Stakeholders urged government to combat illicit cigarette trade using a whole-of-society approach, including allocation of funds for the conduct of strict patrol of the country’s maritime boundaries.
Jesus Arranza, chairman of the Federation of Philippine Industries (FPI) said cigarette smuggling caused a P26 billion revenue loss in 2022 and a 0.39 percent reduction in the Gross Domestic Product (GDP) during a four-year span from 2018 to 2022.
Arranza also noted high cigarette taxes incentivize illicit trade by making lower-priced options more attractive, especially with weak enforcement.
The press conference was also attended by a panel of experts which called for an end-to-end collaboration between governments of other countries to prevent the entry of smuggled cigarettes into the country.
“The government must take concrete actions, not just make empty promises, to combat illicit cigarette trade. This requires implementing effective programs and measures. Instead of imposing new taxes on an industry already plagued by illicit trade, the government should collaborate with other governments and institutions, engage with international bodies and conventions, and raise awareness about the negative impact of illicit trade on nations and economies,” the panel suggested.
Arranza said illicit cigarette trade led to a 0.63-percent decrease in household income and a 4.9 percent drop in employment from 2018 to 2022, based on findings by a University of Asia and the Pacific (UA&P) study entitled “Illicit Cigarette Trade in the Philippines:
Economic and Social Impacts of Weak Regulatory Enforcement” that it supported together with various sectoral representatives.
If not immediately addressed, Arranza warned that the illegal cigarette trade could lead to even more losses to the government and the industries that have served as the backbone of the economy.
“The issue of smuggling is very prevalent in the country Industry is the backbone of our economy. What will happen to our country? Loss of employment, loss of economy. I am happy to find the outcome [of the study], and people are realizing the effects,” Arranza said.
