The Market Monitor Minding the Nation's Business
The Philippine tobacco industry likely generated USD7.3 billion in revenue in 2024, according to Bureau of Internal Revenue (BIR) Commissioner Romeo Lumagui Jr.
He made this announcement during the second day of the International Tobacco Agricultural Summit at SEDA Vertis North in Quezon City.
Lumagui noted that the local tobacco sector is expected to grow at an annual rate of 2.67 percent between 2024 and 2029. He also emphasized the industry’s substantial contribution to the national economy, with tobacco taxes exceeding P134 billion in 2023 alone.
However, Lumagui pointed out that the potential for high revenues has also attracted illegal traders, exploiting the growing demand for tobacco and related products.
“Such exploitation is behind the illicit trade in tobacco products, which has been exposed as a major scourge of the economy itself. We are all aware of the various ways through which illicit trade undermines and eventually destroys not only the economy, but society itself,” he said.
He further explained that illicit trade undermines the market by flooding it with substandard products that pose health risks, creating unfair competition for legitimate businesses.
“The proceeds of illicit trade have been known to fund organized crime, and possibly even local terrorist groups,” he added.
Lumagui assured that the BIR is intensifying its efforts to combat illicit tobacco trade, including targeting vapes and traditional tobacco products like cigars and cigarettes.
He highlighted several significant operations in recent months, including a raid in San Pablo City in March 2023, where BIR agents and the Philippine National Police-Criminal Investigation and Detection Group (PNP-CIDG) confiscated over 102,000 bottles of illicit vape products, valued at P75 million in tax deficiencies.
The BIR also conducted large-scale raids in Cavite, where they uncovered illicit cigarettes, raw tobacco, and fake internal revenue stamps, amounting to P5.4 billion in tax liabilities.
Another raid in Manila and Rizal Province in March 2024 resulted in the seizure of over 63,000 illicit vape products, with a tax liability of P151 million.
Lumagui mentioned a significant operation in Agusan del Sur and Surigao del Sur, where close to 350,000 packs of illegal cigarettes, valued at P219 million in tax liabilities, were confiscated.
Further raids in Clark, Pampanga in September 2023 resulted in the discovery of illicit cigarettes and unregistered machines, totaling over P8 billion in tax liabilities.
In August 2024, BIR operatives also seized over 5,000 illicit vape products at the Philippine Vape Festival, all lacking internal revenue stamps.
“I have no doubt that illicit traders from all sectors of the economy will continue to indulge in their nefarious practices. The Bureau, however, stands ready to meet whatever challenge they may pose to us, for in the final analysis, it is the well-being and the future of our people that is at stake in the war against illicit trade,” Lumagui concluded.