The illicit cigarette trade remains a major national concern, significantly impacting farmers’ livelihoods and the economy.
President Ferdinand Marcos Jr. instructed the Bureau of Customs (BOC), the Bureau of Internal Revenue (BIR) and the Department of Trade and Industry to ramp up their efforts in curbing the smuggling of tobacco and vape products to protect the country’s tobacco industry and its farmers.
A study titled “Smuggling of Cigarettes and Other Tobacco Products and Its Effects on Tobacco Producers in the Philippines” underscored the importance of collaboration with agencies including the National Tobacco Administration and the Department of Trade and Industry and strict enforcement of anti-smuggling laws as crucial measures in identifying opportunities for tobacco-based industries and upholding industry integrity, ultimately bolstering farmers’ incomes, and safeguarding against illicit trade.
The study revealed that the local tobacco industry incurred substantial losses from smuggling, totaling 41,180,676 kg valued at $224,586,095 from 2018 to 2022.
A study published by the University of Asia and the Pacific, “Illicit Cigarette Trade in the Philippines: Economic and Social Impacts of Weak Regulatory Enforcement,” also reported that illicit trade from 2018 to 2022 caused the GDP to decline by P378.9 billion, leading to a drop of about P592.1 billion in domestic output.
Farmers also endure income losses due to the decrease in tobacco production and land area for cultivation caused by the decrease in land area from 632,000 hectares to 289,000 hectares.
The illicit trade in tobacco products increases the local supply of cheap tobacco entering the market without tax.
“The academe should spearhead research on tobacco value-addition and technical efficiency studies to assess how farmers’ incomes can be improved given their limited resources,” said agricultural economist and University of the Philippines Los Baños’ assistant professor Dr. Julieta Delos Reyes.
She recommends conducting technical efficiency studies to assess how farmers’ incomes can be improved given their limited resources.
“These measures will not only prevent further smuggling within the tobacco industry but also ensure economic stability and social welfare in tobacco farming communities, therefore contributing to improving the country’s economy,” said Delos Reyes.