Philippines warns cigarette makers over tax debate

MANILA (Reuters) - The Philippines warned cigarette makers on Thursday they could face tough measures to reduce smoking-related deaths if they fight a proposed tobacco tax increase, a day after Australia's top court upheld the world's toughest laws on tobacco sales.

The Philippines, with one of Asia's highest rates of smokers, is debating legislation that would increase taxes on cigarettes and alcohol, making them potentially too costly for the poor.

"If the number of people who die from cigarette-related deaths continues to increase, the government may even do more drastic measures," Health Secretary Enrique Ona told Reuters on the sidelines of a Senate committee hearing on the bill.

He did not specify what further anti-tobacco measures the Philippines could take.

But he spoke a day after Australia's highest court upheld its government's new anti-tobacco marketing laws that will ban logos on cigarette packs and will likely give other countries more confidence to push similar measures.

"This can be a warning to our tobacco industry that they should work closely with us and with this proposal we are presenting," he said of Australia's decision.

About 18 percent of the Philippines' nearly 100 million people are classified as regular smokers. On average, 50,000 people die a year from smoking-related illnesses, according to a 2008 government-funded National Nutrition and Health Survey.

The lower house of Congress in the Philippines has approved its version of the bill. The upper house is finalizing its version. Both need to be reconciled and are expected to be submitted to the president and signed into law by year-end.

"This is a bill that will need to be passed for a healthier nation, a longer life expectancy for many people and a chance to rapidly modernize our health system," said Ona.

The annual cost of the four leading smoking-related diseases in the Philippines is estimated at 177 billion pesos ($4.2 billion), Ona said. The tobacco industry paid close to 40 billion pesos ($946 million) in taxes in 2011. ($1 = 42.2800 pesos)

(Editing by Jason Szep and Robert Birsel)