MANILA, Philippines — Former Senate President Franklin Drilon on Tuesday, May 14, expressed concern over the increasing incidence of cigarette smuggling in the country, warning that the government is losing billions in tax revenues and facing setbacks in its anti-smoking efforts.
“I see it every day in television news and newspaper reports about the arrests being made by our law enforcement agencies against people who are engaged in the business of manufacturing and selling of non-tax paid cigarettes. For me, this is very alarming,” Drilon said in a statement.
Drilon, author of Republic Act 10351 or the Sin Tax Reform Law of 2012, noted that the law was enacted with twin objectives: to boost government revenue and to reduce smoking prevalence through higher excise taxes on tobacco and alcohol.
“In 2012, I authored and fought for the passage of RA 10351… We immediately succeeded in achieving these revenue and public health goals because in 2013, the government was able to immediately collect P72 billion in tobacco taxes compared to P33 billion in 2012,” he said.
“Cigarette volume also contracted by 17% in the same period,” he added.
However, Drilon lamented that these gains are now being eroded due to cigarette smuggling, citing data from the Bureau of Internal Revenue showing a year-on-year decline in excise tax collections.
In 2022, revenues fell by 9%, followed by a steeper 23% drop in 2023. Last year, collections further declined by 26%, equivalent to only P130 billion, a sharp drop from the P176 billion collected in 2021.
“Cigarette smuggling is a big problem for the government. Firstly, because it deprives the government of huge tax revenues, which can be used for various government projects and to fund PhilHealth. Secondly, because it defeats our public health objective of bringing down smoking rates,” he said.
“How can we bring down smoking rates if people are still able to buy very cheap cigarettes similar to those of 2012 prices?” Drilon added.
During his time in the Senate, Drilon also authored laws mandating graphic health warnings on cigarette packs and supporting further increases in tobacco taxes.
For his work on tobacco control, he received the Medal of Honor from the World Health Organization’s Western Pacific Regional Office in 2013.