Department of the Interior and Local Government (DILG) Secretary Juanito Victor Remulla on Thursday, February 5, said law enforcement authorities are investigating two politicians from northern Luzon for their alleged involvement in the illegal manufacture of undocumented cigarettes.
Remulla made the announcement during a press briefing at a warehouse in Barangay Panipuan, Mexico, Pampanga, where authorities found cigarettes, cigarette-making machines, and fake tax stamps.
“We suspect there are two northern Luzon politicians behind it. They are the masterminds, they are the financiers,” the interior secretary said.The Philippine National Police (PNP) is also validating intelligence reports indicating that around 10 other illegal cigarette manufacturing sites may be operating across the country.
“This is an international system. Our intelligence from Singapore and Indonesia shows that this is being done here, so it is larger than you think,” Remulla said.
Authorities earlier seized truckloads of illicit tobacco products in Valenzuela in operations led by the Highway Patrol Group–National Capital Region and the Bureau of Internal Revenue.
Data from authorities showed the government lost around P30 billion in 2024 due to illegal tobacco sales, revenues intended to fund public healthcare programs.
“This is economic sabotage in the Philippines, so it must be stopped,” Remulla said.
In a joint operation, the PNP and the Bureau of Customs raided an illicit cigarette factory in a warehouse in Barangay Panipuan, resulting in the arrest of six Chinese nationals and 63 Filipinos, and the recovery of an estimated P400 million worth of smuggled cigarettes, Remulla said.
“These series of successful anti-smuggling operations are proof of the PNP’s commitment not only to maintaining peace and order but also to protecting our economy and national interest,” PNP chief Gen. Jose Melencio Nartatez Jr. said.
“Let these operations serve as a stern warning to all smugglers that the PNP will not allow you to circumvent and disregard our laws to enrich yourselves at the expense of the Filipino people,” he added.
Remulla said the six Chinese suspects were accused of forcing 65 Filipinos to work in inhumane conditions at the factory.
“They were rescued. They are victims of human trafficking. We have not seen any lease contracts from the Chinese manufacturers yet, so the owner of the land and the incorporators are also liable,” he said.
The operators allegedly recruited 65 Filipinos—54 men and 11 women—with the promise of a P15,000 monthly salary, which was never paid, Remulla added.
“The conditions of their barracks are almost inhuman. That is involuntary servitude,” he said.
Remulla, together with Gen. Nartatez, Central Luzon police chief Brig. Gen. Rogelio Peñones Jr., and Bureau of Customs officials, conducted a walkthrough of the workers’ barracks, which were located in a grassy area and made of wooden planks with corrugated metal roofing.
“There are no windows. There is only one light and no electric fan. They are sleeping on makeshift beds,” Remulla said.
He also pointed to an area of the lot where rejected cigarettes were disposed of by burning.
Remulla said the rescued workers are now receiving proper assistance.
Authorities confiscated three cigarette manufacturing machines and two cigarette packing machines capable of producing an estimated P150 million worth of cigarettes per day, or about P4.5 billion per month.
According to Remulla, the first Chinese operator arrived in the Philippines as a tourist in March last year to set up operations in Pampanga, followed by five others in December. Operations reportedly began in January.
Remulla identified the lessor of the factory lot as Samyoung Global Corporation, whose incorporators include three Filipinos and two Koreans.
“We are looking deeper into the entire structure of this company. We suspect there are 10 other manufacturing sites across the country. We have intelligence and are gradually approaching it,” he said.
Criminal Investigation and Detection Group Director Maj. Gen. Robert Alexander Morico II said one Filipino incorporator has already been subpoenaed, with others to follow.
Morico said the six Chinese suspects underwent inquest proceedings for violation of Republic Act 9208 or the Anti-Trafficking in Persons Act before the National Prosecution Service on January 30, with preliminary investigation set on February 9.
Asked where the undocumented cigarettes were distributed, Remulla said authorities have already identified the recipient stores, which will be subjected to follow-up operations.
He said the investigation is ongoing to determine possible involvement of local officials and foreign financiers.
“This is an international system. Our intelligence shows the cigarettes are manufactured here, and it is larger than we think. When the excise tax was imposed, the natural consequence was for them to try to avoid it,” Remulla said.
He added that authorities are also considering filing cases for violations of Republic Act 12022 or the Anti-Agricultural Smuggling Act, as well as environmental laws.
With the discovery of the Pampanga factory, Remulla said authorities have confiscated a total of P10 billion worth of undocumented cigarettes nationwide in recent weeks.
For his part, Nartatez said the PNP’s intensified campaign has begun to disrupt smuggling syndicates following a series of high-impact operations that resulted in the seizure of multi-billion-peso worth of smuggled and counterfeit goods.
