (2012) provides evidence on sugar-sweetened beverage

consumption, particularly heavy consumption, overall and differential patterns

across subcategories of SSBs such as regular soda, fruit drinks, and sports or

energy drinks, using nationally representative data for adolescents, young adults,

and middle-aged and elder adults. This study also explored individual-level

associations of demographic and socioeconomic status (SES) with heavy sugar-

sweetened beverage consumption overall and by type including regular soda,

fruit drinks, and sports or energy drinks. Findings from the study regarding sugar-

sweetened beverage consumption patterns over time and individual-level

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associations with heavy intake are important to help design better targeted policy

measures in combating excessive SSB consumption. Previous studies observe

only average prices at the city level or examine prices at a selected sample of

stores within a city (Falbe et al., 2015), but there can be fundamental variation in

prices within markets. The range of prices of sugary drinks is also relevant since

the studies often use city average in each time of period that may have been

based on a varying set of stores (Grogger et al., 2015).

Studies have shown that sugar-sweetened beverages increase the rate of

obesity, metabolic syndrome, and type 2 diabetes. The mechanisms linking

sugar-sweetened beverages to weight gain include low satiety associated with

liquid calories, incomplete compensatory reduction in energy intake, and lack of

dietary compensation. The University of the Philippines Manila (UP Manila)

recognizes the importance of lowering consumption of free sugar to less than 10-

percent of daily energy intake, as suggested by the World Health Organization,

in order to lower the risk for obesity, metabolic diseases, heart diseases, and

dental carries. To discourage the purchase of sugar-sweetened beverages, the

University of the Philippines Manila, in general, supports House Bill No. 292 in its

pursuit of including an excise tax on sugar-sweetened beverages.

The Philippine Chamber of Food Manufacturers cited a 2016 study of the

University of Asia and the Pacific, which revealed that the excise tax will be a
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burden to sugar and coffee farmers and sari-sari store owners. The higher excise

taxes are being proposed to offset the effects of revenue loss that would come

with lower income taxes. The Department of Foreign Affairs has also argued that

these are necessary to allow the current administration to build infrastructure that

will attract investors (Pasion, 2017).

Synthesis of the Reviewed Literature and Studies

The consumption of sugar-sweetened beverages is contributing to the

increasing cases of obesity, heart disease and other chronic diseases. That is

why it is important for the Philippine government to implement an added excise

tax on sugary drinks to control the consumption behavior of the consumers. The

Tax Reform for Acceleration and Inclusion (TRAIN) Law has been implemented

last 2018. Under the said law, this includes the tax for sugary drinks which has

been debatable in the Philippines. This excise tax is said to be helping the society

to decrease the increasing rate of chronic diseases such as obesity and diabetes

especially that Philippines has an increasing trend of these diseases. The

University of the Philippines Manila (UP Manila) recognizes the importance of

lowering consumption of free sugar to less than 10-percent of daily energy intake,

as suggested by the World Health Organization, in order to lower the risk for

obesity, metabolic diseases, heart diseases, and dental carries. On the other

side, some studies claim that taxing sugary drinks will only make poor even
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poorer. The researchers conducted this study as this is prevalent among the

Filipino consumers who consume sugary drinks.

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CHAPTER III
RESEARCH METHODOLOGY

This chapter presents the methods that have been used in this study to

know the economic impact of the added excise tax on sugar-sweetened

beverages in Metro Manila. The researchers outline the research method used,

population which includes the determination of sample size, sampling design and

technique, description of the respondents, research instrument, validation of the

instrument, data gathering procedure, and statistical treatment of the data.

Research Method Used

The researchers made use of descriptive method in order to gather

relevant information from the consumers of sugar-sweetened beverages that will

be used to identify the economic impact of taxing sugary drinks. The researchers

particularly used the descriptive-survey approach which is used in gathering data

and aims to know the extent to which different conditions can be obtained among

the variables. The purpose of such method is to establish the range and

distribution of some social characteristics, such as education, occupation, and

location, and to discover how these characteristics may be related to certain

behavior patterns or attitudes (Zurmuehlin, 2011).

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Population, Sample Size and Sampling Technique

The researchers chose to conduct the survey from a sample population of

students and employed people who consume sugar-sweetened beverages in

Metro Manila. The reason for this selection was because soft drinks and

powdered juices, to name a few, are often consumed by individuals or families

mostly lunch time or before supper and that the result of this study was aimed to

identify if the excise tax has an impact to the sugary beverage consumers. The

researchers made use of random sampling technique in order to minimize bias

responses.

Description of Respondents

The respondents of this study are composed of students and employed

people who consume sugar-sweetened beverages with ages 18 years old and

above, and are residing within Metro Manila. A total of 103 were the respondents

of the study. They were categorized according to the following profile: age, sex,

marital status, city of residence, educational attainment, and average monthly

income.

Research Instrument

The researchers made use of an online survey through Google Form,

which served as a data collection instrument for this study. The consumers of
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sugar-sweetened beverages were given a link to respond with the given

statements which are applicable to their daily consumption of sugary drinks. The

researchers also posted the link of the Google Form in their timeline and different

groups in Facebook for the respondents to answer the survey. The researchers

adopted the 5-point Likert scale which is used to measure the respondent’s

behavior by measuring the extent to which they agree or disagree with a

particular statement. According to the Formplus Blog, a Likert scale is a

psychometric scale commonly involved in research used to represent people's

opinions and attitudes to a topic or subject matter.

