The EU-ASEAN Business Council warned that the Philippines lost an estimated P141 billion in government revenues from the illicit tobacco trade over the past two years, amid a sharp rise in illegal e-vape sales across Southeast Asia.
In a joint report with Euromonitor International released Monday, the group said the Philippines recorded the highest illicit e-vape incidence among assessed ASEAN countries, with 86 percent of e-vapes sold in the country considered illegal.
The report estimated that illicit e-vape sales alone caused government revenue losses of P23 billion between 2024 and 2025 and generated P127 billion in gains for illicit operators. Across the ASEAN-6, the illicit tobacco trade resulted in a total of $13 billion in lost revenues over the same period.
The Philippines tied with Malaysia as the second-highest contributor to revenue losses in the region at $2.5 billion, behind Indonesia’s $5.6 billion.
“The scale of illicit trade across ASEAN is often sorely underestimated and, more worryingly, growing at an alarming pace. If left unchecked, illicit trade could jeopardize ASEAN’s economic future as a global growth engine,” said EU-ABC executive director Chris Humphrey.
The report said illicit cigarette sales in ASEAN grew by 14 percent in 2025, while illicit e-vape sales rose by 24 percent. It projected illicit tobacco incidence across the ASEAN-6 to increase from 24 percent in 2025 to 28 percent by 2028.
The Philippines recorded the highest loss in 2025 at P12.1 billion from illicit vapes and the second-highest loss of P61.6 billion from illicit cigarettes, up 9.8 percent from 2024, according to Euromonitor.
According to the study, illicit cigarettes are largely produced in Indonesia and Cambodia, with additional supply coming from China, while Malaysia, Singapore, and Vietnam serve as major distribution hubs.
The report identified the Subic Bay Freeport Zone among regional free-trade zones vulnerable to smuggling activities, alongside ports in Malaysia, Thailand, and Indonesia.
It also flagged online platforms, encrypted messaging applications, and social media marketplaces as key channels facilitating illicit tobacco sales in the region.
“The Philippines is one of the most exposed markets and is a priority containment market for e-vapers and an elevated-risk market for cigarettes,” said Euromonitor head of consulting for APAC Firdaus Muhammad.
Humphrey said illicit trade weakens government revenues that could otherwise fund infrastructure, healthcare, education, and green investments, while also undermining supply chain integrity and investor confidence.
The council urged ASEAN governments to strengthen regional coordination, improve customs enforcement, adopt digital and artificial intelligence tools for monitoring, and enhance track-and-trace systems to combat illicit trade flows.
 to illicit tobacco over two years as illegal e-vape sales surged, according to a joint report by EU-ABC and Euromonitor International.){kind=link}