Manila, Philippines (November 11, 2025) – Senator Risa Hontiveros on Tuesday warned that illicit tobacco trade threatens both public health and the country’s Universal Health Care (UHC) program, as she urged government agencies to strengthen enforcement instead of entertaining calls for lower tobacco taxes.
Speaking at the launch of the State of the Illicit Tobacco Trade in the Philippines 2025 Report by Action for Economic Reforms (AER) and Economics for Health of the Johns Hopkins Bloomberg School of Public Health, Hontiveros said the study affirms that the solution to smuggling lies in implementation, not in policy rollback.
“This study affirms that stricter implementation of existing regulations and stronger policies, not tax cuts, are crucial, in combating illicit tobacco trade,” she said. “In fact, lowering taxes, especially at this point, when our economy is struggling and government needs revenues, may not be a good idea.”
Hontiveros, who authored and continues to champion reforms supporting Universal Health Care, said that smuggling of untaxed cigarettes directly undermines public health.
“Tobacco smugglers are reaping huge profits at the expense of the health of Filipinos and the healthcare system of the Philippines,” she said. “Buhay ang ipinambabayad sa bawat sigarilyong pinagbibili sa mga sari-sari store ng mas mababa sa legal floor price. Ito’y buhay na mas malusog at mas matagal sana kung hindi ginawang mas abot kaya pa ang tobacco products dahil sa smuggling.”
She explained that every peso lost to illicit tobacco could have funded medical care, anti-smoking campaigns, and life-saving interventions for Filipinos.
“The missing revenues from excise taxes, because of the illicit tobacco trade, are also compensated for by the lives of our countrymen and women,” she said. “These taxes could have prevented people from starting smoking through anti-smoking campaigns. They could have been used to provide access to essential medicines. They could have been given to a patient to cover the cost of hospitalization.”
The senator vowed to translate the study’s recommendations into action in the Senate. “As Chairperson of the Senate Committee on Health and Demography, I commit to studying the proposals put forward by AER including the enactment of new policies that will strengthen regulations against illicit tobacco and prevent these harmful products from ever coming to our shores.”
She emphasized that the fight against illicit trade is about protecting both revenue and life:
“Hindi natin pwedeng hayaang mabawi ng mga smuggler at ng tobacco industry ang mga tagumpay na pinaghirapan ng ating mga health advocate,” Hontiveros said. “If we work together, policy makers, civil society, researchers, and citizens alike, we can curb illicit trade, strengthen our health systems, and secure a healthier, more equitable future for all Filipinos.”
Experts affirm: Enforcement, not lower taxes, is the solution
Echoing Hontiveros, Jeff Drope, Economics for Health Director of Johns Hopkins Bloomberg School of Public Health, said the study provides definitive evidence that smuggling is a governance problem, not a tax problem.
“Because we see all of this variation … it should just scream out to anyone who’s paying attention that this is not the reason for illicit trade,” Drope said. “Some decline in revenues that we have seen is really, frankly, a function of the taxes not being high enough, not that they are too high.”
He added that consistent enforcement and investment in modern tools have kept illicit trade “manageable” in most of the country.
“In the areas where BIR and other agencies are able to effectively monitor and enforce the regulations…we really see that the levels of illicit trade are low,” he said.
Drope recommended scaling up the Bureau of Internal Revenue’s capacity to track and verify excise-tax compliance.
“Having a digitized system is essential … taking the steps to enhance digitization of the existing system and to improve the existing tax stamps, they’re going to go a very, very long way all on their own.”
Tobacco tax expert Roberto Iglesias said the Philippines must act quickly before illicit networks grow more entrenched, warning that inaction allows criminal economies to gain political power, as seen in South America.
“The first impression that I have after reading the report, that this report is a guide for action for authorities,” he said. “Illicit trade normally starts in the borders… and as there was not the correct reaction to that problem, it is dissimulated in all the country. Inaction was an error in South America.”
Iglesias urged the Philippine government to strengthen diplomatic cooperation with Malaysia and Indonesia to intercept supply from across the border.
“It is necessary to work together with Indonesia and Malaysia to understand the situation and to help the law enforcement of these three countries to act against the smugglers.” ###
Source: AER Media Relations