Philippines Country Profile

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Key Points

  • The Philippines is an island nation in Southeast Asia consisting of over 7,000 individual islands. It is part of the World Health Organization’s Western Pacific Region.
  • Its population was 115.6 million as of 2022. The previous year, adult tobacco use prevalence was 19.5%.
  • The Philippines ratified the World Health Organization Framework Convention on Tobacco Control in 2005. It has not signed the Protocol to Eliminate Illicit Trade in Tobacco Products.
  • PMFTC Inc. – a joint venture between Philip Morris International and the Fortune Tobacco Corporation, the tobacco business of local conglomerate LT Group – has the largest share of the Philippine cigarette market. Japan Tobacco International accounts for most other sales.
  • Recent tobacco industry tactics in the Philippines include attempting to influence the committee responsible for overseeing tobacco control in the country; corporate social responsibility, particularly during the COVID-19 pandemic; and establishing relationships with public officials, including at the very top of government.

The Philippines has made some progress on tobacco control, especially since the introduction of the reforms known as the Sin Taxes in 2013. These both greatly simplified tax structures and significantly increased excise on tobacco and alcohol products, with a substantial share of the new revenue being channelled into universal healthcare.1 Tobacco use prevalence, which stood at 29.7% in 2009, had fallen to 23.8% by 2015, and again to 19.5% by 2021.23 However, rising incomes and subsequent smaller increases in tobacco taxes have made cigarettes more affordable, slowing further progress.4 Other challenges include an illicit tobacco market larger than the global average;5 the growing popularity of newer nicotine and tobacco products (particularly e-cigarettes) amongst young people;6 and ongoing tobacco industry presence on the inter-agency committee responsible for implementing tobacco control regulation in the country.7 Philippine domestic law continues to fall short of what is required by the World Health Organization Framework Convention on Tobacco Control (WHO FCTC) across a number of areas.8

Tobacco Use in the Philippines

In 2022, the population of the Philippines was 115.6 million.9 According to the 2021 Global Adult Tobacco Survey (GATS), tobacco use prevalence amongst Filipino adults was 19.5%.3 Prevalence is much higher amongst males (nearly 35%) than females (just over 4%).3 Amongst adolescents aged between 13 and 15, 12.5% were using some form of tobacco in 2019.10 Again, prevalence for males (over 18%) is higher than for females (nearly 7%).10

In the 2021 GATS, just over 2% of Filipino adults reported current use of e-cigarettes (3.6% males; 0.5% females).3 However, use of e-cigarettes is considerably higher amongst youth. In the 2019 Global Youth Tobacco Survey, the corresponding figure was over 14% – higher than for conventional cigarettes (10%).10 More than 20% of boys aged between 13 and 15 reported using e-cigarettes, compared to 7.5% of girls.10 Smokeless tobacco use in the Philippines also appears to be greater amongst the young: in 2019, 3% of young people reported current smokeless tobacco use, compared to 1.5% of adults in 2021.103

There were an estimated 95,600 deaths attributable to tobacco use in 2019, accounting for nearly 15% of all mortality in the Philippines that year.11 According to a 2018 study, the economic burden of tobacco use in the Philippines in 2012 was just under PHP₱270 billion (US$15.1 billion according to the purchasing power parity exchange rate) – equivalent to 2.5% of national GDP. This includes both direct costs resulting from tobacco use (e.g., hospitalisations and medication) as well as indirect costs (reduced productivity due to disability and mortality). The same study found that diseases attributable to tobacco use accounted for nearly 5% of total health expenditure.12

Tobacco in the Philippines

Market share and leading brands

PMFTC Inc. (PMFTC) dominates the Philippine cigarette market, with a market share of around 61% in 2022.13 PMFTC is a joint venture between Philip Morris International (PMI) and the Fortune Tobacco Corporation, the tobacco business of local conglomerate LT Group.14

Japan Tobacco International (JTI) has a market share of 38%, thanks to its 2017 acquisition of local company Mighty Corporation.1315 Together, PMFTC and JTI account for virtually all of the licit cigarette sales in the country.13

PMI’s flagship brand Marlboro is the most popular brand of cigarette, with a share of nearly 33% in 2022. In second place is another PMFTC brand, Fortune International, with a share of nearly 17%. JTI’s Winston is third, with a market share of around 14%. All other brands have market shares of less than 10%.16

