MANILA—The Philippines could save up to $687 million annually if just 10 percent of its 14.4 million smokers switch to tobacco harm reduction products, a new study says.
The paper by Christopher James Cabuay, an associate professor at De La Salle University, estimated that tobacco-related illnesses cost the Philippine economy $9.8 billion, or about 2.48 percent of its gross domestic product, in 2019.
The study, published in the DLSU Business and Economics Review in early 2025, noted that the largest portion of this economic burden comes from lost productivity due to disability and premature deaths, not from hospital bills.
These deaths are caused by smoking-related diseases such as chronic obstructive pulmonary disease, ischemic heart disease, and stroke.
“From an economic standpoint, these are potentially productive people lost,” Cabuay said in a Wednesday briefing.
“The cost of tobacco-related illness represents an inefficiency, draining valuable resources that could have been directed to more productive activities,” he said.
The study projected that a shift of 1.44 million people—10 percent of the country’s smokers—to safer alternatives could lower health costs by 0.18 percent of GDP, or roughly $687 million.
A larger shift, with half of the smoking population (7.2 million people) making the change, could deliver savings of up to $3.4 billion a year, he said.
Cabuay said the cost calculations cover both direct and indirect losses, including medical expenses, caregiving and medicine, as well as reduced economic output from illness, absenteeism, and premature death. “The indirect costs are actually larger,” he said.
He noted that smoking disproportionately affects working-age Filipinos, eroding productivity at the prime of their careers.
Cabuay also warned that these potential gains are being undermined as smoking prevalence, which has been steadily declining, is beginning to rise again. He attributed this largely to the spread of illicit tobacco products, which are priced far lower than regulated cigarettes.
“Formal sources comply with government regulations and therefore charge higher prices,” he said.
“Consumers, of course, go where it’s cheaper. That trend has been documented, though whether illicit trade is the definitive cause still requires more rigorous study,” said Cabuay.
Cabuay said he is considering further research into how the illicit tobacco trade influences consumer behavior, its contribution to rising smoking rates and the resulting economic burden.
