Case Studies in Illicit Tobacco Trade: The Philippines

Beginning in 2013, the Philippines began imposing steep price increases on tobacco. This Fact Sheet describes the series of increases and the measures put in place by the government during this time to combat illicit trade. The Fact Sheet concludes by offering recommendations to further address illicit trade of tobacco products.

In the Philippines, the smuggling of a wide array of goods, including essential ones like rice and oil, is ubiquitous. The revenue collection agencies, namely the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC) are viewed as corrupt by many in society, and even the judiciary is prone to bribes and regulatory capture.

How then can illicit trade be dealt with in a situation when good governance and institutions are wanting? Strong governance and institutions cannot be realized in an instant, but delaying measures to reduce tobacco consumption, like the series of disruptive tax rates that the Philippines has imposed since 2012, is not an option in the face of the huge costs of tobaccorelated illness and death on society and productivity. A viable way to tackle illicit trade even when institutions are lacking is to measure it, identify the sources of challenges, and execute the appropriate interventions.