Smoking rate climbed in the Philippines between 2021 and 2023 amid the rampant illicit trade of cigarettes, according to industry data.
Senator Win Gatchalian said in a Senate Committee on Ways and Means hearing that despite the increase in smoking rate, the government’s excise tax revenue collection fell during the period as illicit trade thrived.
“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.
Gatchalian said tobacco excise tax revenue slid from P176.49 billion in 2021 to P134.91 billion in 2023 which could be attributed to smuggling.
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.
“If no one is jailed, no one is afraid. If no one is afraid, the illegal activity will continue. And the profit margin can be as high as three times or even four times. So the conviction is very important,” Gatchalian said.
“We can hold hearings here every day, but if we don’t put people in jail, nothing will happen,” 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 342 million pesos in 2024, while leakages from vapor products reached 64 million pesos.
Philippine Tobacco Institute president Jericho Nograles said the government is losing 52 billion pesos 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 1.71 billion pesos, their seizures increased to 318 in 2024 with an estimated value of 9.19 billion pesos.
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 the BIR also conducted visits to retailers of vapor products.