At nearly 23%, the Philippines has one of the largest market shares for menthol cigarettes in the world.1718 Menthol cigarettes have been marketed in the Philippines since at least the 1970s, including in campaigns targeting young women.19 In more recent times, the menthol market share has increased year on year since 2014. Similarly, though the market for flavour capsule cigarettes is much smaller than for menthol, it has also been growing steadily, with yearly increases since 2015.17 These products are often more attractive to youth and young adults than conventional cigarettes; menthol in particular is associated with increased smoking initiation.18

Tobacco farming and child labour

Since the early 1960s, tobacco production in the Philippines has remained roughly stable, at between 40,000 and 70,000 tonnes a year. However, between 1981 and 1993 it increased to between 74,000 and 118,000 tonnes. Conversely, between 2006 and 2009 it dipped below 40,000, to a low of 32,000 tonnes in 2008.20


Figure 1: Tobacco production, 1961 to 2021.20 Source: UN Food and Agriculture Organization/Our World in Data | CC BY

Research has demonstrated that tobacco growing is not a profitable enterprise for most farmers. Despite this, farmers continue to grow tobacco due to a belief in its profitability and the reliability of the tobacco market; its perceived resilience to bad weather compared to other crops; and, in particular, access to credit.21 Filipino farmers interviewed for a study published in 2019 stated that tobacco farming allowed them to take out loans to which they would not have had access had they been growing other crops. Loans were also used to cover non-agricultural expenses such as school fees, buying food, and paying off other loans.21

As part of the Sin Tax reforms, 15% of the revenue collected from tobacco taxes is allocated to tobacco-growing communities to promote economically viable alternatives.22 However, this remains a challenge. Farmers have cited lack of capital, difficulties accessing credit, an absence of technical support and a perceived lack of markets for other crops as reasons for not transitioning away from tobacco.21

Tobacco is also one of 13 commodities produced in the Philippines which feature on the U.S. Department of Labor’s 2022 List of Goods Produced by Child Labor or Forced Labor.23 However, comprehensive and up-to-date information on child labour in Philippine tobacco farming is not available.

Tobacco and the economy

The Philippines is a net importer of raw tobacco, importing about US$243 million of raw tobacco in 2022, compared to exports of around US$184 million.2425 However, the country is a net exporter of cigarettes, with exports in the same year of over US$232 million, compared to about US$22.6 million in imports.2627

Illicit trade

Illicit tobacco was estimated to form around 16% of the market in the Philippines in 2018.5 Though this is above the likely global average of 11 to 12%, it has changed little since 1998.528 Though industry-funded studies found significant increases in the Philippine illicit tobacco trade following the introduction of the Sin Taxes in 2013, there is no independent evidence to support this.5

Tobacco and the environment

The WHO reports that curing in tobacco agriculture is a leading cause of demand for wood from native forests in the Philippines.29

Farmers cultivating the native batek variety of tobacco in the southern Philippines have been documented as using several toxic agrochemicals to control pests. These include some listed as hazardous by the WHO, such as cypermethrin and methomyl.30

It has been estimated that between 30 and 50 billion cigarette butts are littered every year in the Philippines – 12.5 million on the resort island of Boracay alone.31 Boracay was closed for six months in 2018 for environmental rehabilitation, resulting in billions in lost revenues for both government and the private sector.3132

Roadmap to Tobacco Control

The Philippines ratified the WHO FCTC in 2005 and the treaty entered into force later that year.3334 WHO FCTC ratification was a catalyst for strengthening tobacco control laws in the country and reducing industry influence on policy.34 However, the Philippines is not a party to the Protocol to Eliminate Illicit Trade in Tobacco Products.35

The Tobacco Regulation Act of 2003 (RA 9211) is the country’s main tobacco control law, covering areas such as smoking in public places; tobacco advertising, promotion and sponsorship; and sales restrictions. Subsequent legislation built on the 2003 law, introducing further regulation on issues such as designated smoking areas, advertising and the packaging and labelling of tobacco products.36

However, given that RA 9211 was enacted just three months before the Philippines signed the WHO FCTC, Filipino tobacco control advocates have argued that the law was both timed and designed to pre-empt the Convention. This has resulted in tobacco control regulations which, nearly 20 years later, still fall some way short of WHO FCTC requirements.737 Designated smoking areas are still permitted in indoor offices and workplaces; restaurants; and cafés, pubs and bars. Restrictions on tobacco advertising, promotion and sponsorship remain incomplete. And at 50.6% of the retail value of the most popular brand of cigarettes, tobacco taxation is significantly below the 75% threshold recommended by the WHO.8

The tobacco industry, led by the Philippine Tobacco Institute (PTI), has also used RA 9211 as justification for delaying the introduction of more WHO FCTC-compliant measures (such as graphic health warnings), arguing that such measures contravene existing Philippine law.3738

