Tobacco Farmers Rally Behind Bill to Combat Illicit Trade

Strategic Insights -

The Philippine Tobacco Growers Association (PTGA) has come out in support of House Bill 11360, aimed at curbing the rampant illicit trade of cigarettes and vapor products. The bill, authored by Nueva Ecija Rep. Mikaela Suansing, seeks to impose a structured tax increase on tobacco products while establishing the Inter-Agency Tobacco Illicit Trade Council. The council will be responsible for strengthening enforcement measures and cracking down on the smuggling of cigarettes and vape products.

Key Takeaways:

  • The Philippine Tobacco Growers Association (PTGA) has backed House Bill 11360, which aims to combat the illicit trade of cigarettes and vapor products that is crippling the livelihoods of tobacco farmers.
  • The bill proposes to impose a structured tax increase on tobacco products and establish the Inter-Agency Tobacco Illicit Trade Council to strengthen enforcement measures and crack down on smuggling.
  • The council will be chaired by the Department of Finance and will be responsible for preventing further losses in excise tax collection.
  • The proposed legislation could lead to a P66 billion revenue recovery over five years and help reduce smoking rates.
  • Tobacco farmers have seen a decline in demand for locally produced tobacco due to widespread smuggling, with 80 percent of production being exported and even this market being affected.
  • Illicit tobacco sales have reduced government revenue, limited resources for essential public services, and linked to organized crimes, further threatening national security.
  • Over 430,000 farmers, farmworkers, and their families are being affected by counterfeit and smuggled tobacco products.
  • The government has suffered substantial revenue losses due to illicit tobacco trade, with collections from tobacco excise tax dropping from P176 billion in 2021 to only P134 billion in 2024.
  • The adult smoking rate in the Philippines has climbed from 18.5 percent in 2021 to 23.2 percent in 2023, linked to the increased availability of cheap, illegal tobacco products.

Statistics:

  • 40,000: The number of tobacco farmers in the country who are struggling to survive due to the unchecked entry of untaxed and smuggled tobacco products.
  • 80 percent: The proportion of tobacco production that is exported, which is also being affected by the rise of illegal trade within the country.
  • P66 billion: The proposed revenue recovery over five years from the implementation of the bill.
  • P134 billion: The collections from tobacco excise tax in 2024, which fell short of the agency's P185 billion target by P52 billion.
  • 23.2 percent: The adult smoking rate in the Philippines in 2023, a rise from 18.5 percent in 2021.
  • 430,000: The number of farmers, farmworkers, and their families affected by counterfeit and smuggled tobacco products.

Sources:

  • Philippine Tobacco Growers Association (PTGA)
  • Nueva Ecija Rep. Mikaela Suansing
  • Department of Finance
  • Bureau of Internal Revenue (BIR)