CLARK FREEPORT – Central Luzon ranks higher than the national average in incidents of the illicit cigarette trade that costs the country P250 billion in lost revenues every year.
So declared Federation of Philippine Industries Inc. chairman Jesus “Jess” Arranza at the Kapi-Hann media forum of the Pampanga Press Club at Swissotel-Clark on Feb. 1
Arranza who is also lead convenor of the Fight Illicit Trade (Fight IT) movement bared the prevalence of cigarette smuggling in the country, with 25 provinces recording incidents in 2022 compared to 22 in the previous year.
For 2022 alone, provinces in Central Luzon like Pampanga, Zambales, Bataan and Nueva Ecija recorded high incidences of illegal cigarettes in the local market. Pampanga alone recorded 15.7%.
Arranza said that high taxes on cigarettes effected by the Sin Tax Law in 2012 have resulted into more smuggling of illegal cigarettes which takes advantage of cheap production that by-pass regulatory procedures.
From the lowest tax rate of P2.70 per pack (lowest in 4-tiers), excise tax is now at P60 per pack (unitary rate; no distinction for low, mid, high or premium) or almost 2,000% increase.
“Illicit whites” or unregistered cigarettes which manufacturer or importer are These brands are widely available in Pampanga, particularly in Arayat and Candaba public markets, as well as in Apalit, Arayat, San Luiz, Sta. Rita, San Fernando, Angeles, Guagua, Floridablanca and Porac.
In Bulacan, known hotspots for these illegal cigarettes are Angat, Calumpit, unknown and have no lawful distribution in the Philippines are most common in Mindanao, Palawan, and in Central Luzon. Priced for as low as P30 per pack, the affordability of the illicit whites makes them more appealing to the general public especially the youth.
In some Mindanao provinces, 50 to 74 percent of cigarette products in the market are illicit.
Arranza said brands like Two Moon, Royal, Canon, Modern, Fort, President, D&B, Carnival, and Dunston are available and sold at a very cheap price of P35. This is unusual, he noted, considering that excise tax is already P60.
Malolos, Pulilan, Plaridel, Pandi, San Ildefonso, San Miguel, and Sta. Maria.
Aside from being smuggled, illegal cigarettes are already being manufactured locally, Arranza said, citing a raid at the Clark Freeport as proof “where the factory raided by authorities which is supposedly manufacturing cigarettes for export bore ‘Tagalog’ markings in its packs,” Arranza said.
“Wala naman akong alam na ibang bansa na Tagalog ang kanilang salita,” he quipped.
“The illegal cigarette trade has been depriving the industry of valuable revenue that could otherwise been used by government,” Arranza said, reiterating his claim first aired in December last year of P250 billion in lost revenues annually.
An industry source earlier claimed the government is estimated to be losing P24.7 billion in cigarette excise tax alone annually because of smuggling. This translates to 14% of the cigarette market being illicit, equivalent to nine billion sticks.
Arranza said that smuggling has affected several industries like sugar, rubber, onions and even other valuable commodities.
In the late 1990s, Arranza joined the protest rallies staged by the Angeles City-based Pinoy Gumising Ka Movement multi-sectoral advocacy group against the establishment of duty-free shops at the Clark Freeport which at that time still did not have an operating international airport.
