Philippines Could Lose PHP 13.3 Billion Due to Illegal E-cigarettes, PMI Calls for Product Standards

The Philippine government officials revealed that if the sale of illegal electronic cigarette products continues, the government could lose approximately PHP 13.3 billion (around RMB 1.7 billion).

According to a report by Philippine media Philstar on August 24, government officials stated that if the sale of illegal electronic cigarettes persists, the government could lose about PHP 13.3 billion (around RMB 1.7 billion).

Sharon Garin, the Deputy Minister of the Department of Energy, revealed that this amount corresponds to the consumption of 416 million milligrams of illegal electronic cigarette products by Filipinos.

Garin noted that considering the tax losses on electronic cigarettes and cigarette products, the total could exceed PHP 50 billion (around RMB 6.4 billion), making it difficult for the government's health insurance program to secure funding.

She admitted that the government is currently struggling to combat those smuggling illegal tobacco and electronic cigarette products, as well as those locally produced but evading the law.

"Illegal traders are becoming more 'creative' every day, so they learn how to expand their business."

According to her, the Philippines is an archipelago, and law enforcement agencies like the Bureau of Internal Revenue and Customs cannot monitor all ports nationwide. Some electronic cigarette and tobacco products enter the country through private ports. Additionally, some businesses have introduced machines to produce products within the Philippines without paying taxes.

Garin urged the public to be "vigilant" when purchasing and consuming illegal tobacco and electronic cigarette products.

Denis Gorkun, President of Philip Morris International Philippines (PMFTC), called on the government, especially the Department of Trade and Industry, to establish product standards for electronic cigarettes, as his company has been promoting electronic cigarettes as a "better alternative."

He stated that his company's employees have discovered "50% to 60%" of illegal tobacco and electronic cigarette products in Mindanao, which may come from small boats entering the region and flowing into convenience stores or retail shops.

According to the law, electronic cigarette manufacturers should not sell to minors and should not have flavors appealing to children, among other restrictions.

Gorkun also revealed that the company has "invested PHP 50 billion" in introducing new products such as electronic cigarettes and nicotine patches as alternatives to smoking, even making them more affordable through installment payments.

Garin countered calls to raise taxes on electronic cigarette products to deter smoking, claiming this could attract more illegal electronic cigarette traders to the market.

Garin stated:

"If we make it more expensive, they will choose cheaper options. Whether through taxation, regulation, or prohibition, I don't think this will stop our compatriots from continuing to smoke."

References:    【1】 Philippines stands to lose P13 billion to illicit vape products