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Tag: Philippines

  • Philippines to Miss Tobacco Tax Goal

    Philippines to Miss Tobacco Tax Goal

    Image: mraoraor

    The Philippines will miss its PHP362.2 billion ($6.32. billion) excise tax collection goal this year due to declining demand for tobacco products, reports Business World. Tobacco excise accounts for more than 40 percent of the country’s excise tax take, according to Jethro Sabariaga, assistant commissioner of the Bureau of Internal Revenue (BIR).

    Sabariaga noted that tobacco consumption has been steadily decreasing over the past decade “You don’t see a lot of people smoking cigarettes these days. Even visually, you can confirm the shift in market demand,” Sabariaga said, adding that the collection growth in other excisable articles will not be enough to offset the decline in tobacco excise.

    The public’s shift to vape products has also been affecting the bureau’s excise tax take, according to Sabariaga. A single vape product is equal to one cigarette pack in excise taxes, but vape products often take longer to consume, he said.

    “So, a cigarette smoker shifting to vape, who usually consumes 10 to 15 packs of cigarettes a month, will probably just buy one vape product for the month, or worse, one for two months,” Sabariaga was quoted as saying.

    The BIR has also faced challenges in collecting excise taxes due to the stubborn illicit trade in tobacco products.

    In the first half of 2024, the agency lost around PHP7.2 billion in potential revenue from seized tobacco and vape products.

  • Philippines Urged to Regulate Flavors

    Philippines Urged to Regulate Flavors

    Photo: Borgwaldt Flavors

    Researchers urged the Philippine government to regulate flavored tobacco and mandate plain packaging, citing the country’s obligation as a signatory to the World Health Organization Framework Convention on Tobacco Control, reports The Manila Times.

    “Historically, tobacco companies have used flavoring agents to enhance the appeal of tobacco consumption, encourage initiation and experimentation of tobacco use, and sustain tobacco use,” researchers of the Ateneo de Manila University were quoted as saying. 

    “However, the Philippines currently does not regulate flavored tobacco products, despite the increasing market shares of flavored tobacco products and novel technologies, such as crushable capsules.”

    In a recent study of 106 cigarette and cigar products, only 62 turned out to have flavor descriptors.

  • Philippines to Step Up Anti-Smuggling Fight

    Philippines to Step Up Anti-Smuggling Fight

    Photo: PMFTC

    The Philippines will step up its fight against tobacco smuggling, reports ABS-CBN, citing a Bureau of Internal Revenue (BIR) announcement on Oct. 3.

    On Sept. 26, President Ferdinand Marcos Jr. signed the Anti-Agricultural Economic Sabotage law, which aims to make food more affordable and provide better income to local farmers. The law classifies smuggling, hoarding, profiteering, cartel formation and financing of these crimes involving agricultural and fishery products as acts of economic sabotage. Violators risk life imprisonment and fines up to five times the value of the goods involved.

    BIR Commissioner Romeo Lumagui Jr. emphasized that the agency will keep a close watch on tobacco smuggling as the national government loses billions of pesos from excise tax violations. This is also meant to protect the livelihood of local tobacco farmers.

    The BIR said it will continue coordinating with the National Tobacco Administration (NTA) and other law enforcement agencies for anti-tobacco smuggling efforts.

    The illicit trade of tobacco causes serious loss of revenue, business closures, decrease in local demand and environmental degradation in the economy, according to the NTA.

  • Regulations Decimate Philippine Vape Sector

    Regulations Decimate Philippine Vape Sector

    Image: freshidea

    Onerous government regulations have forced about one-fifth of Philippine vaping companies out of business, according to Philippine E-Cigarette Industry Association President Joey Dulay. Importers, he added, have found it easier to comply than their domestic counterparts.

    “But we are pushing them to try and comply,” Dulay was quoted as saying by Business World.

    Under the Vaporized Nicotine and Non-Nicotine Products Regulation Act, manufacturers or importers must register their products and secure licenses to operate.

    They are also required to adhere to packaging standards and pay duties and taxes.

    Manufacturers, distributors and importers were given an 18-month transition period to comply with the regulations laid down in the vape law.

    Dulay noted that many vape brands and manufacturers have yet to secure their Philippine standard quality and/or safety mark and import commodity clearance sticker.

    By the end of August, the Bureau of Customs had confiscated PHP6.5 billion ($115.21 million) worth of illegal vape products, mostly from China.

    The government is estimated to miss around PHP5 billion yearly from illicit vape products.

  • Stakeholders Welcome ‘Economic Sabotage’ Law

    Stakeholders Welcome ‘Economic Sabotage’ Law

    Photo: PMFTC

    Philippine President Ferdinand Marcos Jr. on Sept. 26 signed a law protecting the agricultural sector, including tobacco growers, from illegal products, reports the Manila Standard.