Scale Range Verbal Interpretation

5 4.50 – 5.00 Strongly Agree

4 3.50 - 4.49 Agree

3 2.50 - 3.49 Moderately Agree

2 1.50 - 2.49 Disagree

1 1.00 – 1.49 Strongly Disagree

The survey form consisted of two main parts. Part I of the survey is

composed of items that describe the demographic profile of the respondents such
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as age, sex, marital status, city of residence, educational attainment, and average

monthly income. Part II of the survey assessed the consumption of the

consumers on sugar-sweetened beverages in terms of their personal preference,

the price of the beverages, level of risks, government policy, and business

perception. Each criterion had indicators that were rated by the respondents

using the Likert’s Five-point Scale with five (5) being the highest with a verbal

interpretation of ‘Strongly Agree’ and one (1) being the lowest which corresponds

to ‘Strongly Disagree’.

Validation of the Instrument

Upon validation of the survey questionnaire, consultation with the experts

was sought. Their comments and suggestions further helped the researchers in

polishing the survey questionnaire. The professors were able to check and

validate the content and suggested the appropriate statements and variables to

be included in the survey.

Data Gathering Procedure

The researchers utilized a survey questionnaire through Google Form to

gather information from the respondents. Respondents were given an ample time

to rate the statements indicated in the survey form. A total of nineteen (19) days

was spent in the distribution and retrieval of the online survey form.
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Statistical Treatment of Data

After gathering the pertinent data, the researchers compiled, collated, and

organized the data through the Google Sheets. The researchers sought the aid

of a statistician to subject the statistical treatment of data that were gathered in

order to answer the questions proposed in the study. The statistical treatment

included scoring, computing the percentage, and ranking of scores. The

processed data and information were discussed in the Chapter IV and V of this

study.

1. Frequency and Percentage. These are the tools used in analyzing the

demographic profile of the respondents in terms of age, sex, marital status, city

of residence, educational attainment, and average monthly income. Percentage

is calculated by taking the frequency in the category divided by the total number

of participants and multiplying by 100% (Korb, 2013).

The formula used is: P = 𝑓 /𝑛 * 100

Where:

P = Percentage Distribution

f = Frequency of Distribution

n = Total Number of Distribution

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2. Weighted Mean. The weighted mean is referred to as the central tendency

that was used in the study. Thus, the formula is shown below:

WM = ΣX / n

Where:

WM = Weighted Mean

X = Weighted Factor

Σ = Summation

N = Total number of respondents

3. Chi-square. It is used to compare the size and discrepancies between the

expected results and the actual results, given the size of the sample and the

number of variables in the relationship (Hayes, 2020).

Formula: x2 = Σ(O – E)2 / E

Where:

O = Observed value

E = Expected Value

Σ = Summation
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CHAPTER IV

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

This chapter presents the tabular presentation of collected data, analysis,

and their interpretation. Each group of data was analyzed and interpreted in

accordance to the sequence of problems as indicated from Chapter I. This

includes the corresponding tables presented consecutively to give further

understanding on data presentation and analysis.

Problem 1. Demographic Profile of the Respondents

1.1 Sex

Table 1

Frequency and Percentage Distribution of Respondents by Sex

Sex Frequency Percentage

Male 30 29.13%

Female 73 70.87%

TOTAL 103 100%

Table 1 shows the frequency and percentage distribution of the

respondents by sex. It can be deduced from the table that 73 or 70.87% of the

respondents were females and 30 or 29.13% were males.

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According to Ames et al., (2014) there have been consistent differences

in patterns of sugar-sweetened beverages consumption between males and

females, which highlights the importance of gender as a determinant of health

and sugar-sweetened beverages consumption. There were some notable

differences in results across drink types between males and females. Females,

but not males, were more likely to consume multiple rather than single drink types

such as sodas, fruit juice, or bottled water.

1.2 Family Size

Table 2

Frequency and Percentage Distribution of Respondents by Family Size

Family Size Frequency Percentage

1-3 persons 38 36.89%

4-6 persons 51 49.52%

7 and above 14 13.59%

TOTAL 103 100%

Table 2 shows the frequency and percentage distribution of respondents

by family size. It can be observed from the table that majority of the respondents

have 4 to 6 members in the family with 51 or 49.52%, followed by 1 to 3 members

with 38 or 36.89%; and the least of the respondents belong to 7 and above

members of the family with 14 or 13.59%.

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According to Chaudhury (2013), increased family size may adversely

affect the nutritional status of every member of the household, including

preschool children, because it may be associated with decreased per capita

human inputs. Larger family size may not lead to worsening of nutrient intake of

household members and children. One may also note economies of scale in

nutrition because of less waste and the possibility to purchase in bulk associated

with larger family size.

1.3 City of Residence

Table 3, as shown below, presents the frequency and percentage

distribution of respondents by city of residence. It can be observed from the table

that majority of the respondents were from Pasig City with 20 or 19.42%, followed

by Taguig with 19 or 18.45%, and next was Quezon City with 13 or 12.62%.

Meanwhile, the least of the respondents were from Pasay, Pateros, San Juan

and Valenzuela with only 1 respondent or 0.97%.

According to the data presented by the market research firm AC Nielsen,

the Philippine Association of Store and Carinderia Owners (PASCO), a non-profit

organization of micro retailers, computed the increase in the prices of the

beverages consumed by ordinary Filipinos (Pasion, 2017). The Philippine

Chamber of Food Manufacturers also cited a 2016 study of the University of Asia
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and the Pacific, which revealed that the excise tax will be a burden to sugar and

coffee farmers and sari-sari store owners.

