Mindanao flagged as hotspot for cigarette smuggling — study

MANILA (November 13)  — Mindanao has become a major hotspot for illicit tobacco trade, with smuggled and untaxed cigarettes flooding markets in Zamboanga and General Santos, a new study warned.

According to the Action for Economic Reforms (AER), nearly 8 in 10 cigarette packs sold in Zamboanga (79.5%) and almost 4 in 10 in General Santos (38.5%) were illicit — far higher than levels in Luzon and Visayas.

“These numbers are alarming,” said AER lead researcher Daffodil Santillan. “The problem is not high taxes — it’s weak enforcement at our borders and ports.”

Many of the cigarettes, including Cannon Menthol 100s and Fort Menthol 100s, had no BIR tax stamps or health warnings and were traced to Indonesia, Thailand, the UAE, and the UK. Some were sold below the legal floor price, a clear sign of tax evasion.

The study also found that Zamboanga and General Santos, both busy port cities, serve as entry points for smuggled goods disguised within legitimate shipments — a practice often referred to locally as “backdoor trading.”

AER urged stronger enforcement and reforms, including:

• A national licensing system for all tobacco retailers,
• A digital track-and-trace system for tax stamps,
• And police deputization to help the BIR shut down stores selling illicit products.

The group warned that cigarette smuggling not only hurts public health but also robs the government of billions in tax revenues — an estimated ₱52 billion annually.