A proposed tax on unhealthy packaged foods could encourage healthier choices and raise revenue. But in a country where nutritious diets remain out of reach for millions, the bigger question may be whether healthier choices are affordable enough to begin with.
Every few years, an idea resurfaces: tax junk food, tax sugary drinks, and watch the country get a little healthier.
The idea sounds simple enough. In practice, however, it opens a much more complicated policy debate—one involving public health, household budgets, food prices, agriculture and the question of what people can realistically afford to eat.
The Department of Finance and the Department of Health have considered a proposal to slap an excise tax on packaged junk food and to raise the existing tax on sweetened beverages. The proposal was announced in 2023 and framed as a response to rising diabetes, obesity, and diet-related diseases. It is a policy with a clear, well-intentioned goal. It is also a policy that, depending on where you are financially, could land very differently.
What is Actually Being Proposed?
Under the 2023 proposal, pre-packaged food that exceeds the DOH-set threshold for fat, salt, or sugar would be taxed at P10 per 100 grams or P10 per 100 milliliters, whichever applies. This could include confectioneries, snacks, desserts, and frozen treats. On the other hand, the proposal would raise the existing sweetened-beverage tax to P12 per liter, regardless of the type of sweetener used, while removing existing exemptions.
This is not a new idea dressed up for 2026. The National Tax Research Center first studied the idea years ago in a report titled “Feasibility of Imposing a Junk Food Tax in the Philippines.” Since then, the health rationale has only become harder to ignore: 57.1% of Filipino adults aged 20–59 were classified as overweight or obese in 2023, while diabetes mellitus ranked fifth among the country’s leading causes of death in 2024.
Revenue matters, too. Officials have floated using the proceeds to help fund the Universal Health Care Act, which has faced its own budget pressures. That adds another layer to the debate: the tax is being asked to do more than change what people buy. It could also help finance the healthcare system.
Will it actually address the issues at hand—or create new problems of its own?
Who Will Actually Feel This Tax
Here’s the part that tends to get lost in health statistics: this tax will not be felt evenly.
Lower-income Filipinos are, by basic economic logic, far more price-sensitive than high-income households. A P10-per-100g increase on a favorite snack matters more to a household budgeting its funds and income than to one that will barely notice the difference. Economists studying similar “sin tax” structures point out that this is somewhat by design: the goal is for the price signal to actually change behavior, and these price signals only work if someone feels them. The tax can let wealthier consumers sustain their cravings while paying a bit more, while lower-income consumers face real pressure to cut back because they have less room to absorb the cost.
This pressure shows up concretely at the level of sari-sari stores. Retailers have been vocal about how junk food and sweetened beverages can make up a significant part of their sales, especially in poorer barangays and provincial areas where these products are affordable, filling, and always in stock. Store owners warn that a tax this steep to actually change consumption habits is also steep enough to affect their revenue, in a business that already runs on thin margins.
The Case for the Tax: A Healthier Population
None of this means the tax is a bad idea, and it’s worth taking public health seriously on its own terms.
A modelling study estimated that a nutrient-based tax on unhealthy packaged foods could meaningfully reduce diet-related disease burden while generating substantial government revenue. The researchers described the strategy as potentially cost-effective for a country facing rising rates of diabetes, cardiovascular disease, and other diet-linked conditions. The same study estimated that a 20% tax on packaged foods high in sugar or sodium could reduce healthcare spending over a couple of decades while generating substantial new revenue. This echoes outcomes seen in other countries like Colombia, which introduced a similar tax on qualifying ultra-processed foods in stages, reaching a 20% rate in 2025 for products high in added sugar, sodium, or saturated fat.
There’s also a working precedent already in place. The Philippines introduced a tax on sweetened beverages back in 2018 as part of a broader tax reform package, and evidence shows that the tax raised prices and affected purchases—exactly the kind of behavior change the newer, broader junk food tax is hoping to replicate.
