Key Points
- Scale estimate: Illicit consumption of smoke-free products may reach 80% (company expert assessment).
- Trade gap: A “large mismatch” between China’s exports and Philippine imports points to substantial undeclared inflows.
- Public-health risks: Counterfeit cigarettes were cited with tar levels +160% and carbon monoxide +130%, with detections of cadmium and lead; substandard factories reportedly found foreign contaminants.
- Pandemic effect: Illicit cigarette share reportedly rose from 6% to 20% in the Philippines; from 5% to 28% in Thailand (as stated at the forum).
- Business impact: Illicit trade diverts volume from compliant firms, while look-alike packaging complicates consumer risk recognition.
- Policy & cooperation: While DTI and BIR have stepped up enforcement, the issue was described as an “upstream policy” problem requiring cooperation among China, India, and ASEAN.
- Regional opportunity: With the Philippines set to chair ASEAN next year, the country is seen as well placed to lead regional anti-illicit trade efforts.
2Firsts, September 22, 2025 — From Manilatimes's Report, Speaking at the Financial Times Illicit Trade Forum in Taguig, Metro Manila, PMI regional illicit trade expert Rodney Van Dooren said illicit consumption of smoke-free products—including e-vapor products—in the Philippines could reach as high as 80%. He pointed to a “large discrepancy” between China’s export statistics for e-cigarettes and the Philippines’ official import records, indicating that a substantial share of products may be entering the market outside formal channels.
Van Dooren also highlighted public-health concerns. While “there is no such thing as a safe cigarette,” he argued that counterfeit cigarettes can be even more harmful, citing figures that tar levels could be 160% higher and carbon monoxide 130% higher, with detections of heavy metals such as cadmium and lead. He added that products from substandard factories have reportedly contained foreign matter such as feces and insects. During the pandemic, online channels accelerated illicit consumption: the share of illicit cigarettes was said to have risen from about 6% to 20% in the Philippines, and from 5% to 28% in Thailand.
On policy and enforcement, he acknowledged stepped-up efforts by the Department of Trade and Industry (DTI) and the Bureau of Internal Revenue (BIR) under new laws. However, he framed the challenge as an “upstream policy” issue requiring cross-border coordination, noting the gray area where a product may be legal in the place of manufacture but lacks a legitimate market in the destination country. He urged greater cooperation among China, India, and ASEAN member states. With the Philippines slated to chair ASEAN next year, Van Dooren said the country is in a strong position to spearhead regional action against illicit trade.
Industry observers argue that, to reduce public-health risks while preserving a compliant market, next steps should include tighter source-country oversight, cross-border data sharing, coordinated customs actions, stronger online-platform enforcement, and clear market-access rules.
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