    The Anti-Agricultural Economic Sabotage Act aims to make food more affordable and provide better income to local farmers. The law classifies smuggling, hoarding, profiteering, cartel formation and financing of these crimes involving agricultural and fishery products as acts of economic sabotage. Violators risk life imprisonment and fines up to five times the value of the goods involved.

    “We are deeply grateful to President Ferdinand ‘Bongbong’ Marcos Jr. and his administration for their unwavering support in enacting this law,” said Saturnino Distor, president of the Philippine Tobacco Growers Association (PTGA), after the signing of Republic Act No. 12022. “With its implementation, we are hopeful that tobacco farming will receive adequate protection against the entry of illegal products.”

    The PTGA, which represents 50,000 tobacco farmers, described the law as a critical step to protect the industry from smuggled tobacco. Distor noted that illegal cigarettes harm farmers, especially with the rising prices of legal cigarettes due to tax increases. “We hope the government’s action against smugglers will improve the state of Philippine tobacco and bring relief to our farmers and their families,” he said.

    “We’ve seen the damaging impact of smuggling, particularly the proliferation of fake and illegal nicotine products,” said Anton Israel, founder of the Nicotine Consumption Union of the Philippines. “This new law strengthens the fight against illicit cigarette and e-cigarette trade,” he said.

  • Philippines Lowers Minimum Prices

    Philippines Lowers Minimum Prices

    Photo: Bowonpat

    The Philippines tax authority has lowered the floor prices for tobacco products, citing lower production costs, reports Business World.

    The floor price is the minimum price of products and is set by the Bureau of Internal Revenue (BIR), which considers production costs, excise tax and value-added tax in its calculations.

    Under Revenue Regulations No. 016-2024, the floor price of a pack of cigarettes was lowered to PHP78.58 ($1.41) from PHP114.60 last year. A ream of cigarettes now costs PHP785.80 compared with PHP1,146 previously.

    The floor price for heated-tobacco products was cut to PHP60.11 per pack from PHP120.40.

    A 2 mL pod of nicotine salt now has a floor price of PHP180.67, down from PHP200 a year earlier. The floor price of a 10 mL bottle was set at PHP679.12.

    A 10 mL bottle of classic nicotine, by contrast, now costs PHP181.72, up from the PHP179.20 set a year earlier, while the floor price of a 30 mL bottle was PHP263.73, down from PHP403.20 previously.

    Retailers selling below the floor price risk fines of up to PHP500,000 and up to six years’ imprisonment.

    “We are warning all e-marketplaces, online sellers, retail sellers, suppliers and distributors that are selling vapes, cigarettes and heated-tobacco products below the floor price … this is a criminal violation penalized by imprisonment of the seller,” said BIR Commissioner Romeo D. Lumagui Jr.

  • Officials Draw Fire Over Tobacco Donations

    Officials Draw Fire Over Tobacco Donations

    Image: nosyrevy/Carsten Reisinger

    The Philippines’ Department of Social Welfare and Development (DSWD) has drawn fire for allegedly accepting donations from Philip Morris Fortune Tobacco Corp. (PMFTC), reports The Inquirer.

    According to critics, PMFTC donated three mobile clinics to the agency earlier this year for use in social welfare and disaster response operations.

    In a statement released Aug. 9, the advocacy group Parents Against Vape said the “acceptance and promotion” of the tobacco industry by government officials “raised serious ethical, legal and health-related issues.”

    “The actions of these government officials and the accompanying display of support could be construed as a blatant endorsement of an industry that is known for its detrimental health effects and are deeply troubling for several reasons,” said Parents Against Vape President Rebie Relator.

    The group called for “a thorough investigation” into the action of the officials of government agencies involved, saying it violated several laws and policies.

    In February this year, the DSWD’s legal service recommended declining the PMFTC donation, prompting Social Welfare Secretary Rex Gatchalian to ask the legal opinion of the Department of Justice (DOJ) in May.

    On June 6, the DOJ said it would be OK to accept the donations. Justice Secretary Jesus Crispin Remulla maintained that the Civil Service Commission and Department of Health rules on donations cover only officials and employees and do not extend to government agencies and offices in general.

    Nonetheless, several former government officials criticized the DOJ and DSWD’s acceptance of tobacco donations, arguing that the World Health Organization Framework Convention on Tobacco Control, to which the Philippines is a signatory, forbids government officials and employees from soliciting or accepting gifts, favors or donations from tobacco-related entities.

