Government revenues collected from sin products jumped close to 12 percent last year as cigarette manufacturers and liquor makers advanced their withdrawal of inventories from warehouses to avoid higher excise tax rates this year.

Data from the Bureau of Internal Revenue (BIR) showed that excise tax collected from cigarette and liquor makers amounted to P47.1 billion in 2008 or P4.9 billion more than the P42.2 billion collected in 2007.

Excise tax paid by cigarette manufacturers to the BIR increased by 17.9 percent to P27.35 billion from P23.19 billion as the volume of withdrawals went up by 14.37 percent to 4.727 million packs from 4.133 million packs.

On the other hand, excise tax collected from liquor makers inched up by 3.9 percent to P15.63 billion in 2008 from P15.26 billion in 2007 as the volume of withdrawals of fermented liquor rose by 2.85 percent while that of distilled spirits increased by 10.4 percent.

Major cigarette producers include Fortune Tobacco of taipan Lucio Tan, Philip Morris Philippines Manufacturing Inc., La Suerte Cigar & Cigarette Factory while alcohol producers include Ginebra San Miguel, Tanduay Distillers, Consolidated Distillers of the Far East, Diageo Philippines, Distileria Bago, and others.

BIR officials said it has been the practice of manufacturers to frontload the withdrawals of tobacco and alcohol products from their warehouses months before the increase in the excise tax rates is implemented as mandated by Republic Act 9334 or the indexation of sin taxes.

Local manufacturers also frontloaded their withdrawals late 2006 to take advantage of lower rates that resulted to a decline in the volume of removals of tobacco products in 2007.

The law signed by President Gloria Macapagal Arroyo in December of 2004 mandates that excise tax slapped on sin products would increase every two years until the increase reaches 20 percent by 2011.

This year, the excise tax on cigarettes and alcohol products were increased by eight percent.

Finance Secretary Margarito Teves has been pushing for the rationalization of the existing sin tax law to raise as much as P112 billion worth of extra revenues for the national coffers to bankroll infrastructure projects and social services.