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Tag: Philippines

  • Philippines Cracking Down on Illegal Cigarettes, Criminals

    Philippines Cracking Down on Illegal Cigarettes, Criminals

    The Bureau of Internal Revenue (BIR) in the Philippines filed tax evasion charges totaling nearly ₱797 million ($14.3 million) against individuals involved in the large-scale illegal cigarette trade, intensifying its crackdown on illicit tobacco and vape operations. BIR Commissioner Romeo Lumagui Jr. announced that the charges stemmed from two recent raids.

    In Valenzuela City, authorities seized 600 master cases of untaxed cigarettes from a warehouse, with estimated tax liabilities of ₱200.7 million ($3.6 million). The lessee of the facility now faces criminal charges.

    A separate raid in San Rafael, Bulacan, uncovered an illegal cigarette factory allegedly operated by a Chinese national. The BIR recovered 7,884 master cases of illicit cigarettes and manufacturing equipment, worth ₱596.2 million ($10.7 million). The suspect also faces human trafficking charges after 155 workers were rescued from the facility.

    In a third similar bust, the National Bureau of Investigation (NBI) and the Department of Trade and Industry (DTI) arrested five individuals in Sta. Cruz, Manila, for allegedly selling unregistered vape products online. More than 25,000 vape units worth ₱8.16 million ($147,000) were confiscated in the joint operation, following test-buy and surveillance efforts. The suspects face charges for violating trade and consumer protection laws.

  • CAPHRA Urges Philippines Leaders to Reform Policies 

    CAPHRA Urges Philippines Leaders to Reform Policies 

    The Coalition of Asia Pacific Tobacco Harm Reduction Advocates (CAPHRA) said it acknowledges Philippines President Ferdinand R. Marcos Jr.’s decision to retain Dr. Teodoro Herbosa as Secretary of Health but called for urgent reforms to align the Department of Health’s (DOH) policies with global evidence on tobacco harm reduction. CAPHRA argued leadership must now prioritize science over ideology to address the Philippines’ stalled progress in reducing smoking-related deaths. 

    “While we respect the President’s decision, it is deeply concerning that the DOH continues to ignore the role of safer nicotine products in saving lives,” said Clarisse Yvette P. Virgino, CAPHRA’s Philippine Representative. “Secretary Herbosa’s reappointment must mark a turning point—a commitment to evidence-based strategies, not continued reliance on outdated prohibitionist policies.” 

    CAPHRA said that under Herbosa’s tenure, the Philippines has maintained regressive vaping regulations despite global precedents. It pointed to the UK’s National Health Service as an example, attributing its record-low 6% smoking rate to regulated vaping access, while Australia’s pharmacy-only model has fueled a thriving black market without reducing smoking rates. 

    “The DOH’s refusal to distinguish between deadly combustible tobacco and safer alternatives like vaping perpetuates needless deaths,” Virgino said. “Over 60% of Filipino smokers still wrongly believe nicotine causes cancer—a myth the DOH has done little to correct. 

    “The DOH’s current approach fails the ‘pub test.’ How can we claim progress when 16 million Filipinos still smoke and illicit trade thrives? Secretary Herbosa must choose: Will he defend outdated dogma, or embrace innovation that saves lives?” 

  • PMFTC Eyes Double-Digit Growth for IQOS in the Philippines

    PMFTC Eyes Double-Digit Growth for IQOS in the Philippines

    PMFTC Inc., the Philippine affiliate of Philip Morris International (PMI), is targeting double-digit growth this year for its smoke-free product, IQOS, as it pushes to expand its market in the country.

    In an interview, PMFTC President Gijs de Best said the Philippines now has around 150,000 IQOS users since the product’s launch in 2020. “People don’t understand what the problem is related to smoking because in the Philippines, 60% of people believe that nicotine is the most harmful ingredient, which it is not,” he said. “It’s the burning that is causing the issue. Simply, when you use a cigarette, once it is lit, harmful chemicals are released. What our technology is all about is heating, not burning.”

    Because it was launched in the market during the COVID-19 pandemic, IQOS gained traction mainly through word of mouth. Now, PMFTC aims to accelerate growth by increasing education around the benefits of heated tobacco. To support its expansion, PMI inaugurated a ₱8.8-billion ($150 million) manufacturing plant in Tanauan, Batangas last year to produce IQOS and other smoke-free products locally. The Philippines is one of 96 global markets for IQOS, with Indonesia currently being the largest in the region.

