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Tag: Philippines

  • JTI Philippines Sees 23% Growth in Nicotine Pouches

    JTI Philippines Sees 23% Growth in Nicotine Pouches

    According to JTI, Nordic Spirit, the first nicotine pouch brand in the Philippines, is enjoying 23% monthly growth across the country. At a recent briefing in JTI’s office in Stockholm, Sweden, that included visiting journalists from the Philippines, Karin Tan, JTI’s director of reduced-risk products, said the product’s growth has been robust since it was introduced in May 2023.

    “There is actually traction in the market,” Tan said, citing data from major convenience stores such as 7-Eleven and Uncle John’s. “It is all about giving consumers pleasurable choices.”

    In a recent JTI survey of 7,000 consumers, 80% reported a positive experience using nicotine pouches. Consumers in the Philippines cited convenience, taste, and satisfaction in the product, and noted it was convenient to use in a country that contains so many no-smoking areas.

    Against this backdrop, JTI’s Vårgårda facility, located in Västra Götaland County on Sweden’s western coast, is gearing up for increased demand for nicotine pouches. The facility will soon produce Nordic Spirit for the UK, Canada, France, and the Philippines, according to factory lead Serkan Karasulu. 

  • Philippines Eyes Tobacco Tax Changes as Illicits Worsen

    Philippines Eyes Tobacco Tax Changes as Illicits Worsen

    During the Philippines’ Senate Committee on Ways and Means hearing yesterday (May 19), Bureau of Internal Revenue (BIR) assistant commissioner Jethro Sabariaga said cigarettes and heated-tobacco products should be taxed the same, but argued that vape products should be taxed much higher.

    “One vape product is not the same as the consumption of one pack of cigarettes,” Sabariaga said. “The government will be losing a lot as vape is consumed for a longer period of time.” 

    The BIR’s proposal comes as the Senate deliberated proposals to amend the excise tax on tobacco products amid worsening illicit trade. A counterpart measure in the House of Representatives seeks to lower the current tobacco excise tax rate, which increases 5% annually. Others proposed a unitary tax system for vapor products and ad valorem tax on vaping devices.

    During the same hearing, Philip Morris International-Fortune Tobacco Corp. maintained that the government needs to rationalize the tax rates amid ineffectiveness leading to lower government revenues. Instead of the 5% annual increase, PMFTC proposed an odd-even scheme for hiking the tobacco excise taxes: 0% every even-numbered year and 6% every odd-numbered year. PMFTC said such a scheme could boost revenues by up to P120 billion ($2.2 billion) every year.

  • Philippines’ Vape Stamp System Working 

    Philippines’ Vape Stamp System Working 

    The Bureau of Internal Revenue (BIR) says the Philippine government’s crackdown on illicit trade is working, collecting P942 million ($17 million) in excise taxes on 130 million milliliters of vape products in the six months since the vape stamp system was introduced. In 2023, those numbers were only P224 million ($4 million) and 11.2 million milliliters for the year.

    Tax authorities vowed to intensify efforts to catch and charge noncompliant players in the growing vape market.

    “There will be no letup in our fight against illicit trade,” BIR commissioner Romeo Lumagui Jr. said. “Just recently, we filed criminal cases against importers of vape products. This shows that the campaign against the illicit trade in vape products is continuous, and we will not stop until we address this issue.”

    The BIR chief was referring to tax evasion cases filed in April against large-scale illicit vape businesses for failure to pay P8.68 billion ($156 million) in taxes. The charges involved illegal vape traders selling the brand names Flava, Denkat, and Flare. The BIR also recently combined with the Bureau of Customs to destroy P3.26 billion ($58.7 million) of seized vape products.

    Lumagui said BIR’s efforts extend beyond distributors and importers.

    “All those involved in the trade of untaxed vape products, including sellers, endorsers, and influencers, could face tax evasion charges under the tax code,” he said.

  • Philippine Government Urged to Fight Illicit Trade with Lower Taxes 

    Philippine Government Urged to Fight Illicit Trade with Lower Taxes 

    As the Philippine government is making progress against illicit vape products with tax stamps, the Philippine Tobacco Institute (PTI) suggests it lower tax rates on cigarettes to replenish its declining revenues as the price disparity between legal and illicit products worsens. Last year, illicit tobacco incidence reached a record 18.2%.

    PTI said tax policies and illicit trade are inextricably linked as the organization pushes for the recalibration of tobacco excise taxes and enhancement of enforcement and prosecution efforts. It issued the call days before the Senate Committee on Ways and Means discusses House Bill 11360, which seeks to adopt an odd-even scheme in hiking the tobacco excise taxes: 2% every even-numbered year and 4% every odd-numbered year until 2035. The current tobacco excise tax rate increases by 5% annually, with a base tax of P60 ($1.08) per pack.

