‘Tobacco exports keeping industry alive’

MANILA, Philippines — Exports of quality-grade Philippine tobacco have resuscitated the barely surviving industry that has been hit hard by the government’s Tax Reform for Acceleration and Inclusion (TRAIN) law, which was tasked to fund the country’s universal health care program. 

“We are not a sunset industry because we have a lot of orders from other countries,” administrator Robert Seares of the National Tobacco Administration told the crowd at the Miss Virginia Tobacco Festival 2019 held recently in Candon City.

He nevertheless admitted that government’s decision to impose higher excise tax is the problem of the tobacco industry.

“We used to have 127 billion cigarette sticks, which is now down to 73 billion sticks,” he added.

“Our 52,000 tobacco farmers are now also down to 36,000. Our former 36,000 hectares of land where we plant tobacco is now only 22,000,” Seares shared.

“We will appeal to lawmakers not to use our tobacco funds for the universal health care,” he added.

He appealed to lawmakers to put safety nets so that farmers would not be displaced.

“We used to produce 65 million kilos of tobacco leaves per year, but now it is only 40 million kilos,” he lamented. 

The tobacco industry in northern Luzon is feeling the crunch borne out of the national government’s imposition of the TRAIN law, but administration lawmakers still believe it is not a dying industry. 

“The demand has dropped significantly that we even had to teach our farmers how to plant other agricultural products. They plant palay during rainy season and plant corn and tobacco during summer,” said Ilocos Sur Rep. Eric Singson. 

According to the lawmaker, their usual production of 50 million kilos of tobacco leaves per annum has dwindled by half, and withdrawals of taxed cigarettes in the Bureau of Internal Revenue also had a slump of about 30 percent. 

“We don’t want the industry to die,” Singson said, noting that high-grade tobacco now costs P90 per kilo while low-grade costs half the price, and a kilo of corn is only pegged between P12 to P14. 

“But we’re not losing hope, we just have to be able to strike a balance. We also understand that government needs to raise funds for its Build, Build, Build projects and finance the universal health care as well. We’ll just have to bear it, there’s nothing we can do,” he added. 

The TRAIN law (Republic Act 10963) is the initial package of the Comprehensive Tax Reform Program of President Duterte, where funds sourced from taxing cigarettes will be used to finance the country’s Universal Health Care program for all Filipinos. 

“This may mean less profit, but we will see to it that we will continue to help the tobacco farmers of Ilocandia,” Singson said.