  • $730K Worth of Smuggled Indonesian Cigarettes Seized in Philippines

    $730K Worth of Smuggled Indonesian Cigarettes Seized in Philippines

    Authorities in the Philippines intercepted a major smuggling attempt involving P43 million ($731,000) worth of Indonesian cigarettes last week off the coast of Zamboanga City, officials confirmed. Police reported two outrigger-type pump boats carrying 749 boxes of imported cigarettes were intercepted on June 18, roughly two miles from Santa Cruz Island. The six crew members, all from Sulu province, were taken into custody.

    The seized contraband was turned over to the Bureau of Customs Region 9 for proper disposition. Over the past eight months, PRO-9 units have confiscated more than 10 tons of Indonesian-branded cigarettes in multiple operations across Zamboanga Peninsula and nearby cities, including Dapitan, Dipolog, and Pagadian.

  • Philippines Planning Track-and-Trace System for Consumer Use

    Philippines Planning Track-and-Trace System for Consumer Use

    The Bureau of Internal Revenue (BIR) in the Philippines is set to roll out a digital track-and-trace system next year that will enable the public to verify the legitimacy of cigarette and vape products using QR codes, BIR Commissioner Romeo Lumagui Jr. said.

    The new system, being developed through a public-private partnership, will allow consumers to scan QR codes on product packaging using their mobile phones. The scanned information will link to a secure website providing detailed data on product origin, legitimacy, and tax compliance.

    Currently, the BIR uses its Internal Revenue Stamp Integrated System exclusively, which only government devices can verify. The planned QR tracker expands verification capabilities to the public, helping expose illicit cigarette and vape products and address loopholes such as fake export claims used to evade excise taxes.

    The rollout faced delays due to procurement and budget concerns, requiring approval from the Department of Economy, Planning and Development (formerly NEDA) and the Department of Finance. A feasibility study and revised terms of reference are currently under review.

  • Philippines Tobacco Trading Still Strong Despite Start of Rainy Season

    Philippines Tobacco Trading Still Strong Despite Start of Rainy Season

    The Philippines’ National Tobacco Administration (NTA) announced that tobacco trading operations across the nation are continuing uninterrupted despite the start of the rainy season in June. Dr. Giovanni Palabay, NTA–La Union Manager, confirmed that flue-cured Virginia tobacco trading centers in Ilocos will remain open until June 30, with centers including Universal Leaf Philippines, Inc. (ULPI), Trans Manila, Inc., and Continental Leaf Tobacco Philippines, Inc. operational.

    “If there is more tobacco available beyond June 30, NTA can coordinate for continued accommodation by the trading centers,” said Palabay. Top prices for high-quality Virginia tobacco have reached P130 ($2.34) per kilo.

    There are 59,242 registered tobacco farmers cultivating over 32,500 hectares nationwide. NTA Administrator and CEO Belinda Sanchez said farmers are expected to earn more this season, as trading prices are currently above the government-set floor prices.

    Burley and native tobacco trading will continue in Ilocos, Cagayan Valley, Central Luzon, and the Cordillera Administrative Region through August 31, with peak prices of P118 ($2.12) for Burley and P175 ($3.15) for native Batek tobacco per kilo.

  • JTI Philippines Sees 23% Growth in Nicotine Pouches

    JTI Philippines Sees 23% Growth in Nicotine Pouches

    According to JTI, Nordic Spirit, the first nicotine pouch brand in the Philippines, is enjoying 23% monthly growth across the country. At a recent briefing in JTI’s office in Stockholm, Sweden, that included visiting journalists from the Philippines, Karin Tan, JTI’s director of reduced-risk products, said the product’s growth has been robust since it was introduced in May 2023.

    “There is actually traction in the market,” Tan said, citing data from major convenience stores such as 7-Eleven and Uncle John’s. “It is all about giving consumers pleasurable choices.”

    In a recent JTI survey of 7,000 consumers, 80% reported a positive experience using nicotine pouches. Consumers in the Philippines cited convenience, taste, and satisfaction in the product, and noted it was convenient to use in a country that contains so many no-smoking areas.

    Against this backdrop, JTI’s Vårgårda facility, located in Västra Götaland County on Sweden’s western coast, is gearing up for increased demand for nicotine pouches. The facility will soon produce Nordic Spirit for the UK, Canada, France, and the Philippines, according to factory lead Serkan Karasulu. 