Table 3
Frequency and Percentage Distribution of Respondents by City of
Residence

City of Residence Frequency Percentage

Caloocan 6 5.83%

Las Piñas 3 2.91%

Makati 5 4.85%

Malabon 2 1.94%

Mandaluyong 10 9.71%

Manila 9 8.74%

Marikina 3 2.91%

Muntinlupa 3 2.91%

Navotas 2 1.94%

Parañaque 4 3.88%

Pasay 1 0.97%

Pasig 20 19.42%

Pateros 1 0.97%

Quezon City 13 12.62%

San Juan 1 0.97%

Taguig 19 18.45%

Valenzuela 1 0.97%

TOTAL 103 100%

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1.4 Marital Status

Table 4

Frequency and Percentage Distribution of Respondents by Marital Status

Marital Status Frequency Percentage

Single 88 85.44%

Married 13 12.62%

Widowed 2 1.94%

Total 103 100%

Table 4 shows the frequency distribution of the respondents according to

their marital status. It can be observed that 88 out of 103 respondents were single

that got the highest frequency of 85.44%. Then the married respondents were 13

or 12.62%. Lastly, 2 persons or 1.94% of the sample were widowed.

The table implies that most of the respondents were single. According to

an article written by Neel Burton (2017), married people were 14 percent more

likely than single people to survive a heart attack and were able to be released

from the hospital two days sooner. There were proofs that marriage has a

significant health benefit, approximately equal to a healthy diet or daily exercise.

Unmarried people were more likely than married people to consume carbonated

drinks, while widowed, divorced, or separated individuals were less likely than

married people to consume carbonated drinks (Mishra, 2020).

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1.5 Educational Attainment

Table 5
Frequency and Percentage Distribution of Respondents by Educational
Attainment

Educational Attainment Frequency Percent

Elementary Level 0 0%

Elementary Graduate 2 1.94%

High School Level 2 1.94%

High School Graduate 17 16.51%

College Level 59 57.28%

College Graduate 20 19.42%

Master’s Degree 3 2.91%

Total 103 100%

Table 5 shows the frequency and percentage distribution of the

respondents according to their educational attainment, wherein college level has

the highest frequency of 59 or 57.28%. Next were the respondents that fall under

the category of college graduate were 20 persons or 19.42% of frequency. Then

those respondents under high school graduate which were 17 or 16.51%. On the

other hand, in master’s degree category were 3 or 2.91%. Respondents that are

high school level and elementary graduates were the same as 2 or 1.94%. Lastly,

there were no respondents that fell under elementary level or 0%.

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The table appears that most of the respondents were under college level.

According to Nakhooda and Wiles (2017), students who live away from home

needs to make their own food decisions, but a lack of dietary awareness can lead

to poor dietary and lifestyle choices. Since the transition to tertiary education

necessitates a number of adjustments, including nutrition and lifestyle changes,

university students were particularly susceptible to these changes.

1.6 Average Monthly Income

Table 6

Frequency and Percentage Distribution of Respondents by Average

Monthly Income

Average Monthly Income Frequency Percentage

PhP20,000 and below 68 66.02%

PhP20,001 - PhP30,000 16 15.53%

PhP30,001 - PhP40,000 9 8.74%

PhP40,001 - PhP50,000 6 5.83%

PhP50,001 and above 4 3.88%

Total 103 100%

Table 6 shows the frequency and percentage distribution of respondents

based on their average monthly income. It can be noted that the results above

were in a descending order, which remarks that PhP20,000 and below average
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monthly income have the highest frequency of 68 respondents which is equal to

66.02%. Followed by the average monthly income of PhP20,001 to PhP30,000

with a frequency of 16 or 15.53%. Next were those respondents under the

category of PhP30,001 to PhP40,000 average monthly income having a

frequency of 9 or 8.74%. Then in PhP40,001 to PhP50,000 were 6 or 5.83%.

Lastly, respondents having a PhP50,001 and above average monthly income

were 4 out of 103 respondents or 3.88%.

According to a 2010 article published in "Nutrition Today," higher-income

families were more likely to spend money on fresh fruits and vegetables, whole

grains, and other nutrient-dense food products than lower-income families. The

very reason for this was nutritious foods were often more expensive than junk

foods, many low-income families cannot afford to buy them on a regular basis.

Problem 2. Respondents’ Assessment on their Consumption of Sugary

Drinks

2.1 Personal Preference

Table 7 exhibits the respondents’ assessment on their consumption of

sugary drinks in terms of the personal preferences.

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Table 7
Respondents’ Assessment on their Consumption of Sugary Drinks
in terms of Personal Preference

Weighted
Personal Preference Verbal Interpretation Rank
Mean

When ordering in fast

food chains, I usually
3.80 Agree 1
pair soft drinks or juice in
my ordered meal.

I would rather buy sodas

instead of water to 2.82 Moderately Agree 4
quench my thirst.

I prefer consuming
coffee instead of energy
3.48 Moderately Agree 2
drinks because it is more
affordable.

I look first for the sugar

level of the beverage 2.53 Moderately Agree 5
before purchasing it.

I tend to purchase sugar-

sweetened beverages
2.91 Moderately Agree 3
with low content of
sugar.

Overall Weighted
3.11 Moderately Agree
Mean

Data reveals that the respondents, who are the consumer of sugar-

sweetened beverages, attributed the first rank that is ordering soft drinks or juice

to be paired on their meals in fast food chains. It was evidenced by the 3.80 mean
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and a verbal interpretation of ‘Agree’. “Looking for the sugar level of the beverage

before purchasing” ranked 5th with a weighted mean of 2.53 and a verbal

interpretation of ‘Moderately Agree’.

According to Maslen et al., (2019), different journalists and academic

commentators, who are also consumers, have questioned whether sugar tax has

unjustifiable implications for consumer choice. Such arguments appeal to the

idea that sugar taxes reduce individuals’ freedom and compromise their

independence.

