Analysing the Trend of Illicit Tobacco in the Philippines From 1998 to 2018

Tobacco taxation is the most effective measure to reduce cigarette consumption and consequently improve public health outcomes. It is also an important source of government revenue. The presence of an illicit tobacco market diminishes the public health and fiscal gains of cigarette levies by making cheaper non-taxed cigarettes available. To date, the research on the extent of illicit tobacco trade in the Philippines, despite its potential to inform policies for controlling the supply of illicit cigarettes, has been limited. This study provides an estimate of the size of the illicit tobacco market in the Philippines from 1998 to 2018. It employs gap analysis comparing an estimate of the survey-based adult cigarette consumption with legally sold cigarettes in the Philippines. The illicit trade estimates are contrasted with the evolution of tax changes. The results show that the illicit cigarette market share dropped by 42% from 2003 to 2008 and by an additional 79% from 2008 to 2013. In spite of the large tax increases by the Philippine government through the Sin Tax Law starting from 2013 until 2018, the illicit share in 2018 remains similar to its 1998 level of 16% of the total market. Hence, our study finds no evidence of a positive relationship between tobacco taxes and size of illicit cigarette market in the Philippines

Measuring the Capacity to Combat Illicit Tobacco Trade In 160 Countries

Background Illicit trade of tobacco negatively affects countries’ tobacco control efforts. It leads to lower tobacco prices and makes tobacco products more accessible to vulnerable populations. In this study, we constructed an illicit tobacco trade index, which measures the structural and institutional capabilities of 160 countries in addressing illicit tobacco trade. We collected the most recent and best available data on general governance, tobacco control policies, and trade and customs practices. Results Singapore, New Zealand, Finland and Sweden lead countries with the most favorable illicit tobacco trade score. We observed a positive relationship between illicit tobacco trade scores and Gross National Income (GNI) per capita and a negative relationship with the share of illicit tobacco trade to total tobacco consumption. Conclusions The capability to combat illicit trade varies across countries. However, on average, low and middle-income countries (LMICs) are less capable of addressing illicit tobacco trade as suggested by the lower illicit tobacco trade index score. The lower index score in low and middle-income countries was mainly driven by low scores in tobacco control policies and trade and customs practices and conditions. Our study reinforces the importance for LMICs to adopt the WHO’s Protocol to Eliminate Illicit Tobacco Trade Products, particularly committing to treaty obligations and investing on track and trace system and other customs reforms