READ: Rising Fuel Costs Raises Prices of Healthy Diets
The Missing Piece: Healthy Alternatives Aren’t Cheap Either
A junk food tax assumes that people have somewhere better to redirect their spending. In the Philippines, that assumption hits a real problem: healthy alternatives are often not cheap, inconvenient, and not always available. Recent research from the Philippine Institute for Development Studies found that 48.1 million people in the country cannot afford a healthy diet. Research from PIDS has also pointed to a more structural cause: weak agricultural and transport infrastructure can keep nutritious foods comparatively expensive and inconsistently available. This helps explain why the average Filipino diet can rely heavily on processed or starchy food while falling short on produce. Although wet markets are common in many parts of the country, instant processed foods are still more friendly to the wallets of lower-income households.
Global research on diet costs backs this up directly: nutrient-rich foods such as fruits, vegetables and animal-source foods tend to cost considerably more than staple foods that provide calories at a lower price. This mismatch helps explain why cheap calories can be much easier to reach for than a balanced diet.
This is a key concern that this tax creates, even with the best of intentions. Faced with a tax on junk food, a household may keep buying the taxed products and simply spend a little more, reduce consumption, or shift toward another option. But if healthier alternatives already cost more, the price signal may feel less like a nudge and more like a squeeze. The cheaper, healthier option the policy is implicitly counting on often isn’t reliably there yet.
A Squeeze From Both Sides: Inflation’s Role
None of this is happening in a vacuum. Rising food prices can put healthy diets further out of reach, while the cost of transporting and distributing perishable foods can add to what consumers ultimately pay. Climate-related disruptions can add another layer of uncertainty to agricultural supply. Layer a new excise tax on top of an already strained household food budget, and the math gets tighter, not looser.
This is the part of the debate that a purely public-health framing tends to skip past. A tax designed to nudge behavior works cleanly in an economic model. In a household actually managing rising rice prices, unpredictable vegetable costs, and now a steeper price tag on the snacks that at least reliably fit the budget, the nudge can just as easily become a squeeze, one with very little slack left to absorb it.
Where Does This Leave Things?
None of this means the tax should be scrapped, and it doesn’t mean it’s guaranteed to work as designed either. The honest read is that a tax on unhealthy food is a demand-side lever pulling in a direction the supply side isn’t yet strong enough to fully support. Encouraging people to eat differently works best when eating differently is actually affordable and accessible, which in the Philippines right now, for a large share of the population, it still isn’t.
That’s less an argument against the tax than an argument for pairing it with something on the other side of the ledger: agricultural investment that brings produce prices down, subsidies that make nutrient-dense food more competitive with processed alternatives, or revenue from the tax itself explicitly earmarked to close that gap rather than only funding downstream healthcare costs. A tax changes the price signal. It doesn’t, by itself, guarantee that people can afford a healthier alternative.
The junk food tax debate isn’t really a question of whether unhealthy food should cost more. Most of the research says that, on its own, it probably should. The harder question is whether the country has built the cheaper, healthier off-ramp this kind of tax assumes exists, and right now, for a lot of Filipino households, that off-ramp isn’t fully there yet. A policy built on good intentions still needs to reckon with the price tag on the alternative it’s pushing people toward.
*Photo by Ahmed Hossam on Unsplash
References
Philippine Department of Finance and Department of Health. Proposal to Tax Junk Food and Raise Sweetened Beverage Excise Tax. 2023.
National Tax Research Center. Feasibility of Imposing a Junk Food Tax in the Philippines. National Tax Research Center.
Philippine Statistics Authority. 2024 Causes of Death in the Philippines. 2025.
Department of Science and Technology–Food and Nutrition Research Institute. 2023 National Nutrition Survey: Regional Estimates of Selected Indicators. 2024.
Saxena A, Koon AD, Curtis CJ, et al. Estimated health impact, cost, and cost-effectiveness of taxation on unhealthy packaged foods in the Philippines: a modelling study. The Lancet Public Health. 2025.
Huse O, Backholer K, Nguyen P, et al. A comparative analysis of the cost-utility of the Philippine tax on sweetened beverages as proposed and as implemented. The Lancet Regional Health – Western Pacific. 2023.
Philippine Institute for Development Studies. Is Food Supply Accessible, Affordable, and Stable? The State of Food Security in the Philippines. 2022.
Philippine Institute for Development Studies. Harvesting Insights: Assessment of Food Systems for Children in the Philippines. 2025.
Food and Agriculture Organization of the United Nations. The State of Food Security and Nutrition in the World / Cost and Affordability of a Healthy Diet. 2025.
