The government, private sector and industry stakeholders should unite to stop the illicit tobacco trade in the Philippines which escalated by 200 percent in the past four years, officials said.
“It is imperative for our government to adopt a holistic approach to this issue. We urge all stakeholders, public and private sector, to unite in our efforts and to further strengthen our strategies against illicit tobacco trade while supporting and empowering our local farmers,” Department of Agriculture (DA) Secretary Francisco Tiu Laurel said in a speech delivered by Undersecretary Roger Navarro during the 2nd International Tobacco Summit organized by the National Tobacco Administration (NTA).
Tiu Laurel said protecting the local tobacco industry is crucial for farmers’ livelihood. He acknowledged that while excise taxes are important for public health and revenue generation, they have had the unintended consequence of pushing consumers toward the illicit market.
Jericho Nograles, president of the Philippine Tobacco Institute, confirmed the rise in illicit tobacco trade, reflecting a broader regional trend. He said the share of illicit cigarettes in the Philippines surged from 5.4 percent in 2020 to 16.4 percent in 2024. He projected that by 2025, illicit products would account for nearly 19 percent of the market.
“Illicit trade is not just an industry challenge; it is a national and regional crisis It undermines public health, weakens government revenues, destabilizes legitimate businesses and fuels organized crime,” said Nograles.
He cited the significant price gap between legal and illegal tobacco products, the Philippines’ extensive coastline, and the presence of organized crime groups as contributing factors. Nograles said legal cigarettes in the Philippines cost an average of P170 per pack, while illicit products sell for as low as P40.
He said enforcement alone is insufficient and outlined several policy recommendations, including a temporary moratorium on excise tax increases, regional cooperation among ASEAN member states, and the implementation of track-and-trace systems.
Despite the challenges, the tobacco industry remains a key revenue source. From January to November 2024, tax collections from tobacco amounted to P128.98 billion, while vape products contributed P1.35 billion.
Frederick Go, head of the Office of the Special Assistant to the President for Investment and Economic Affairs, underscored the industry’s economic contributions. “Beyond tax contributions, the tobacco industry also provides livelihoods for approximately 2 million Filipinos,” he said in a speech read by Undersecretary Jose Guilas.
Go cited recent legislation aimed at strengthening the industry, including Republic Act No. 12022, the Anti-Agricultural Economic Sabotage Act.
Budget Secretary Amenah Pangandaman also commended the enactment of RA No. 12022. “Through this law, we will prevent the entry of smuggled tobacco, ensuring that correct duties and taxes are paid while imposing higher penalties,” she said in a recorded speech.
National Tobacco Administration (NTA) administrator Belinda Sanchez reinforced the need for a holistic strategy. “The increasing illicit trade in tobacco is a growing concern, undermining our efforts and threatening the livelihoods of countless individuals,” she said.
“We need a holistic approach to tackle this problem, one that addresses not just the symptoms but also the root causes,” said Pangandaman.