Tobacco smuggling remains leading cause of industry decline, job losses
MANILA, Philippines — Various government agencies and experts stressed the need to address the smuggling of tobacco as it causes job losses, revenue decline, business shutdowns, and a decrease in local demand.
According to National Tobacco Administration (NTA) Deputy Administrator Giovanni Palabay in a recent forum, illicit trade of tobacco continues to cause loss of revenue, public health concerns, business closures and unemployment, market distortion, encouragement of criminal activities, and environmental degradation in the economy.
He added that illegal trade also decreased demand for locally grown tobacco, leading to lower prices and hence lower income for tobacco farmers.
“From 60,000 hectares, tobacco planting areas now only cover 27,000 hectares,” Palabay said.
Meanwhile, Agriculture Undersecretary Deogracias Savellano tagged the illegal tobacco trade as “theft,” equating it to stealing from farmers and their families, the government, and Filipinos in general, as tobacco revenues are also supposed to fund Universal Health Care.
“Illicit trade is theft, regardless of what it is called,” said Savalleno.
“Artificially lowered prices of illicit tobacco [also] lead to an uncompetitive market,” he added.
Philippines Japan Tobacco International general manager John Freda, for his part, noted how tobacco smuggling affects the entire supply chain.
“This has led to workforce reductions, and the situation could worsen,” said Freda.
“Illicit products infiltrate established distribution routes and find their way into the retail space,” he added.
Former lawmaker Jericho “Koko” Nograles shared similar sentiments but stressed that the smuggling issue transcends tobacco.
“It’s national security, it’s tax collection, it’s customs collection,” he said.
Work together against smuggling
According to NTA administrator and chief executive officer Belinda Sarmiento-Sanchez, there should be a “multilateral approach of commitment to collaboration between agencies on different levels of governance” to combat tobacco smuggling.
“Innovating strategies, advancing technologies, and encouraging information-sharing: these help interagency efforts,” she said.
Nograles said that initiatives like the inclusion of tobacco in the Agriculture Smuggling Act would give teeth to law enforcement agencies.
“There would be light at the end of the tunnel [in the fight against illicit tobacco trade] if we synergize and work together,” said Nograles.
For Federation of Philippine Industries chair Jesus Lim Arranza, the problem of smuggling is not irreparable and is merely a “question of determination.”
“If we all fight smuggling, no one will be able to smuggle,” he said.
“It’s a question of determination,” he added.