    PTI president Jericho Nograles argued that overly aggressive or automatic tax hikes can incentivize illicit trade. He said higher taxes widen the price gap between legal and illegal products, thus increasing the profitability of smuggling and counterfeiting. PTI said tax revenue continues to decline while smoking incidence increases, meaning people are switching products, that can cost P40 (72 cents) per pack versus P140 ($2.52) for legitimate ones.

     “The automatic tax hikes have resulted in declining government revenues,” Nograles said. “Our position is that if Congress lowers the rates and the government steps up in enforcement, then there would likely be better collections and revenues. It would not only be acceptable, but a win-win for industry and government when illicit trade in tobacco is stopped.”

  • Zimbabwe, Philippines Create Tobacco Pact 

    Zimbabwe, Philippines Create Tobacco Pact 

    Tobacco producers in Zimbabwe and the Philippines have entered into a pact to work together and share expertise. Tobacco is Zimbabwe’s largest agricultural export, generating $1.3 billion from 236 million kg exported in 2024, and is expecting to export 300 million kg this year. Of that, however, 98% of the tobacco is exported raw, allowing manufacturers in 60 other countries to collect much of the profits. The Philippines, on the other hand, processes 46 billion cigarettes domestically each year.

    “This is an ideal opportunity for Zimbabwean farmers and processors,” Musi Muzite, acting executive secretary for Zimbabwe’s National Economic Consultative Forum, said. “We have made significant progress in production, and by leveraging the Philippines’ expertise in processing, we can unlock greater value across the entire tobacco chain.”

    Through the Tobacco Value Chain Transformation Plan, Zimbabwe hopes to convert the tobacco manufacturing sector into a $5 billion industry by 2030 by promoting local value addition, increasing domestic funding, and improving infrastructure, such as curing facilities. It also hopes to increase its tobacco exports in the Philippines.

    “We have been in Zimbabwe and our mission is to explore areas where we can collaborate, particularly in the production of tobacco,” Robert Ambrose, the Philippines’ National Tobacco Administration regulatory manager said. “While we have a comparative advantage in processing, Zimbabwe leads in raw tobacco production, and we see great potential in combining our strengths.” 

  • PMI Exec Sees Strong Potential for Smoke-Free Products in Philippines

    PMI Exec Sees Strong Potential for Smoke-Free Products in Philippines

    A top executive of Philip Morris International (PMI) expressed optimism about the growth of smoke-free alternatives in the Philippines, saying the company sees strong potential despite being in the early stages of its market rollout.

    “In the Philippines, we are still at the very early stages, but we have a lot of confidence in smoke-free products,” said Stefano Volpetti, president of the smoke-free products category and chief consumer officer at PMI.

     Volpetti said progress in Metro Manila is already showing promise, drawing parallels with the company’s initial launches in other countries. He said PMI is committed to making smoke-free alternatives accessible to Filipino smokers, particularly through education and proper explanation of the products.

    “If you think about it, when we started in Italy and in Japan, we started from Milan and Nagoya,” Volpetti said. “We are starting the same journey in the Philippines, starting from Metro Manila. It is clear that when those smoke-free alternatives are well explained to Filipino smokers, there is clearly attraction to move from traditional cigarettes.

    “But we are very confident, because this is a journey that we have done in more than 90 countries around the world. We know the recipe of this journey and the progress in Metro Manila is very powerful.”

    At present, PMI’s smoke-free offerings in the Philippines include IQOS devices, HEETS and TEREA sticks, the more affordable BONDS device, BLENDS consumables and the ZYN oral nicotine product. When asked about the affordability of smoke-free products for Filipinos, Volpetti acknowledged the economic barriers but said PMI is working to provide more options.

    “In general, we have two important aspects of this journey,” he said. “The first aspect is to be sure that smokers understand the benefits of smoke-free alternatives. Because if you don’t understand the benefits, if the benefits are not explained to you, it is very difficult to be able to appreciate that. 

    “We are able to design the consumables in a way that is more in tune with the experience of different consumers around the world. [What the consumers around] the world wants in terms of taste, flavor, in terms of pleasure, but also in terms of the budget they are ready to pay. In the coming future, you will see a portfolio that is more balanced between the premium segment and the medium segment. Our mission is to provide choices across all consumer categories.”

