The Philippines has been identified as an “elevated risk” market for illicit cigarettes, with illegal products accounting for 25.3% of total sales last year and projected to rise to 28.9% by 2028, according to a Euromonitor International study commissioned by the EU-ASEAN Business Council. The report estimates the government lost nearly $980 million in 2024 and about $1.1 billion last year due to the illicit cigarette trade, while illegal e-vapes, which make up 86% of the market, caused an additional P23 billion ($400 million) in losses from 2024 to 2025.
Researchers cited price-sensitive consumers, porous maritime borders, established regional smuggling routes, annual excise tax hikes of 5%, and enforcement challenges as key drivers, with illicit products increasingly imported from neighboring ASEAN states and China. The study also highlighted the growing role of digital platforms such as Telegram, WhatsApp, and Facebook Marketplace in distributing illegal tobacco, alongside traditional sari-sari stores and street vendors, and warned that paper-based tax stamps are easily counterfeited, recommending a shift toward digital tax verification systems to better protect revenues and track the trade.
