Philippines Encourages Heated Tobacco Manufacturers to Build Local Production, Offering Zero-Tariff

According to the Philippine News Agency, the Department of Trade and Industry (DTI) of the Philippines is urging tobacco companies to produce heated tobacco products in the country, citing a surge in domestic demand and export opportunities.

At the International Tobacco Agriculture Summit held in Daqing City on August 2, DTI Undersecretary Ceferino Rodolfo stated that while local demand for cigarettes is expected to decline from 49.61 billion sticks in 2022 to 39.06 billion sticks by 2027, the sales of heated tobacco products are expected to grow significantly during this period.

He cited a forecast from Euromonitor, which predicts that retail sales of heated tobacco products will surge by 511% by 2027, reaching 4.06 billion sticks.

Rodolfo stated that heated tobacco manufacturers would benefit from the Philippines' free trade agreements with regional markets, saying, “If manufacturers produce heated tobacco products in the Philippines, they can export them to ASEAN (except Vietnam), Australia, New Zealand, Japan, South Korea, and Hong Kong at zero tariffs.”

Image source: PMI

In 2022, the main destinations for Philippine tobacco products included South Korea ($102.2 million), Thailand ($98.29 million), and Myanmar ($49.4 million).

Rodolfo mentioned that Philip Morris International's Philippine branch aims to establish a factory in Batangas worth 9 billion Philippine pesos for the production of IQOS devices.