2.2 Price

Table 8 presents the respondents’ assessment on their consumption of

sugary drinks in terms of the price. Data conveys that the respondents attributed

the first rank that is the increment in price of sugary drinks could affect the

purchasing behavior of consumers. It was evidenced by the mean of 4.03 and a

verbal interpretation of ‘Agree’. “The Philippines shall implement higher sugar

taxes to offset the costs incurred by the CoVid-19 pandemic outbreak.” ranked

5th with a weighted mean of 2.72 and a verbal interpretation of ‘Moderately

Agree’. This means that the consumers of sugary drinks do not want for a tax

increase as it will lead to an increment in price of sugar-sweetened beverages

which, on the other hand, could affect the purchasing behavior of consumers.
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Table 8
Respondents’ Assessment on their Consumption of Sugary Drinks in
terms of the Price

Price Weighted Mean Interpretation Rank

The Philippines shall

implement higher sugar
taxes to offset the costs 2.72 Moderately Agree 5
incurred by the CoVid-19
pandemic outbreak.

I still tend to purchase

sugary drinks even if the 3.47 Moderately Agree 2
price has increased.

The increment in price of

sugary drinks could affect
4.03 Agree 1
the purchasing behavior
of consumers.

The price of sugar-

sweetened beverage
3.27 Moderately Agree 3
shall depend on the sugar
level it contains.

I consider the price rather

than the taste when
3.03 Moderately Agree 4
buying sugar-sweetened
beverages.

Overall Weighted Mean 3.30 Moderately Agree

Essman (2019) concluded that if the sugar tax makes a product expensive

enough, then there may be cases in which the option of purchasing sugar-
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sweetened beverages in the same quantity as without the tax is effectively

removed. When individuals can no longer afford to purchase sugary drinks in the

same quantities as they used to, there might be circumstances that the option to

do so has not just been made less desirable.

2.3 Level of Risks

Table 9
Respondents’ Assessment on their Consumption of Sugary Drinks in
terms of the Level of Risks

Weighted
Level of Risks Interpretation Rank
Mean

There must be health warning

labels in front of the packaging of 4.28 Agree 3
sugary drinks.

Sugary drinks can damage one’s

4.47 Agree 1
health.

The added excise tax on sugary

drinks may help reduce obesity- 3.61 Agree 4
related premature deaths.

Children who consume carbonated

sugary drinks have a nearly double
4.35 Agree 2
increased risk of developing dental
cavities.

If we want to improve public health,

we should tax the things that can kill Moderately
3.49 5
us such as sugar-sweetened Agree
beverages.

Overall Weighted Mean 4.04 Agree

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Table 9 exhibits the assessment of respondents on their consumption on

sugary drinks in terms of the level of risks. As shown above, data reveals that

respondents agree with the statement “Sugary drinks can damage one’s health”

which ranked 1st with a mean of 4.47. “Children who consume carbonated sugary

drinks have a nearly double increased risk of developing dental cavities” ranked

2nd with a weighted mean of 4.35 and a verbal interpretation of ‘Agree’. “If we

want to improve public health, we should tax the things that can kill us such as

sugar-sweetened beverages” ranked fifth with a weighted mean of 3.49 and a

verbal interpretation ‘Moderately Agree’.

According to the Department of Finance (2017), the most demanded

sugar-sweetened beverages are the well-known soft drinks which have high risks

of possible overweight, obesity and diabetes. Due to large consumption of sodas,

there is an increase of trend of overweight or obese Filipinos from 2003 to 2015

from any demographic consumers, particularly the poor people.

Problem 3. Respondent’s Assessment on Excise Tax of Sugar-sweetened

Beverages

3.1 Government Policy

Table 10, as shown below, exhibits the respondents’ assessment on their

consumption of sugary drinks according to government policy. It is noticeable that

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the overall weighted mean was 3.59 which indicates that respondents agree in

most of the statements about government policy.

Table 10

Respondents Assessment on the Excise Tax of Sugary Drinks in terms of

the Government Policy

Government Policy Mean Interpretation Rank

I am fully aware of the added

excise tax on sugary drinks 3.73 Agree 1
implemented by the TRAIN Law.

The added excise tax in sugary

Moderately
drinks is indeed effective for the 3.36 5
Agree
economic growth.

There must be a progressive

health effect on taxing sugary
3.72 Agree 2
drinks for the people belonging in
low-income category.

The added excise tax on sugary

drinks could provide increment 3.61 Agree 3
on healthcare funds.

The added excise tax on sugary

drinks could help lower the 3.56 Agree 4
consumption of sugary drinks.

Overall Weighted Mean 3.59 Agree

In social contract theory of John Locke, it stated that people work together

in society in accordance with an arrangement that defines moral and political

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rules of conduct. Some people believe that if we live according to a social

contract, we should live morally by our own choice and not because a divine

being wants it. Above everything, it provides harmony in every society.

3.2 Business Perception

Table 11

Respondents Assessment on the Excise Tax of Sugary Drinks in

terms of Business Perception

Business Perception Mean Interpretation Rank

Retailers of sugary drinks, such as

sari-sari stores, should limit the Moderately
3.27 4
stocks of sugar-sweetened Agree
beverages to avoid decline of sales.

Unlimited beverage refills in food Moderately

2.85 5
outlets must be discontinued. Agree

Sweet tax can encourage

manufacturers to reformulate
3.92 Agree 3
sugary drinks to minimize the
amount of sugar they contain.

Fast food chains which offer

flavored juices shall substitute to 4.01 Agree 2
fresh fruit juices.

Small and large retailers are greatly

affected with the price increase of 4.36 Agree 1
sugary drinks.

Overall Weighted Mean 3.68 Agree

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Table 11 shows the respondents assessment on their consumption of

sugary drinks based on business perception. It is evident that respondents could

see eye to eye the certainty in every statement that the researchers provided as

it resulted to a high overall weighted mean of 3.68 that indicates acceptance or

agreement of 103 respondents.

