The Department of Finance welcomes a Senate proposal breaking down the campaign to reform the excise structure on cigarettes and liquor into a liquor-alone pursuit to facilitate its passage in the legislature.

Liquor and cigarette excise taxes have always been pursued together, but strong opposition among cigarette manufacturers and their allies has forced Senate ways and means chairman Panfilo Lacson to split the endeavor, official sources said on Friday.

The split approach, Finance Under­secretary Gil Beltran said, disappointed Finance Secretary Margarito Teves, who was looking forward to a unitary approach to excise tax on cigarettes and liquor to help boost accelerated spending for infrastructure and delivery of social services this year.

“But this is better than nothing,” Beltran told reporters.

Under Lacson’s plan, reforming the excise tax on alcohol will be pursued separately from cigarette and tobacco products, whose legislative supporters have put up strong resistance that forced the cancellation of deliberations in both houses of Congress.

A basic argument against the proposed tax is that it will kill local tobacco, as it imposes a uniform P14 tax on cigarettes—both the lower-priced local products and the premium imported brands that are priced higher, and therefore have more elbow room for taxes.

Alcohol manufacturers have proven more receptive to Lacson’s plan to impose excise taxes that generate between P89 billion and P112 billion in the first three years; and between P60 billion to P70 billion every year thereafter, sources said.

“Unlike the proposed excise tax structure on cigarettes, it will be easier to pass a bill on alcohol products as there are no strong objections,” one source said.

Secretary Teves counts on three supporters from among the members of the House of Representatives, who each filed separate bills proposing to adopt a unitary or single rate excise tax for both alcohol and cigarette products.

These were measures filed by Negros Oriental Reps. Jocelyn Sy-Limkaichong, Pryde Henry Teves and George Arnaiz and on top of at least five other bills filed by different colleagues much earlier.

He needs the money to help him limit the year’s deficit to within 2.5 percent of the gross domestic product roughly equal to P199 billion, and stay the course towards a balanced budget at some point in the near term.

The ongoing global economic downturn previously forced Teves and the economic managers to abandon balancing the nation’s budget by 2010.