Lawmakers in the Philippines are to endorse a lesser version of the proposed "sin tax" bill. A congressman said yesterday that the tax increase on cigarettes and liquor will be lower than originally planned, to avoid an extended debate in the country's Congress.

The Department of Finance was pushing for a 30% hike next year in tobacco and alcohol tax rates, and indexing their future to inflation. The increase was expected to raise PHP14 bln a year, to help bridge the fiscal deficit and balance the budget in six years.

But the version passed by the House of Representatives' ways and means committee, which will still be debated in Congress, proposes a 20% increase in 2005 and 3% more in 2006 and in 2007. It is expected to raise PHP25.5 bln over three years.

After the bill gets through the House of Representatives, it will be sent to the Senate, which could either adopt the measure or pass its own version. A final version of the bill will have to be determined by a joint committee of the House and the Senate.