In August 2020, the joint House Committees on Trade and Industry and on Health approved a bill regulating manufacture, sale and use of e-cigarettes and heated tobacco products (HTPs).39 This bill reversed an earlier decision to raise the purchase age from 18 to 21 and restrict flavourings to tobacco and plain menthol. It also shifted responsibility for regulation of these products from the Food and Drug Administration to the Department of Trade and Industry. Eight days after the bill was approved, the first of four stores dedicated to PMI’s flagship HTP IQOS opened for business.40

This bill was a precursor to the Vaporized Nicotine and Non-Nicotine Products Regulation Act, which eventually became law in July 2022. E-cigarettes in hundreds of different flavours reportedly flooded the Philippine market in the months following the passage of the law.41 Leading Filipino tobacco control advocates argue that the law has undermined recent gains in tobacco control.40

For more details, please see the following websites:

Tobacco Industry Interference in the Philippines

Recent tobacco industry tactics in the Philippines include attempting to influence the committee responsible for overseeing tobacco control in the country; corporate social responsibility, particularly during the COVID-19 pandemic; and attempts to influence policy, including by establishing relationships at the very top of government.

Conflict of interest

The Philippines’ main tobacco control law, RA 9211, requires the government to implement a “balanced policy”, given that:

“It is the policy of the State to protect the populace from hazardous products and promote the right to health and instill health consciousness among them. It is also the policy of the State, consistent with the Constitutional ideal to promote the general welfare, to safeguard the interests of the workers and other stakeholders in the tobacco industry.”42

However, the first principle of the implementation guidelines for Article 5.3 of the WHO FCTC states that “There is a fundamental and irreconcilable conflict between the tobacco industry’s interests and public health policy interests.”43 Any requirement for “balance” can only therefore hinder progress on tobacco control and undermine public health.

This may be seen in the composition of the Interagency Committee on Tobacco (IAC-T), a multisectoral body established by RA 9211 responsible for overseeing implementation of the legislation.42 One seat on the IAC-T is reserved for the National Tobacco Administration (NTA) – a government agency that sits within the Department of Agriculture – which has a mandate to “Promote the balanced and integrated growth and development of the tobacco industry to help make agriculture a solid base for industrialization.”44

Another seat is reserved for a representative of the tobacco industry, specifically the Philippine Tobacco Institute (PTI), an association whose members over the years have included PMFTC and JTI, among others.42454647 The PTI has a long history of undermining tobacco control measures, including successfully managing to reduce the size of graphic health warnings on tobacco products, opposing tobacco tax reforms and litigating over tobacco control regulations against public bodies such as the City of Balanga and the Department of Health.464849

Tobacco control advocates have called repeatedly for the removal of the PTI from the IAC-T, citing conflict of interest and alleging that it uses its position to actively weaken tobacco control policies.465051 The WHO has supported this position, stating that the composition of the Philippine IAC-T “is blatantly in conflict with WHO FCTC Article 5.3”, which requires parties to protect their public health policies against the commercial and other vested interests of the tobacco industry.52

Corporate social responsibility

As of 2023, there was still no ban on tobacco industry corporate social responsibility (CSR) in the Philippines.8 The tobacco industry has taken advantage of this shortcoming to try to enhance its reputation and influence both policy makers and the general public.

From 2017 to 2021, PMI spent nearly US$38 million on CSR in the Philippines. Nearly US$31 million of this total was spent in 2020 and 2021 alone.53 Much of this funding is channelled through the Jaime V. Ongpin Foundation (JVOFI), a development NGO and partner of “Embrace”, PMFTC’s CSR programme.5354 During 2020, in the first months of the COVID-19 pandemic, JVOFI distributed ambulances, ventilators, PCR machines for COVID-19 testing, personal protective equipment, food supplies and rapid test kits throughout the country.54

PMI was far from the only tobacco industry player carrying out this kind of work: by mid-April 2020, the LT Group – PMI’s partner in joint venture PMFTC – had spent PHP₱200 million (around US$4 million) on COVID-19 assistance.54 The LT Group implements such initiatives in the Philippines via its CSR arm, the Tan Yan Kee Foundation.55 Also in April 2020, Japan Tobacco International (JTI) donated 20,000 face masks to hospitals in the province of Batangas, where its manufacturing facilities are located.54