According to D. Stone (2017), perception has always played a crucial role

in business. It can be a big key in helping a company develop and succeed in the

market if properly implemented and used. It gives the company a new viewpoint

that will help it grow and build leading growth opportunities in the future.

Table 12

Consolidated Factors of Sugar-sweetened Beverages Consumption

Indicators Grand Mean Interpretation Rank

Personal Preference 3.11 Moderately Agree 5

Price 3.30 Moderately Agree 4

Level of Risks 4.04 Agree 1

Government Policy 3.59 Agree 3

Business Perception 3.68 Agree 2

Table 12 exhibits the consolidated factors of sugar-sweetened beverages

consumption. As shown in the data, Level of Risks ranked 1st with a grand mean

of 4.04 and verbal interpretation of ‘Agree’. This means that overconsumption of

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sugary drinks can be associated with an increased risk of disease for both adults

and children. Business Perception and Government Policy ranked 2nd and 3rd,

with grand means of 3.68 and 3.59, respectively. The Price and the Personal

Preference of respondents attained grand means of 3.30 and 3.11, respectively,

which ranked 4th and 5th.

As Hagenaars, Jeurissen and Klazinga (2018) note in a comparison of

sugar-sweetened beverage policies in the Europe and the United States, most of

the literatures have focused on the effects of policy changes on consumer

behavior rather than on the factors. One such factor that is worth mentioning is

the importance of an SSB tax, that is, its visibility to consumers. If a tax is included

in the sales price, as is almost always true with respect to the value-added tax, it

may alter the consumption patterns more (Chetty, Looney and Kroft 2009).

Problem 4. Significant relationship of the added excise tax as assessed by

the consumers of sugar-sweetened beverages when they are grouped

based on their average monthly income.

Table 13
Test of Significant Relationship

Pearson Chi-
P-Value alpha Interpretation
Square

18.866 0.972 0.05 Test is not significant

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Table 13 shows the relationship between the assessment of respondents’

consumption of sugar-sweetened beverages in Metro Manila.

In this study, there is no significant relationship between the average

monthly income of consumers and the five (5) factors of sugar-sweetened

beverage consumption since the P-value is greater than the alpha of 0.05.

According to the study conducted by Sánchez-Romero (2020), they found no

statistically significant difference in the effect of the tax by income level. However,

there was an indication that their participants in the middle class of income could

have experienced a larger reduction in consumption than other income groups.

This study reveals that there is not enough evidence to support the claim that

respondents’ assessment of the added excise tax has a significant relationship

with the sugary beverage consumption when grouped according to their average

monthly income.
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CHAPTER V

SUMMARY OF FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

This chapter discusses the summary of the findings, conclusions, and

recommendations of the economic impact of the added excise tax on sugar-

sweetened beverages in Metro Manila.

Summary of Findings

1. Demographic profile of the respondents

The study revealed that most respondents are female with 73 or 70.87%

than the male respondents of 30 or 29.13%. When it comes to family size,

majority of the respondents belong to 4-6 family members with 51 or 49.52%,

followed by 1-3 family members with 38 or 36.89%, and the least of the

respondents belong to 7 and above members with 14 or 13.59%. Furthermore,

with regard to the city of residence of the respondents, the majority of them were

from Pasig City and Taguig City with 20 or 19.42% and 19 or 18.45%,

respectively. Followed by respondents residing from Quezon City with 13 or

12.62%. The places with the least respondents were Pasay City, Pateros, San

Juan, and Valenzuela, with 1 or 0.97%. In terms of the respondents’ civil status,

88 or 85.44% of the respondents are single. More than half of the samples

attained college level with 59 or 57.28%. Followed by college graduates with 20

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or 19.42%. Then high school graduates with 17 or 16.51%. Next were

respondents that have master’s degrees with 3 or 2.91%. Lastly, the least number

of respondents were high school level and elementary graduate that was the

same with 2 or 1.94%. Additionally, in terms of average monthly income, 68 or

66.02% were earning PhP20,000 and below. Followed by respondents earning

PhP20,001-PhP30,000 with 16 or 15.53%. Then 9 or 8.74% of the respondents

were earning PhP30,001-PhP40,000. Next were respondents with PhP40,001-

PhP50,000 average monthly income with 6 or 5.83%. And the category with the

minimal respondents were those earning PhP50,001 and above monthly income

with 4 or 3.88%.

2. Consumption of Sugar-sweetened Beverages

2.1 Personal Preference

The respondents assessed their consumption of sugary drinks in terms of

personal preference with a verbal interpretation of ‘Moderately Agree’ and a

weighted mean of 3.11.

2.2 Price

The respondents assessed their consumption of sugary drinks in terms of

price with a verbal interpretation of ‘Moderately Agree’ and a weighted mean of

3.30.
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2.3 Level of Risks

The respondents assessed their consumption of sugary drinks regarding the

level of risks with a verbal interpretation of ‘Agree’ and a weighted mean of 4.04.

3. Excise Tax on Sugar-sweetened Beverages

3.1 Government Policy

The respondents assessed their consumption of sugary drinks in terms of

government policy with a verbal interpretation of ‘Agree’ and having a weighted

mean of 3.59.

3.2 Business Perception

The respondents assessed their consumption of sugary drinks in terms of

business perception with a verbal interpretation of ‘Agree’ and a weighted mean

of 3.68.

4. Significant relationship of the added excise tax as assessed by the

consumers of sugar-sweetened beverages when they are grouped based

on their average monthly income. The overall computed p-value of 0.972 is

lower than the critical value of 1.645 at 0.05 percent level of significance with 12

degrees of freedom. Therefore, there is no significant relationship between the

average monthly income of consumers and the five (5) factors of sugar-

sweetened beverage consumption.

