Leonardo Montemayor, former Agriculture secretary and FFF board chairman
Illicit trade hurts livelihood of over 40,000 Filipino tobacco farmers
MORE than 40,000 Filipino farmers are suffering because of the widespread illicit tobacco trade fueled by high excise taxes.
“These taxes disproportionately affect the more than 40,000 tobacco farmers nationwide because we cannot compete with cheaper illicit products that flood our markets,” the Philippine Tobacco Growers Association said in a statement.
The PTGA said legitimate farmers are displaced by the influx of smuggled tobacco products that do not use locally-grown tobacco leaves and do not pay taxes.
“Despite our commitment to producing quality crops and goods, we find ourselves struggling under the burden of escalating taxes imposed by the government,” the association said.
PTGA president Saturnino Distor said the prevalence of smuggled cigarettes has supplanted locally produced tobacco, which also led to lower government revenue collection.
“These imported, smuggled cigarettes do not use local tobacco,” he said.
Distor said 80 percent of their sales currently go to the export market, but even this has been affected by the surge of illicit tobacco in the local market.
“Our earnings would be better if only legitimate, local cigarettes were sold in the market,” Distor said, adding that the local market is no longer a reliable source of income for farmers.
“We need to reduce the advantage enjoyed by smuggled cigarettes over our local brands,” Distor said.
The Federation of Free Farmers (FFF) called for the inclusion of tobacco farmers in government agencies and decision-making bodies to protect their livelihoods and strengthen anti-smuggling initiatives.
Leonardo Montemayor, a former Agriculture secretary and FFF board chairman, said farmers are key stakeholders in solving the problem.
“It is vitally important for real solution-seekers to consider these matters from a ‘worm’s eye view,'” he said, calling for the early appointment of farmers to the Anti-Agricultural Economic Sabotage Council.
Belinda Sanchez, administrator of the National Tobacco Administration, outlined the severe consequences of illegal tobacco sales on government revenue and national security during the recent 2nd International Tobacco Agricultural Summit in Manila.
“The continuing proliferation of illegal tobacco sales in the local market is causing a decline in government revenue,” Sanchez said.
“This reduction in funds limits the resources available for essential public services, particularly universal health care. Moreover, proceeds from illegal tobacco sales are often linked to organized crimes, further threatening national security,” she said.
The Bureau of Internal Revenue collected P134 billion in tobacco excise tax in 2024, short of its P185 billion target for the year.
The shortage impacts the funding of crucial government programs, including healthcare services that rely on excise tax collections from tobacco products.
Apart from affecting public funds, the illicit tobacco trade also takes a toll on the country’s 2.2 million Filipinos, who rely on the tobacco industry for their livelihoods.
Sanchez said more than 430,000 farmers, farm workers, and their families are directly affected by the growing prevalence of smuggled and counterfeit tobacco products.
Sanchez said to address the issue, there is a need for a comprehensive and coordinated response.
“There is an urgent need for a multi-faceted approach against illicit trade that includes strengthening national policies, enhancing regional cooperation, improving enforcement mechanisms, and increasing public awareness,” she said.
