Report Former Senate President Franklin Drilon Voices Concerns Over Rising Cigarette Smuggling

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Franklin Drilon, known for authoring the Sin Tax Reform Law (RA 10351), has expressed grave concern over the increasing incidence of cigarette smuggling in the Philippines. This illegal activity not only undermines the government’s tax revenue efforts but also thwarts public health initiatives aimed at reducing smoking rates.

 

Drilon highlighted the issue, stating, "I see it every day in television news and newspaper reports about the arrests being made by our law enforcement agencies against people engaged in the business of manufacturing and selling non-tax paid cigarettes. For me, this is very alarming." His pivotal role in passing RA 10351 in 2012 reformed excise taxation on alcohol and cigarettes, yielding a simpler structure and higher tax rates to boost government revenue.

 

The legislation, celebrated by the anti-smoking community, led to a notable increase in tobacco tax collection—from Php33 billion in 2012 to Php72 billion in 2013—and a 17% reduction in cigarette volume. The World Health Organization's Western Pacific Regional office recognised Drilon's efforts with the Medal of Honor in 2013.

 

However, recent data from the Bureau of Internal Revenue (BIR) paints a worrying picture. Excise tax revenues from cigarettes have seen consecutive declines, with a 9% drop in 2022, further exacerbated by a significant 23% decrease in 2023. Last year alone, revenue fell by 26%, translating to a loss of Php130 billion compared to the Php176 billion collected in 2021.

 

Drilon articulated his concerns: "Cigarette smuggling is a big problem for the government. Firstly, it deprives the government of huge tax revenues, which can be used for various government projects and to fund PhilHealth. Secondly, it defeats our public health objective of bringing down smoking rates."

 

In his tenure as Senator, Drilon championed anti-smoking measures, advocating for cigarette excise tax hikes and the implementation of graphic health warnings on cigarette packaging. His call to action underscores the need for stringent enforcement against smuggling to safeguard public health and ensure essential government funding.

 

  Adapted by ASEAN Now from Manila Bulletin 2025-05-14