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Conclusions

Based on the findings of the study, the following conclusions were

concluded:

1. Demographic Profile

Most of the respondents are female, belonging to 4 to 6 members in family

size, single, residing at Pasig City, completed college level, and are earning

PhP20,000 and below.

2. Consumption of Sugar-sweetened Beverage

The respondents’ assessment on their consumption of sugar-sweetened

beverages according to the Level of Risks was “Agree”. This means that

consumers do agree with the associated health risk behavior on the sugar-

sweetened beverage. Price and Personal Preference were assessed as

“Moderately Agree” which ranked 4th and 5th, respectively.

3. Excise Tax on Sugar-sweetened Beverages

The respondents’ assessment on the excise tax on sugary drinks in terms

of Government Policy and Business Perception was “Agree”. This means that the

consumption and the policies being implemented by the government from the

TRAIN Law have an impact to the consumers and the businesses.

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4. Test of Significant Relationship

The average monthly income of the respondents does not relate

significantly to the response of the sugar-sweetened beverages consumers in

Metro Manila when respondents are grouped based on their average monthly

income.

Recommendations

Based on the findings and conclusions derived from the study, the

researchers humbly offer the following recommendations:

1. Make a public health message clear and understandable to every consumer,

especially young adults, to increase public support on the tax of sugar-sweetened

beverages. Barangay in the community serves as a primary implementing unit of

government policies; therefore, they could be the ones to provide seminars that

will educate consumers on how the sugar tax affects not just the economy but

also every individual’s health. Policy options should be implemented as part of

wider health nutrition strategies.

2. The government must impose a new tax on sodas proportionate to their sugar

content; this can be an effective alteration to the existing tax, which is imposed

only on specific beverages. The tax revenue from the sugar sector shall be

precisely allocated to one of the most significant contributors, which are the
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farmers. It shall be used to fund support services that will assist people in

reducing sugar intake.

3. Food outlets or establishments should develop and promote a variety of

healthier beverage options closer to the price range of sugar-sweetened

beverages; these may include beverages with reduced sugar content and smaller

portions of containers. There must be a clean and potable water station that

consumers can opt to drink and are readily available and accessible in public

areas. By doing so, they can promote a healthy lifestyle and decrease the risk of

having chronic diseases.

4. Finally, future researchers should conduct further research to uncover

additional variables that could have been discovered by researchers who were

unable to do so due to a lack of time or financial capacity. To obtain the most

accurate and reliable results possible, a deeper understanding of the topic and

the correct statistical formula should be correctly applied and used. It is also

recommended to have a larger scope in terms of population and should be

conducted in different Philippines regions.

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Veerman, J. L., Sacks, G., Antonopoulos, N., & Martin, J. (2016). The Impact of
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Venzon, C. N. S. W. (2017, June 16). Duterte’s tax bill faces uphill battle in
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APPENDIX A
Sample Survey Questionnaire

CONSENT FORM

Good day! We are the 3rd year Accountancy students of Rizal

Technological University who are currently conducting a research entitled, “The

Economic Impact of the Excise Tax on Sugar-sweetened Beverages in

Metro Manila”. This online survey that is needed for the said research and will

accumulate approximately ten (10) minutes of your time.

For your confidentiality, inclusion of your name will be optional, therefore,

it will not appear on the survey. We will only use the data and results gathered

without containing your name.

By clicking on the “Agree” button, it indicates that:

• You have read the above information

• You voluntarily agree to participate

• You are 18 years of age or older

 Agree

 Disagree
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PART I. RESPONDENT’S PROFILE

Instruction: Kindly provide the information needed by clicking the circle mark in

the choices.

Name (Optional): ___________________________

1.1 Sex:

o Male

o Female

1.2 Family Size:

o 1-3 persons

o 4-6 persons

o 7 and above

1.3 City/Municipality

o Caloocan o Manila

o Las Piñas o Marikina

o Makati o Muntinlupa

o Malabon o Navotas

o Mandaluyong o Parañaque
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o Pasay o San Juan

o Pasig o Taguig

o Pateros o Valenzuela

o Quezon City

1.4 Marital Status

o Single

o Married

o Widowed

1.5 Educational Attainment

o Elementary Level (Undergrad) o College Level (Undergrad)

o Elementary Graduate o College Graduate

o High School Graduate o Other: ________________

1.6 Average Monthly Income

o ₱20,000 and below o ₱40,001 - ₱ 50,000

o ₱20,001 - ₱30,000 o ₱50,001 and above

o ₱30,001 - ₱40,000
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PART II. RESPONDENTS’ ASSESSMENT ON THE CONSUMPTION OF

SUGAR-SWEETENED BEVERAGES

Instruction: Kindly rate each item honestly based on your knowledge about the

sugar-sweetened beverages statements using the following scales:

5 – Strongly Agree
4 – Agree
3 – Somewhat Agree nor Disagree
2 – Disagree
1 – Strongly Disagree

5 4 3 2 1

2.1 PERSONAL PREFERENCE

2.1.1. When ordering in fast food chains, I usually pair

soft drinks or juice in my ordered meal.

2.1.2. I would rather buy sodas instead of water to

quench my thirst.

2.1.3. I prefer consuming coffee instead of energy

drinks because it is more affordable.

2.1.4. I look first for the sugar level of the beverage

before purchasing it.

2.1.5. I tend to purchase sugar-sweetened beverages

with low content of sugar.

