Turning to exports

The Philippines’ leaf-tobacco industry is putting on a brave face despite Government plans to discourage consumption – and fund the health sector – by raising the excise tax on tobacco products, according to a Business World story.
While high excise tax rates had a big impact on production figures and livelihoods, they would not kill the industry, said Robert L. Seares, administrator of the National Tobacco Administration. “As long as there is market demand for quality tobacco, our farmers will still continue to produce tobacco,” he said.
“In terms of profitability, tobacco production is not yet a sunset industry.”
Seares said that the Philippines’ industry was now focused on achieving a higher volume of exports based on the quality tobacco, particularly Burley, that local farmers could produce.
“Tobacco leaf production in the Philippines has been reduced to only 48 million kg in 2017 from 65 million kg five years earlier. Our five-year data (2013-2017) shows that the number of tobacco farmers and area planted to tobacco plunged by 40 percent to 34,465, and 43 percent to 22,704 ha, respectively,” Seares said.
The excise tax rate on cigarettes has been going up and tobacco production has been going down since the passage of the Sin Tax Reform Law in 2012.
And with another proposed increase in excise, tobacco growers are faced with a serious threat of losing their primary source of income.