đˇSpecial Assistant to the President for Investment and Economic Affairs Frederick Go
The tobacco industry contributed billions in excise taxes that funded critical government programs last year, the Office of the Special Assistant to the President for Investment and Economic Affairs (OSAPIEA) said on Monday, January 27.
In a speech read by Undersecretary Jose Guilas at the Tobacco Summit in Quezon City, OSAPIEA Secretary Frederick Go said excise tax collections from cigarettes reached P128.98 billion from January to November 2024.
The government official also said that the tobacco industry also provides livelihoods for approximately 2 million Filipinos, driving economic activity and supporting communities across the country.
However, excise tax revenues from cigarettes have seen a decline in recent years, dropping by nearly PhP42 billionâor 23.9%âfrom a peak of PhP176.2 billion in 2021 to PhP134.1 billion in 2023.
Go attributed the decline to the growing popularity of alternative products like heated tobacco and vape, which have outpaced regulatory and taxation measures.
To address these challenges, Go said the government has intensified efforts to regulate the industry and ensure compliance with health and tax standards.
âEfforts are focused on properly registering industry players, prioritizing compliance with health standards, and ensuring accurate tax payments in accordance with laws and regulations, ultimately boosting collection,â Go said.
The Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) have ramped up enforcement activities, conducting raids and seizing smuggled goods to protect legitimate businesses and safeguard government revenues. Additionally, the creation of the Office for the Special Mandate on Vaporized Nicotine and Non-Nicotine Products (OSMV) under the Department of Trade and Industry has strengthened oversight of the vape and heated tobacco product (HTP) industries.
From January to November 2024, tax collections from vape products surged to PhP1.35 billion, more than triple the PhP361.6 million collected in all of 2023. Similarly, HTPs generated PhP590.1 million during the same period, exceeding the previous yearâs total of PhP459 million.
The OSMV has also cracked down on illegal vape sales, taking down 4.5 million non-compliant online listings and blocking over 100 million vape-related searches.
âWe count on the National Tobacco Administration (NTA) to show its full support to OSMVâs initiatives,â Go said. âAffirming your commitment to enforcement and regulatory efforts will ensure the success of our collective endeavors.â
Legislative measures, such as the Anti-Agricultural Economic Sabotage Act (RA 12022) and the Vaporized Nicotine and Non-Nicotine Products Regulation Act (RA 11900), have further bolstered the industry. These laws aim to curb illicit trade, regulate alternative tobacco products, and promote the use of locally grown tobacco.
The government is also exploring international partnerships to elevate Philippine-grown tobacco as a premium product on the global stage.
âStrengthening the global presence of Philippine-grown tobacco is essential,â Go said. âBy leveraging international partnerships, we can open new markets and create greater opportunities for growth and investment in the local sector.â
A notable example is Philip Morrisâ PhP8.8 billion investment in a manufacturing plant in Tanauan, Batangas, which produces heated tobacco sticks. The company is reportedly considering additional investments in the Philippines, signaling promising growth for the industry.
Despite challenges, the tobacco industry remains a key driver of the Philippinesâ economic momentum. In 2023, the countryâs GDP grew by 5.5%, with year-to-date growth reaching 5.8% in the first nine months of 2024. The government aims to sustain this growth by addressing illicit trade, enhancing global market presence, and fostering collaboration among stakeholders. (TCSP)
