Zero-Tariff Exports to ASEAN: Philippines Encourages Heated Tobacco Companies to Invest in Local Man

The Department of Trade and Industry of the Philippines is examining whether manufacturers of heated tobacco products (HTPs) should consider relocating their factories to the Philippines, as local demand and export opportunities are increasing. DTI Undersecretary Rodolfo stated at the International Tobacco Agriculture Summit held in Manila on August 2 that although cigarette demand in the Philippines is expected to decline from 49.6 billion sticks in 2022 to 39 billion sticks by 2027 due to tax reasons, local demand for HTPs is expected to increase significantly.  
Rodolfo cited a report from Euromonitor indicating that retail sales of HTPs in the Philippines are expected to increase by 511% from 664.7 million sticks in 2022 to 4.06 billion sticks by 2027. He stated that producing HTPs in the Philippines could benefit from the zero-tariff policy in the free trade agreement.
Rodolfo mentioned that if produced in the Philippines, HTPs could be exported to ASEAN countries (except Vietnam), Australia, New Zealand, and Japan, South Korea. In 2022, the largest export markets for Philippine tobacco products included South Korea, Thailand, Myanmar, Singapore, and Malaysia.
Rodolfo noted that multinational companies are exploring the possibility of producing HTPs in the Philippines to take advantage of local and global market opportunities. For instance, Philip Morris Fortune Tobacco plans to establish a factory in Batangas worth 9 billion pesos to produce IQOS heated tobacco products.
He added that other potential investors include Japan Tobacco International, British American Tobacco, and some brand manufacturers distributing HTPs in the Philippines. Rodolfo believes that the Philippines is a global player in traditional tobacco products. Although currently small in scale, emerging high-tech tobacco products like HTPs offer new opportunities.