Public health nutritionist Kioh C. Monato traces how the Philippines' 2018 Sweetened Beverage Tax (P6/L, P12/L for high-fructose corn syrup) lost effectiveness without any change to the underlying law. Two mechanisms did the damage independently. First, inflation: the flat peso rate set in 2018 buys less deterrence every year it isn't adjusted, so a tax that once made a real dent in price now barely registers. Second, the industry routed around the exemptions baked into the original design — coffee-based drinks and coconut sap/stevia-sweetened beverages were excluded from the outset, and manufacturers have since shifted to smaller "sakto"/"solo" bottle formats to keep per-unit prices low. Sales dipped right after the 2018 tax and during the pandemic, then resumed climbing. Monato's proposed fix addresses both decay paths at once rather than picking one: index the rate to inflation, close the exclusions that no longer track the evidence (a 2023 cost-utility study found the enacted design, with its carve-outs, delivers less health benefit than the flat-rate version originally proposed in the corresponding house bill), and move toward a tiered structure where tax scales with sugar content instead of a flat per-liter charge. The general pattern applies to any Pigouvian tax, sin tax, or fee designed to discourage a behavior through price: passing the law is necessary but not sufficient. A flat nominal rate is a wasting asset — it silently loses real value to inflation, and any exemption or loophole in the original design becomes a permanent target for the taxed industry's product engineers. A policy that isn't revisited on a schedule doesn't stay in place; it decays into whatever loopholes and inflation leave behind. ## Source - [[20260805 The Bitter Truth - The Philippine Sweetened Beverage Tax Needs an Upsize]] — BusinessWorld, July 20, 2025 — https://www.bworldonline.com/opinion/2025/07/21/686281/the-bitter-truth-the-philippine-sweetened-beverage-tax-needs-an-upsize/