JTI Investing in Philippines

Japan Tobacco International is expanding its operations in the Philippines, hiring additional workers for its global business service center (GBSC).

The GBSC was established in 2020, at the height of the Covid-19 pandemic, to service JTI’s affiliates in Asia-Pacific and the Americas. In an interview with the Manila Bulletin Business, JTI Philippines General Manager John Freda said the company would be hiring an additional 150 people, bringing the center’s overall manpower to 600.

Although there are no immediate plans, Freda did not discount the possibility of JTI producing its Ploom heated-tobacco sticks in the Philippines, which serves as the company’s manufacturing hub for the Asia-Pacific region. Ploom is currently produced in Japan and in the EU.

JTI’s cigarette factory in Malvar, Batangas, exports more than 50 percent of its production mainly to 16 countries in the Asia-Pacific region. The factory employs 800 people with marketing team support of over 4,000 personnel across the country.

In the interview, Freda also expressed his concern about the growing illicit cigarette trade in the Philippines, which is estimated to account for 16 percent to 18 percent of the market. In some areas in Mindanao, the share of smuggled cigarettes could reach 60 percent of the market.

Citing the experience of Malaysia as a cautionary example, Freda urged the Philippines to step up enforcement and adopt reasonable rates of taxation.

“We are paying PHP55 [$0.94] per pack in taxes, and clearly the illicit operator is not paying like that, and as prices increase due to taxation, it becomes even more profitable for smugglers and therefore need[s] strong enforcement measures,” he said.