    “Civil service rules could not distinguish the agency actions from the actions of its officers or employees,” said Civil Service Commissioner Mary Ann Fernandez Mendoza. “Otherwise, who will be made accountable for violation of civil service rules if we accept the [DOJ] interpretation? It goes against the principle that public office is a public trust.”

  • Top Court Upholds FDA Authority in Philippines

    Top Court Upholds FDA Authority in Philippines

    Photo: natatravel

    The Supreme Court of the Philippines upheld its 2021 decision to grant the country’s Food and Drug Administration regulatory authority over the health aspects of tobacco products, reports the Inquirer.

    “All products affecting health, including tobacco products, are covered by the FDA’s mandate to ensure the safety, efficacy, purity, and quality of health products,” the Supreme Court said.

    “Thus, the inclusion of tobacco products in the implementing rules of the FDA Act is in accordance with the law,” it added.

    The case stemmed from an attempt to stop the enforcement of the FDA implementing rules and regulations. In a case filed in 2011 before the Regional Trial Court of Las Pinas City, the Philippine Tobacco Institute (PTI) alleged that those rules improperly expanded Republic Act No. 9711 by classifying tobacco products as health products.

    The PTI argued that under the Tobacco Regulation Act of 2003, the Inter-Agency Committee on Tobacco (IACT) had exclusive jurisdiction over tobacco products.

    In 2012, the Las Pinas court ruled in favor of PTI and nullified the provisions of the FDA implementing rules and regulations relating to tobacco.

    The Department of Health and the FDA then petitioned the Supreme Court for review, which overturned the Las Pinas court decision in 2021. The PTI then challenged the high tribunal’s ruling, but was rebuffed.

    The denial of the motions for consideration means the IACT and the FDA will continue to share authority over tobacco, with each overseeing different aspects of the trade.

    Under the Tobacco Regulation Act, the IACT is chaired by the trade secretary with the health secretary as vice chair and includes a representative of the tobacco industry as a member. The PTI previously held the position of representing the tobacco industry in the committee.

  • Tracking Legislation Advances in Philippines

    Tracking Legislation Advances in Philippines

    Photo: Maksym

    The Philippines’ House ways and means committee on July 23 approved legislation to enhance the tracking of tobacco products through the supply chain, reports Business World.

    Under the measure, tobacco companies will be required to implement a digital tracking system on cigarette products to help prevent illicit trade.

    Tobacco duty avoidance has caused the government to “lose” around PHP220 billion in revenue over the past four years, according to Representative Jose Ma. Clemente S. Salceda, who heads the House ways and means committee.

    The legislation would require manufacturers to fix stamps to cigarette packs, vapes and related products, allowing authorities to determine where and when the product was manufactured.

    “We would see where [the cigarette] came from because the tracking system allows us to trace it,” Salceda was quoted as saying. “We will see who brought it here and who sold it, all because of the tracking system.”

    The approved legislation also requires tobacco manufacturers and importers to register their products and equipment.

  • Philippines Halts Online Vapes Trade

    Philippines Halts Online Vapes Trade

    Photo: Ranta Images

    The Philippine government has halted the sale, advertising and distribution of vape products online, reports the Inquirer.

    “This is a temporary suspension until the e-marketplaces are able to convince us of their compliance with their obligations under Republic Act No. 11900, or the vape law, and other laws and related issuances,” said Trade Secretary Alfredo Pascual on July 19.

    According to Pascual, the order was prompted primarily by the need to prevent the sale of vape products to minors and ensure that those being sold online meet the safety standards set by law.

    Vape companies and online sales platforms must submit a sworn certification of their compliance with the law to be allowed to resume sales.

    A recent investigation by the Department of Trade and Industry (DTI) of 90,000 companies engaged in the vape business revealed that 284 had violated various laws, by selling vapes within 100 meters of a school or by using flavors designed to appeal to minors, for example.

    The DTI has confiscated at least PHP32.76 million ($561,454.25) worth of vape products so far this year, mostly for being offered for sale without proper certifications, like the Philippine Standard mark and the Import Commodity Clearance sticker.

    In June, the department ordered the mandatory certification of vape products in compliance with the Vape Act, which lapsed into law in July 2022.

    While supporting the DTI in its efforts to protect consumers and prevent youth access to vaping products, the Coalition of Asia Pacific Tobacco Harm Reduction Advocates (CAPHRA) said an outright suspension of online sales would not solve the problem.

    Instead, the organization argued for greater enforcement of existing laws.

    “While the intention behind the suspension is commendable, CAPHRA believes that a more effective approach would be to enhance enforcement measures rather than imposing outright bans that could inadvertently drive consumers back to more harmful combustible tobacco products,” said CAPHRA representative Clarisse Virgino.