  • Philippines Files Tax Evasion Case Against Vape Brands 

    Philippines Files Tax Evasion Case Against Vape Brands 

    The Philippines Bureau of Internal Revenue (BIR) filed tax evasion complaints against several vape brands due to alleged evasion of over P8.7 billion ($157 million) in taxes. The complaint was filed by BIR Commissioner Romero Lumagui Jr. before the Department of Justice on Tuesday (April 29), against vape firms carrying the brand names Flava, Denkat, and Flare.

    “It was confirmed that the excise [taxes] on these products were not paid. All of them are illicit,” Lumagui said. “This is what happens when you keep violating our tax laws. We are continuing our monitoring of the vape industry, so you can expect that this will not be the last time we file a case.”

    He also said that with the continued proliferation of illicit vape products in the market, the government’s total loss is probably billions more. The BIR said that it seized 560,000 units of vape products in 2024, representing P415 million ($7.5 million) in unpaid taxes. 

    In addition to tax evasion, the charges filed also include the illegal possession of vape products without the required excise tax under Section 263 of the National Internal Revenue Code, as well as failure to submit excise tax returns. 

  • Philippines Customs Seizes $1.5M in Illicit Cigarettes  

    Philippines Customs Seizes $1.5M in Illicit Cigarettes  

    Authorities in Bocaue, Bulacan, Philippines, seized six truckloads with 717 boxes of assorted branded cigarettes in a warehouse last week, worth P83.7 million ($1.5 million). Philip Morris Philippines Manufacturing and Japan Tobacco International both cited the Bureau of Customs’ “dedication and effectiveness” as well as the leadership of Customs Commissioner Bienvenido Rubio. 

    Owners of the warehouse will be charged for violating the Tax Reform for Acceleration and Inclusion Law if they fail to present documents within 15 days, Rubio said. Charges could also be filed against the owners of the smuggled dried tobacco products for violating the Anti-Agricultural Economic Sabotage Act. 

  • Young Asians Moving from Cigarettes to Vape

    Young Asians Moving from Cigarettes to Vape

    Young people in Southeast Asia are moving from smoking cigarettes to vaping and heated tobacco products (HTPs) instead, a survey of consumer research and data analytics from Milieu Insight said. It surveyed more than 18,000 legal-age adults across Singapore, Malaysia, Vietnam, the Philippines, and Indonesia, studying their consumption trends, flavor preferences, purchase channels, reasons for use, and future adoption.

    “The study shows some key factors influencing this trend,” said Gerald Ang, Milieu Insight’s chief operating officer. “One key factor is the variety of flavor, with fruit and menthol flavor dominating consumer choice in alternative nicotine products.

    “E-cigarettes and heated tobacco products being ‘cheaper’ is also an important reason for using alternative nicotine products.”

    Even though Singapore has banned the use of alternative nicotine products, they are still prevalent among people aged 21 to 29, the survey found, with 7.8% in that age group use vapes and HTPs, while 5.7% smoke cigarettes. The study also found that in Singapore, 43% bought these products from online shopping and messaging platforms, 29% bought the alternative nicotine products from friends and family, and 19% bought them on social media platforms.

    Ang said the study shows that e-cigarette and HTP use in the region is expected to grow, as a sizeable portion of smokers indicated that they were likely to use alternative nicotine products in the next six months.

    In Vietnam, which has also banned these alternative nicotine products, 9.2% of people in the 25 to 34 age bracket are vaping. And in Malaysia, 14.8% of young people between 20 and 29 are using e-cigarettes and HTPs.

  • Virginia Tobacco Begins Trading in Philippines 

    Virginia Tobacco Begins Trading in Philippines 

    The National Tobacco Administration (NTA) said that growers who planted the last week of November have already started bringing flue-cured Virginia tobacco buying stations in Region 1 and Abra to open the 2024–2025 crop season.

    Administrator and Chief Executive Officer Belinda S. Sanchez said NTA extension workers have already calibrated and sealed the trading equipment and facilities of the two biggest tobacco trading outlets in the Ilocos region, as well as the scales of accredited field canvassers

    Trading warehouses of the Universal Leaf Philippines, Inc. in Agoo, La Union; Candon City and Cabugao, both in Ilocos Sur; Currimao, Ilocos Norte; and Bangued, Abra; and the warehouse of Trans Manila Incorporated (TMI) in San Juan, Ilocos Sur, are now open.

    Trading centers opened by purchasing a kilo of prime class of flue-cured tobacco at P107 ($1.89) while field canvassers in the first district of Ilocos Sur bought the same class of cured tobacco as high as P125 ($2.13) per kilo. With these, Sanchez said she is expecting another golden season for tobacco farmers this year, as the current tobacco buying prices are much higher than the approved tobacco floor prices during the tripartite conference in October 2023.