Eastern Visayas provinces are becoming hotspots for the trade of smuggled cigarettes in the central Philippines this year, the National Tobacco Administration (NTA) said in its report.
In the Visayas region, Biliran province has the highest illicit trade incidence with six percent, followed by Southern Leyte with 3.7 percent as of the second quarter of the year. The two provinces had a mere one percent incidence in 2022.
"Smuggled and non-tax paid cigarettes are being sold openly in stores and other public areas all over the Philippines and priced between PHP3 and PHP4 per stick compared to the PHP8.55 per stick of legit and tax-paid cigarette brands," NTA said in its report shared to reporters on Monday.
The rampant tobacco smuggling has contributed to the dramatic fall in government tax revenues from the tobacco industry from a record high of PHP176 billion in 2021 to PHP135 billion in 2023.
Estimates by both Congress and the Bureau of Internal Revenue (BIR) placed the annual losses from illicit tobacco trade between PHP60 billion and PHP100 billion, according to NTA.
Meanwhile, Mindanao remains the center of illegal tobacco trade in the country, with an incidence of 45 percent.
Zamboanga Sibugay leads the provinces in Mindanao with the highest cases of illegal tobacco at 87.5 percent.
"Industry data also points to areas in Mindanao where nine out of 10 cigarettes sold come from illegal sources," the NTA report added.
In Luzon, the province of Bataan has the highest illegal tobacco incidence of 58.2 percent.
Illegal cigarettes are transshipped from Malaysia and Indonesia with Mindanao as the backdoor entry point, according to NTA.
The global study entitled “Fighting the Dark Underworld” by Europe-based Intrinsic Insight also revealed that the governments facing a high incidence of illicit tobacco entry are hard-pressed to acquire modern equipment and technology for their police and coast guard forces to fight global smugglers now using cutting-edge information and artificial technology (IT/AI) to elude detection.
The global study also discovered that in the four countries, which included the Philippines, more and more adult smokers are now finding it “normal” or acceptable to buy illegal cigarettes.
It is revealed that while 50 percent of the smokers sampled for the study felt that illicit tobacco trade is a threat to their country, 43 percent of them would be ‘comfortable buying cigarettes that they know to have been produced or sold illegally.”
For the Philippines, the study showed about 33 percent of adult Filipino smokers would be willing to still patronize illegal cigarettes.
Earlier this year, President Ferdinand R. Marcos Jr. directed the Bureau of Customs and the BIR to strengthen efforts against the smuggling of tobacco and vape products.
The aim is to recover lost revenues and protect the country’s tobacco farmers. (PNA)
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