Tobacco Source: BOC file photo

PH reverses gains vs smoking amid rampant illicit trade

January 22, 2025 People's Journal 167 views

THE Philippines reversed its gains versus smoking as illicit trade continues despite the government’s intensified campaign to stop smuggling.

In a Senate Committee on Ways and Means hearing, Senator Win Gatchalian, chairman of the panel, expressed concern over the rise in smoking prevalence on the back of rising illicit trade.

“This is a cause of concern that has triggered this hearing. We saw a reversal [in smoking prevalence] after 2021. For six years, we reduced smoking prevalence. But in two years, we’re back to square one,” Gatchalian said.

He said that despite the rise in smoking prevalence, the government’s excise tax revenue collection fell during the period, which could be explained by growing illicit trade.

Gatchalian said that based on data, smoking prevalence in the Philippines rose between 2021 and 2023 amid the rampant illicit trade of cigarettes.

He said that during the same period, tobacco excise tax collection slipped from P176.49 billion in 2021 to P134.91 billion in 2023.

He cited data from Kantar and Euromonitor, which revealed that illicit cigarettes accounted for 16 percent of cigarettes sold in the Philippines.

“Illicit trade will not do us any good. Illicit traders do not pay taxes to government. At the same time it also promotes smoking to our constituents. Those illicit cigarettes are accessible to anyone, and any age,” said Gatchalian.

Gatchalian said that based on the report of the Food and Nutrition Research Institute (FNRI), the country’s smoking prevalence increased from 14.6 percent in 2021 to 18.9 percent in 2023.

He noted the consistency of the FNRI, Kantar and Euromonitor data on illicit trade, noting that the trend is there with the highest prevalence in Southern Mindanao.

The senator urged government agencies to step up enforcement efforts and pursue conviction of those involved in illegal tobacco trade.

The Bureau of Customs and the Bureau of Internal Revenue reported that they filed 93 cases against perpetrators since 2017, but only one case resulted in a conviction.

“Kung walang nakukulong, walang natatakot. Kung walang natatakot, tuloy tuloy lang ang ligaya. And the profit margin can be as high as three times or even four times. So the conviction is very important,” Gatchalian said.

“Pwede tayong mag hearing dito araw-araw pero if we don’t put people in jail walang mangyayari talaga,” Gatchalian said.

He also addressed representatives from Lazada and Shopee during the committee probe where he highlighted the illicit trade of tobacco and vape products on online platforms.

“What are you doing to prevent this from happening? You have to give us a better solution in order to prevent this type of product from being sold on your platforms,” Gatchalian said.

“Online platforms should do a much better job at filtering these illicit products,” he said, stressing that these platforms are the first line of defense against illicit trade.

Based on data presented during an earlier Senate Ways and Means committee hearing, tax leakages from illegal cigarettes amounted to P342 million in 2024, while leakages from vapor products reached P64 million.

Philippine Tobacco Institute (PTI) president Jericho Nograles said the government is losing P52 billion from the smuggling of vape and tobacco products annually.

BOC assistant commissioner Vincent Maronilla said the agency stepped up its campaign against tobacco smuggling. He said from 131 seizures in 2021 amounting to P1.71 billion, their seizures increased to 318 in 2024 with estimated value of P9.19 billion.

The BIR said it conducted 141 enforcement activities against illegal vapor products from January to September 2024. This significantly increased to 847 from October to November of the same year because BIR also conducted visitation of retailers of vapor products.

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