2.2 PRICE

2.2.1. The Philippines shall implement higher sugar

taxes to offset the costs incurred by the CoVid-19
pandemic outbreak.
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2.2.2. I still tend to purchase sugary drinks even if the

price has increased.

2.2.3. The increment in price of sugary drinks could

affect the purchasing behavior of consumers.

2.2.4. The price of sugar-sweetened beverage shall

depend on the sugar level it contains.

2.2.5. I consider the price rather than the taste when

buying sugar-sweetened beverages.

2.3. LEVEL OF RISKS

2.3.1. There must be health warning labels in front of

the packaging of sugary drinks.

2.3.2. Sugary drinks can damage one’s health.

2.3.3. The added excise tax on sugary drinks may

help reduce obesity-related premature deaths.

2.3.4. Children who consume carbonated sugary

drinks have a nearly double increased risk of
developing dental cavities.

2.3.5. If we want to improve public health, we should

tax the things that can kill us such as sugar-
sweetened beverages.

I confirm that the information provided is true and correct to the best of my

knowledge and I allow the researchers to use my answers for their data

gathering procedure.

 ACCEPT
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APPENDIX B
LETTER FOR VALIDATION

Rizal Technological University

College of Business and Entrepreneurial Technology
Boni Ave., Brgy. Malamig, Mandaluyong City

February 16, 2021

MR. JP DELAS NIEVES

Economics Instructor

Rizal Technological University

Boni Ave., Mandaluyong City

Dear Sir:

Good day!

We are the 3rd year Accountancy students from College of Business and
Entrepreneurial Technology of Rizal Technological University. We are currently conducting
a study, as part of our course requirement, entitled “The Economic Impact of Tax on Sugar-
sweetened Beverages in Metro Manila”.

In connection with this, we humbly request for your assistance with regard to the
validation of our survey questionnaire necessary to our study. Knowing that you are most
fit and capable to validate through your expertise, we would like to ask for your approval
as one of our validators. Rest assured that the data gathered will be for research purposes
only and will be kept with utmost discretion and confidentiality.

We are looking forward for your positive response on this matter. Thank you!

Sincerely yours,

ABAGON, JANE CRIS D. PINEDA, MARICAR R.

Student – Researcher Student – Researcher
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Rizal Technological University

College of Business and Entrepreneurial Technology
Boni Ave., Brgy. Malamig, Mandaluyong City

February 16, 2021

MR. KOBEY GABRIEL

Practical Research Teacher

Tipas National High School

Ligid-Tipas, Taguig City

Dear Sir:

Good day!

We are the 3rd year Accountancy students from College of Business and
Entrepreneurial Technology of Rizal Technological University. We are currently
conducting a study, as part of our course requirement, entitled “The Economic Impact
of Tax on Sugar-sweetened Beverages in Metro Manila”.

In connection with this, we humbly request for your assistance with regard to
the validation of our survey questionnaire necessary to our study. Knowing that you are
most fit and capable to validate through your expertise, we would like to ask for your
approval as one of our validators. Rest assured that the data gathered will be for
research purposes only and will be kept with utmost discretion and confidentiality.
We are looking forward for your positive response on this matter. Thank you!

Sincerely yours,

ABAGON, JANE CRIS D. PINEDA, MARICAR R.

Student – Researcher Student – Researcher
 COLLEGE OF BUSINESS AND ENTREPRENEURIAL TECHNOLOGY

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Rizal Technological University

College of Business and Entrepreneurial Technology
Boni Ave., Brgy. Malamig, Mandaluyong City

February 16, 2021

MR. MARKIE GRABILLO, CPA

College Professor
Rizal Technological University
Boni Ave., Mandaluyong City

Dear Sir:

Good day!

We are the 3rd year Accountancy students from College of Business and
Entrepreneurial Technology of Rizal Technological University. We are currently
conducting a study, as part of our course requirement, entitled “The Economic Impact
of Tax on Sugar-sweetened Beverages in Metro Manila”.
In connection with this, we humbly request for your assistance with regard to the
validation of our survey questionnaire necessary to our study. Knowing that you are
most fit and capable to validate through your expertise, we would like to ask for your
approval as one of our validators. Rest assured that the data gathered will be for
research purposes only and will be kept with utmost discretion and confidentiality.
We are looking forward for your positive response on this matter. Thank you!

Sincerely yours,

ABAGON, JANE CRIS D. PINEDA, MARICAR R.

Student – Researcher Student – Researcher
 COLLEGE OF BUSINESS AND ENTREPRENEURIAL TECHNOLOGY

ACCOUNTANCY DEPARTMENT Page 78

APPENDIX C

Certificate of Statistical Treatment

This is to acknowledge that the research entitled:

THE ECONOMIC IMPACT OF EXCISE TAX ON SUGAR-SWEETENED

BEVERAGES IN METRO MANILA

Written by:

Abagon, Jane Cris D.

Pineda, Maricar R.

Has employed correct statistical treatment of data as edited and validated by the
undersigned on April 15, 2021.

Francis Banaag, MBA, CMP, LSSBB

Statistician
 COLLEGE OF BUSINESS AND ENTREPRENEURIAL TECHNOLOGY

ACCOUNTANCY DEPARTMENT Page 79

APPENDIX D

Certificate of Editing
This is to acknowledge that the research entitled:

THE ECONOMIC IMPACT OF EXCISE TAX ON SUGAR-SWEETENED

BEVERAGES IN METRO MANILA

Written by:

Abagon, Jane Cris D.

Pineda, Maricar R.

Has been proofread and returned to the clients on June 5, 2021.

