MANILA – The Philippines lost an estimated P141 billion in government revenue due to illicit tobacco trade between 2024 and 2025, according to a new study cited in a media report.

The report, based on findings by the European Union–ASEAN Business Council (EU-ABC) and Euromonitor International, also showed that 86 percent of e-vapes sold in the country were illegal, pointing to significant gaps in regulation, taxation, and enforcement.

It estimated that illegal tobacco operators earned around P127 billion during the same period, including about P23 billion from illicit vape sales. The Philippines was also identified as having the highest share of illicit vape products among Southeast Asian countries where vaping is legal.

Illicit e-vapes were defined in the study as non-duty paid, non-compliant products or those sold despite regulatory restrictions, placing them outside government monitoring and taxation systems.

EU-ABC Executive Director Chris Humphrey said tax policy must be carefully designed to avoid pushing consumers toward illegal markets.

“If it’s too big, it becomes a shock to the market… all you’re doing is forcing more people into the illicit market,” Humphrey said.

He added that a multi-year and more predictable tax system could help both consumers and legitimate businesses adjust gradually, while stressing that enforcement remains crucial.

The report also noted that a complex tax structure across tobacco and nicotine products may create loopholes that facilitate illicit trade.

Humphrey said many consumers may unknowingly buy illicit vape products, which are widely sold through physical stores and online platforms, including social media, messaging apps, and e-commerce sites.

He also cited the country’s geography as a challenge to enforcement, with multiple entry points for smuggled goods through ports, maritime routes, and free-trade zones.

“A lot of it are driven because it’s a new product… people are just curious about the product itself,” he said, referring to demand drivers for illicit vapes.

However, the report clarified that it did not establish a direct causal link between taxes, access, or regulation and the rise of illicit sales.

On health concerns, the study warned that unregulated vape products may contain higher levels of toxic chemicals and heavy metals due to the absence of safety standards and regulatory oversight.

“In short, yes—because they’re not regulated. You’re not controlling their complete manufacture… you’re not controlling what’s inside the vapes,” Humphrey said.

“If you’re running an illicit vape business, you care less about what’s inside it… all you’re caring about is making the money,” he added.

The findings come as the Department of Health pushes for stricter vape regulations amid concerns over youth vaping and vaping-related illnesses such as e-cigarette or vaping use-associated lung injury (EVALI).

Humphrey cautioned against outright bans, saying these could further expand illegal markets, and urged governments to balance taxation, regulation, and enforcement efforts.

He also called for stronger coordination among ASEAN countries, stressing that illicit tobacco trade remains a cross-border issue requiring regional cooperation.