  • Philippines Eyes Tobacco Tax Changes as Illicits Worsen

    Philippines Eyes Tobacco Tax Changes as Illicits Worsen

    During the Philippines’ Senate Committee on Ways and Means hearing yesterday (May 19), Bureau of Internal Revenue (BIR) assistant commissioner Jethro Sabariaga said cigarettes and heated-tobacco products should be taxed the same, but argued that vape products should be taxed much higher.

    “One vape product is not the same as the consumption of one pack of cigarettes,” Sabariaga said. “The government will be losing a lot as vape is consumed for a longer period of time.” 

    The BIR’s proposal comes as the Senate deliberated proposals to amend the excise tax on tobacco products amid worsening illicit trade. A counterpart measure in the House of Representatives seeks to lower the current tobacco excise tax rate, which increases 5% annually. Others proposed a unitary tax system for vapor products and ad valorem tax on vaping devices.

    During the same hearing, Philip Morris International-Fortune Tobacco Corp. maintained that the government needs to rationalize the tax rates amid ineffectiveness leading to lower government revenues. Instead of the 5% annual increase, PMFTC proposed an odd-even scheme for hiking the tobacco excise taxes: 0% every even-numbered year and 6% every odd-numbered year. PMFTC said such a scheme could boost revenues by up to P120 billion ($2.2 billion) every year.

  • Philippines’ Vape Stamp System Working 

    Philippines’ Vape Stamp System Working 

    The Bureau of Internal Revenue (BIR) says the Philippine government’s crackdown on illicit trade is working, collecting P942 million ($17 million) in excise taxes on 130 million milliliters of vape products in the six months since the vape stamp system was introduced. In 2023, those numbers were only P224 million ($4 million) and 11.2 million milliliters for the year.

    Tax authorities vowed to intensify efforts to catch and charge noncompliant players in the growing vape market.

    “There will be no letup in our fight against illicit trade,” BIR commissioner Romeo Lumagui Jr. said. “Just recently, we filed criminal cases against importers of vape products. This shows that the campaign against the illicit trade in vape products is continuous, and we will not stop until we address this issue.”

    The BIR chief was referring to tax evasion cases filed in April against large-scale illicit vape businesses for failure to pay P8.68 billion ($156 million) in taxes. The charges involved illegal vape traders selling the brand names Flava, Denkat, and Flare. The BIR also recently combined with the Bureau of Customs to destroy P3.26 billion ($58.7 million) of seized vape products.

    Lumagui said BIR’s efforts extend beyond distributors and importers.

    “All those involved in the trade of untaxed vape products, including sellers, endorsers, and influencers, could face tax evasion charges under the tax code,” he said.

  • Philippine Government Urged to Fight Illicit Trade with Lower Taxes 

    Philippine Government Urged to Fight Illicit Trade with Lower Taxes 

    As the Philippine government is making progress against illicit vape products with tax stamps, the Philippine Tobacco Institute (PTI) suggests it lower tax rates on cigarettes to replenish its declining revenues as the price disparity between legal and illicit products worsens. Last year, illicit tobacco incidence reached a record 18.2%.

    PTI said tax policies and illicit trade are inextricably linked as the organization pushes for the recalibration of tobacco excise taxes and enhancement of enforcement and prosecution efforts. It issued the call days before the Senate Committee on Ways and Means discusses House Bill 11360, which seeks to adopt an odd-even scheme in hiking the tobacco excise taxes: 2% every even-numbered year and 4% every odd-numbered year until 2035. The current tobacco excise tax rate increases by 5% annually, with a base tax of P60 ($1.08) per pack.

    PTI president Jericho Nograles argued that overly aggressive or automatic tax hikes can incentivize illicit trade. He said higher taxes widen the price gap between legal and illegal products, thus increasing the profitability of smuggling and counterfeiting. PTI said tax revenue continues to decline while smoking incidence increases, meaning people are switching products, that can cost P40 (72 cents) per pack versus P140 ($2.52) for legitimate ones.

     “The automatic tax hikes have resulted in declining government revenues,” Nograles said. “Our position is that if Congress lowers the rates and the government steps up in enforcement, then there would likely be better collections and revenues. It would not only be acceptable, but a win-win for industry and government when illicit trade in tobacco is stopped.”