An investigation published by the media and business intelligence organisation Eco-Business in 2021 revealed that a number of congressional representatives were involved in the distribution of COVID-19 relief donated by the tobacco industry and its associates.40 These donations also coincided with several debates in Congress which addressed regulation for newer nicotine and tobacco products (see section “Roadmap to Tobacco Control”).4037

Both PMI and JTI also lobbied the Philippine Ministry of Finance for permission to continue their operations as normal during lockdown, though cigarettes were not considered to be an essential item.54 In an April 2020 press release, JTI argued that lockdown restrictions were forcing smokers to buy illicit tobacco; were resulting in lower tax revenues for government; and were harming retailers, especially small and family-run businesses.56 Restrictions on the transport and delivery of tobacco products were subsequently lifted.57

This shows how industry arguments around the illicit trade were accepted by Filipino policy makers, allowing tobacco companies to operate even during an outbreak of a lethal respiratory disease to which smokers are more vulnerable.58

Unnecessary interaction with high level officials

Hailing from the Ilocos region, where tobacco is a major cash crop, President Ferdinand “Bongbong” Marcos Jr. has met with PMI at least twice since becoming president in June 2022.4159 The most recent of these meetings was a lunch he and First Lady Liza Araneta-Marcos hosted for PMI executives – including CEO Jacek Olczak – at the Malacañang Palace in November 2022, the first time a company CEO has been received at the Philippine presidential palace. Also present were PMFTC president Denis Gorkun and LT Group CEO Lucio Tan III.41

PMFTC’s director for global communications stated that the aim of the meeting was to outline the company’s plan “to expand our economic footprint in the Philippines.”41 PMI is reportedly investing US$150 million in the expansion of a manufacturing plant in Tanauan, Batangas. The new wing of the factory is to be used for the production of BLENDS, tobacco sticks used exclusively in PMI’s BONDS, a more affordable version of its flagship HTP IQOS.41

In 2012, the then Senator Marcos was photographed during a Senate debate on the Sin Taxes speaking to a lawyer representing PMFTC.6061

Relevant Links

Tobacco Tactics Resources

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References

  1. ↑Campaign for Tobacco-Free Kids, Tax Reform Case Study: Philippines, 2017
  2. ↑Republika Ng Pilipinas, Republic of the Philippines Department of Health, Philippines Statistics Authority, Global Adult Tobacco Survey: Country Report 2015
  3. ↑abcdeRepublic of the Philippines Department of Health, Philippine Statistics Authority, World Health Organization Philippines et al, Global Adult Tobacco Survey, Fact Sheet, Philippines 2021, 29 November 2022
  4. ↑Department of Finance, New tobacco tax reform law to ensure expanded healthcare for poor families, Government of the Philippines, 28 July 2019, accessed July 2023
  5. ↑abcdM.P. Lavares, H. Ross, A. Francisco et al, Analysing the trend of illicit tobacco in the Philippines from 1998 to 2018, Tobacco Control 2022;31:701-706, doi: 10.1136/tobaccocontrol-2020-056253
  6. ↑L.V.C. Sese, M.C.L. Guillermo, E-Smoking out the Facts: The Philippines’ Vaping Dilemma, Tob Use Insights, 2023 Apr 21;16, doi: 10.1177/1179173X231172259
  7. ↑abR. Lencucha, J. Drope, J.J. Chavez, Whole-of-government approaches to NCDs: the case of the Philippines Interagency Committee—Tobacco, Health Policy and Planning, Volume 30, Issue 7, September 2015, pp. 844–852, doi: 10.1093/heapol/czu085
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  10. ↑abcdeRepublic of the Philippines Department of Health, Epidemiology Bureau, World Health Organization Western Pacific Region et al, Global Youth Tobacco Survey, Fact Sheet, Philippines 2019, 14 April 2021
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  20. ↑abFood and Agriculture Organization of the United Nations, Tobacco production, 1961 to 2021, Our World in Data, accessed July 2023
  21. ↑abcA. Appau, J. Drope, F. Witoelar et al, Why Do Farmers Grow Tobacco? A Qualitative Exploration of Farmers Perspectives in Indonesia and Philippines, Int J Environ Res Public Health, 2019 Jul 2;16(13):2330, doi: 10.3390/ijerph16132330
  22. ↑C. P. Agustin, P.R. Cardenas, J.B. Cortez et al, The Effects of the Sin Tax Reform Law of 2012 to Tobacco Farmers of Amulung, Cagayan, International Journal of Advanced Research in Management and Social Sciences, Vol. 6, No. 12, December 2017
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  39. ↑Two House committees pass e-cigarette and heated tobacco bill, Manila Standard, 28 August 2020, accessed June 2023
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