Philippines: Illegal Trade Thrived During Covid

Industry Insight
May.30.2022

Illegal tobacco traders did brisk business in the Philippines during the Covid-19 pandemic, reports The Manila Bulletin, citing data presented during a recent webinar organized by the National Tobacco Administration (NTA).

Philippines: Illegal Trade Thrived During Covid

According to the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) revenue loss from illegal tobacco trade went up by 662 percent to PHP3.1 billion ($59.3 million) in 2020 from just PHP406.9 million in 2019. 

 

During the webinar, Representative Jericho Jonas B. Nograles, said the BOC seized PHP132.56 million worth of fake cigarettes. According to Euromonitor International, about 13 percent of the total cigarettes sold in the Philippines are illegal. 

 

“What happened in the last few years? Number one: unemployment and a decrease in income have put pressure on the household budget. It’s difficult to stop smoking, but it’s easy to spend money. People want to save money amidst rising prices of commodities and decreasing household income,” Nograles explained at the NTA webinar. 

 

 The pandemic also made it difficult for authorities to crack down on illegal activity, according to the BIR. “We were not able to operate on a massive implementation because we cannot go into some areas that are under lockdown,” said Attorney Beverly Milo, head, revenue executive assistant for the BIR’s Large Taxpayers Service Excise.

 

In Jan. 2022, cigarette prices went up due to a PHP55 percent increase in excise tax. A study by management consulting firm Alvarez and Marsal cited a 97 percent correlation between taxes and tobacco prices, in which the illegal tobacco trade grows as the legal options become more unaffordable. 

 

Tobacco products like cigarettes are among the most smuggled goods in the ASEAN region. According to the World Bank, the global trade of illicit tobacco is worth between $40 billion and $50 billion. 

 

The Philippines neighbors struggle with illicit tobacco trade, too. Malaysia lost out on tax earnings of approximately MYR1 billion ($228,83 million) in 2020.

 All ASEAN member states save for Indonesia are signatories of the WHO Convention on Tobacco Control. This requires countries to suppress the illegal tobacco trade. However, no ASEAN states are part of the Protocol to Eliminate Illicit Trade in Tobacco Products, which requires cooperation and information sharing between countries, including international organizations and customs offices. 

 

Nograles recommended strengthening enforcement and ramping up cooperation as measures to eradicate the illegal tobacco trade. This should include improving intelligence sharing between agencies and implementing stringent frameworks for the prosecution and conviction of illegal traders,” he said. 

BAT FY2025 Results Review Series by 2Firsts
BAT FY2025 Results Review Series by 2Firsts
Feb.12
Bangladesh Industry Association Calls for Regulated Framework Instead of Vape Ban
Bangladesh Industry Association Calls for Regulated Framework Instead of Vape Ban
Bangladesh Electronic Nicotine Delivery Systems Traders Association said at a press conference on April 9 that use of e-cigarette products under regulated policy frameworks has produced positive public health outcomes globally.
Apr.10 by 2FIRSTS.ai
Editorial says West Virginia’s HB 5437 “Vape Safety Act” goes too far, targeting residency and citizenship provisions
Editorial says West Virginia’s HB 5437 “Vape Safety Act” goes too far, targeting residency and citizenship provisions
A News and Sentinel editorial argues that West Virginia’s HB 5437, the “Vape Safety Act,” goes beyond reasonable regulation by adding provisions barring any part of a vape or smoke shop from being used as a residence and requiring owners to be U.S. citizens.
Feb.27 by 2FIRSTS.ai
Philip Morris Korea Launches New IQOS ILUMA i “Electric Purple” Color Edition
Philip Morris Korea Launches New IQOS ILUMA i “Electric Purple” Color Edition
Philip Morris Korea said it has launched a new color edition of its heated tobacco device brand IQOS, called “IQOS ILUMA i Electric Purple.” The new color has been added to the IQOS ILUMA i series and applies to the Prime, standard, and One variants. The product is being sold through the IQOS website and nine IQOS directly operated stores across South Korea.
Mar.12 by 2FIRSTS.ai
TPB Q4 FY2025 Revenue Rises 29% to $121 Million; Modern Oral Business Up 266% Year Over Year
TPB Q4 FY2025 Revenue Rises 29% to $121 Million; Modern Oral Business Up 266% Year Over Year
Turning Point Brands, a U.S. nicotine and tobacco-related consumer products company, reported its fiscal 2025 fourth-quarter results: quarterly revenue was $121 million, up 29% year over year; adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) was $30 million, up 14%. Net revenue from modern oral nicotine products was $41.3 million, up 266% year over year.
Mar.03 by 2FIRSTS.ai
Reuters: More “Made in America” Vape Products Appear in the U.S. Amid Trump Tariffs and Crackdown
Reuters: More “Made in America” Vape Products Appear in the U.S. Amid Trump Tariffs and Crackdown
According to Reuters, the U.S. vaping market has recently seen an increase in products marketed as “Made in America” amid the Trump administration’s stronger enforcement against unauthorized vape brands and increased trade tariff pressure on Chinese goods. Since October 2025, at least eight new vape brands highlighting American credentials have entered the U.S. market, and none of them has authorization for sale. Brands mentioned by Reuters include Maxus Star and OneTank.
Apr.08