Illicit trade a national crisis—Salceda

Illicit cigarette trade erodes government revenues and threatens to increase smoking prevalence in the Philippines from the present 23 percent, a leader of the House of Representatives said in a forum on Oct. 17, 2023.

“As a result of cheaper illicit alternative, this is a serious national crisis for me, having worked to bring down smoking prevalence down to 23 percent,” Rep. Joey Salceda, chairman of the House ways and means committee, said in a media forum organized by the Sin Tax Coalition.

Sin Tax Coalition held an event entitled “Defend Sin Taxes, Fight Illicit Trade: A Media Forum on Addressing Illicit Tobacco Trade in the Philippines” attended by government officials, health advocates and journalists on Oct. 17.

“Until we resolve the issue of illicit trade of cigarettes to a significant degree, there will be a hesitation among the public to support further excise tax increases,” said Salceda.

Salceda said the enforcement and implementation of measures against illicit traders should be seriously considered before discussing tax increases. He said that if higher excise taxes would be imposed, “di lalo na tayo nagka-illicit.”

“Doing nothing against illicit trade is no longer an option. We need a marketing strategy. We need a price point where the key curve happens and therefore consumption collapses. We just have to make a certain consumer behavior study, basically at which point where differential becomes small and therefore enforcement becomes less important. So, there will be science-based approaches,” he said.

He said the study should focus on whether enforcement is lacking or there are other issues such the price structure at play. “Right now, I’m on the enforcement side,” he said.

Salceda underscored the need to curb illicit trade, allegedly perpetuated by local groups using ports and economic zones in the country.  He said Filipinos are behind the illicit cigarette factories. “Foreigners have nothing to do with it. Karamihan nyan are factories inside Subic, the bulk of it,” he said, referring to fake stamps, rolling machines and other paraphernalia used for contraband operations housed in local warehouses.

“We should prepare ourselves to come up with