Jovert B. Gaveria, LPT

Proofreader
 COLLEGE OF BUSINESS AND ENTREPRENEURIAL TECHNOLOGY

ACCOUNTANCY DEPARTMENT Page 80

APPENDIX E
CURRICULUM VITAE

MARICAR ROMULO PINEDA

Bachelor of Science in Accountancy

28 Velasquez St. +639476393266

Bagong Ilog, Pasig City, 1600 [email protected]
OBJECTIVE

To seek a challenging opportunity where I will be able to utilize my organizational

skills, and ability to work with an environment which will allow me to grow personally
and professionally.
EDUCATION
Tertiary :Bachelor of Science in Accountancy
Rizal Technological University- Boni Campus
704 Boni Avenue Corner Sacrepante, Mandaluyong City
2018-Present

Senior High School : Accountancy, Business and Management

Rizal High School
Dr. Sixto Antonio Ave. Caniogan, Pasig City
2016-2018

Junior High School :Rizal High School

Dr. Sixto Antonio Ave. Caniogan, Pasig City
2012-2016

Primary :Bagong Ilog Elementary School

1 Velasquez St. Bagong Ilog, Pasig City
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ACCOUNTANCY DEPARTMENT Page 81

2006-2012
PERSONAL DETAILS

Age : 20 years old

Sex : Female
Date of Birth : December 30, 2000
Place of Birth : Pasig City
Civil Status : Single
Nationality/Citizenship : Filipino
Language Known : English, Filipino
Father : Edgardo B. Pineda
Mother : Maria Teresa R. Pineda
Height : 5’4”
Weight : 65 kg.
Religion : Roman Catholic

WORK EXPERIENCE

On-the-Job Training/Work Immersion

Rizal High School
Dr. Sixto Antonio Ave. Caniogan, Pasig City
January 2018

SKILLS
• Computer literate and can communicate well both verbally and written.
• Has intermediate knowledge in Microsoft Office Applications including MS Word, MS
Power Point, and MS Excel.
• Has knowledge in bookkeeping.
• Can learn fast and calculate easily.
• Motivated to work independently.

AWARDS AND RECOGNITIONS

• General Mathematics Quiz Bee Finalist
• Senior High School With High Honors
• Rizal Technological University – Boni Campus CBET Dean’s Lister (2018-Present)
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ACCOUNTANCY DEPARTMENT Page 82

CHARACTER REFERENCES

Ms. Rhizza Tamayo

Professor, Rizal High School
+639474256345

Ms. Christine Guillermo

Guidance Counselor, Rizal High School
+639564131580

Ms. Geralyn Pale

Professor, Rizal High School
+639173004349

I hereby declare that the above information is true and correct to the best of my
knowledge and abilities.

Maricar R. Pineda
Applicant
 COLLEGE OF BUSINESS AND ENTREPRENEURIAL TECHNOLOGY

ACCOUNTANCY DEPARTMENT Page 83

JANE CRIS DALIDA ABAGON

Bachelor of Science in Accountancy

120 Dreamville Ligid +639776431263

Tipas, Taguig City. 1638 [email protected]
OBJECTIVE

To evolve and grow in my chosen field of career and to learn to utilize my

knowledge and skills to become a better version of myself.

EDUCATION
Tertiary : Bachelor of Science in Accountancy
Rizal Technological University- Boni Campus
704 Boni Avenue Corner Sacrepante, Mandaluyong City
2018-Present

Senior High School : Accountancy, Business and Management

Tipas National High School
Barangay Palingon-Tipas Taguig City
2016-2018

Junior High School : Tipas National High School

Barangay Palingon-Tipas Taguig City
2012-2016

Primary : Tipas Elementary School

Barangay Palingon-Tipas Taguig City
2006-2012
 COLLEGE OF BUSINESS AND ENTREPRENEURIAL TECHNOLOGY

ACCOUNTANCY DEPARTMENT Page 84

PERSONAL DETAILS

Age : 21 years old

Sex : Female
Date of Birth : July 19,1999
Place of Birth : Taguig City
Civil Status : Single
Nationality/Citizenship : Filipino
Language Known : English, Filipino
Father : Jayjun C. Abagon
Mother : Cristina D. Abagon
Height : 5’
Weight : 48 kg.
Religion : Iglesia Ni Cristo

WORK EXPERIENCE

On-the-Job Training/Work Immersion

Monocrete Construction
Levi Mariano Avenue, Taguig, Metro Manila
September 1, 2017 - October 31, 2017

Special Program of the Employment of Students (SPES)

Municipality of Taguig City
Gen. Luna St, Taguig, 1637 Metro Manila
May 2, 2017 –May 29, 2017

SKILLS
• Computer literate.
• Has intermediate knowledge in Microsoft Office Applications including MS Word,
MS Power Point, MS Excel, and MS Publisher.
• Has knowledge in bookkeeping.
• Can learn fast and calculate easily.
• Can easily adapt and always open for improvements to strengthen my ability and
expertise.
• Able to work independently or with a group.

AWARDS AND RECOGNITIONS

• Senior High School Academic Excellence Awardee (Grade 11)
• Senior High School With Honors
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ACCOUNTANCY DEPARTMENT Page 85

• Rizal Technological University – Culture and Arts Circle of Excellence Awardee

• Rizal Technological University – Boni Campus CBET Dean’s Lister (2019)

ORGANIZATIONS
• Tipas National High School Math Club Officer – Secretary (2013-2014)

CHARACTER REFERENCES

Mr. Faustino Oguan

Professor, Rizal Technological University
[email protected]

Mrs. Mylene M. Cornejo

Instructor, Tipas National High School
+639772889636

Mrs. Maureen S. Sanchez

Facilitator, Tipas National High School
+639993483783

I hereby declare that the above information is true and correct to the best of
my knowledge and abilities.

Jane Cris D. Abagon

Applicant
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ACCOUNTANCY DEPARTMENT Page 1