Senator Win Gatchalian raised concerns about the country鈥檚 persistent problem of illicit cigarette trade, saying it poses a significant challenge that has reversed gains in public health.
During the Senate ways and means committee probe Wednesday, Gatchalian addressed representatives from the Bureau of Customs (BOC), Bureau of Internal Revenue (BIR), Department of Finance (DOF), Department of Trade and Industry (DTI), and the Food and Nutrition Research Institute (FNRI) and highlighted the unabated illicit trade in tobacco products as major setbacks in the country鈥檚 fight against rising smoking prevalence.
鈥淭his is a cause of concern because for many years鈥� we reduced smoking prevalence but in two years, we are back to square one,鈥� Gatchalian said.
Citing FNRI data, Gatchalian reported that smoking prevalence has increased from 14.6 percent in 2021 to 18.9 percent in 2023.
Despite the rise in smoking rates, Gatchalian noted the decline in excise tax revenue from cigarette sales, falling from P176.49 billion in 2021 to P134.91 billion in 2023. He also referenced data from Kantar and Euromonitor, which revealed that illicit cigarettes account for 16 percent of those sold in the Philippines.
He acknowledged the consistency with the FNRI, Kantar, and Euromonitor data on illicit trade, noting the trend is there with the highest prevalence in Mindanao.
鈥淚llicit trade will not do us any good. Illicit traders do not pay taxes to the government. At the same time, it also promotes smoking to our constituents. Those illicit cigarettes are accessible to anyone, and any age,鈥� he said.
He called on government agencies to boost enforcement efforts.
鈥淜ung walang nakukulong, walang natatakot. Kung walang natatakot, tuloy tuloy lang ang ligaya. And the profit margin can be as high as three times or even four times. So the conviction is very important,鈥� Gatchalian said.
鈥淧wede tayong mag hearing dito araw-araw pero if we don鈥檛 put people in jail walang mangyayari talaga,鈥� Gatchalian said.
Based on data mentioned by Gatchalian during an earlier ways and means committee hearing, tax leakages from illegal cigarettes amounted to P342 million in 2024, while leakages from vapor products amounted to P64 million.
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According to Philippine Tobacco Institute (PTI) President Jericho Nograles, the government is losing P52 billion from the smuggling of vape and tobacco products.
BOC Assistant Commissioner Vincent Maronilla reported a rise in seizures from 131 cases in 2021, valued at P1.71 billion, to 318 cases in 2024, amounting to an estimated P9.19 billion.
Meanwhile, from January to September 2024, the BIR carried out 141 enforcement actions against illegal vapor products. This number surged to 847 from October to November of the same year due to intensified inspections of vapor product retailers.
Gatchalian also expressed concerns over the massive presence of illicit cigarettes and vapor products in the Philippine market, particularly those found on online platforms such as Shopee, Lazada, and Facebook Marketplace.
According to the senator, popular online e-commerce websites are not doing enough to prevent the unchecked spread of unregistered cigarettes and vape products on their respective platforms.
鈥淲hat are you (online platforms) doing to prevent this from happening? You have to give us a better solution in order to prevent this type of product from being sold on your platforms,鈥� Gatchalian said, addressing representatives from Lazada and Shopee.
鈥淥nline platforms should do a much better job at filtering these illicit products,鈥� he noted, stressing that these platforms are the first line of defense against illicit trade.
As illicit and unregistered cigarettes and vapor products evade regulatory oversight, those found on e-commerce platforms may be in violation of Republic Act No. 11900, or the Vaporized Nicotine and Non-Nicotine Products Regulations Act, which aims to regulate vapes and HTPS for the protection of the public while providing adult smokers better alternatives to cigarettes.