The Senate Committee on Ways and Means said illicit trade has been a major factor in the rise of smoking prevalence in the Philippines and a drop in revenue from excise taxes on tobacco products.
According to a survey by the Food and Nutrition Research Institute, smoking prevalence in the country rose from 14% in 2021 to 18% in 2023.
“For almost six years, we reduced smoking prevalence, but in just two years, we’re back to square one,” Senator Sherwin Gatchalian said during the public hearing.
Meanwhile, revenue from tobacco excise taxes fell from a peak of PHP176 billion (USD$3 billion) in 2021 to PHP134 billion (USD$2.3) in 2023.
Gatchalian, who chairs the panel, attributed this to a rise in illicit trade, with data from Kantar showing illegal cigarettes now account for 16% of the market, up from 5% in 2021.
“Illicit trade undermines our efforts,” he said, underscoring the need to address revenue leakages by curbing illicit trade. “These products evade taxes and make cigarettes more accessible, promoting smoking among our people.”
Tobacco products are among eight excisable items in the country, along with alcohol, vapor products, petroleum, automobiles, non-essential goods and services, sugar-sweetened beverages, and mineral products.
The survey also revealed a rise in the use of e-cigarettes among adolescents, with usage skyrocketing from 7.5% in 2021 to 39.9% in 2023.
