Illegal tobacco hurts economy

The Devastating Impact of Illegal Tobacco A Threat to Public Health and Economy

The illegal tobacco trade poses a significant threat to both public health and the economy, not only in the Philippines but also globally. Despite efforts to regulate the industry, illegal cigarettes and vapes continue to flood the market, making it easier for consumers to access these products at cheaper prices.

This proliferation of illicit products has far-reaching consequences, including undermining government initiatives to reduce smoking rates and posing serious health risks to consumers. For instance, counterfeit cigarettes have been found to contain hazardous substances like heavy metals, which are linked to cancer, kidney failure, and neurological damage. Alarmingly, a study by the US Centers for Disease Control and Prevention revealed that these counterfeit products contained high levels of these dangerous substances.

The data is stark confiscated tobacco products have been found to contain insect eggs, mold, and human feces, underscoring the dangers of this illegal trade. Furthermore, the economic impact has been significant. Excise tax collections, which were once buoyed by the landmark Sin Tax Law, have seen a sharp decline in recent years. In 2021, collections stood at P176 billion, but by 2024, that figure had dropped to P134 billion. The Bureau of Internal Revenue (BIR) estimates that illegal vape smuggling alone could result in a P62.52 billion shortfall in excise tax revenue this year.

The rise in adult smoking rates has also been attributed to the easy availability of unregulated and cheaper tobacco products. From 18.5 percent in 2021, the rate surged to 23.2 percent in 2023, reversing nearly a decade of stagnation.

To combat this issue, various government agencies have intensified operations against illicit tobacco products. The BIR has carried out 141 raids targeting illegal vape sales in 2023, while the Bureau of Customs has confiscated 318 shipments of illicit tobacco and vape products in 2024 valued at P9.19 billion.

However, some officials believe that a more comprehensive approach is needed to effectively address the problem. As Customs Assistant Commissioner Vincent Maronilla emphasized, Without tighter regulations, inter-agency cooperation, and support from local governments, the illicit trade will continue to thrive — and with it, the erosion of public health and national revenue.

Globally, the illegal tobacco market accounts for 14 to 15 percent of all consumption – about 500 billion cigarettes annually. It is essential that we work together to combat this issue and protect both public health and our economy.

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Edward Lance Arellano Lorilla

CEO / Co-Founder

Enjoy the little things in life. For one day, you may look back and realize they were the big things. Many of life's failures are people who did not realize how close they were to success when they gave up.