The country’s tobacco industry is not a “sunset industry,” at least not during the administration of President Benigno S. Aquino III.
This was the forecast made by National Tobacco Administration (NTA) chief, Edgardo D. Zaragoza during the agency’s 24th anniversary the other day (July 26) at Quezon City, attended by employees, farmer leaders, and representatives of the country’s wholesale tobacco distributors.
“We cannot deny that the Philippines is a signatory to the World Health Organization Framework Convention on Tobacco Control (WHO-FCTC) that provides for a gradual elimination of tobacco because of health concerns. It is ironic because despite regulations in the US and Europe, it appears there is still growing demand for tobacco,” Zaragoza said in his speech.
He revealed that tobacco production value has continuously increased by an average of 20 percent in the past eight years. From an estimated 74 million kilos in the 2010 cropping season, production has increased to about 77 million kilosin 2011, and is expected to further increase to 80 million kilos in 2012.
A table provided by the NTA’s regulation department on the estimated tobacco production for crop year 2010-2011 reveals that the country has produced 43 million kilos of Virginia tobacco, worth P3.096 billion; 20 million kilos of burley, worth P1.36 billion; and 14 million kilos of native tobacco, worth P588 million. The estimated totals amount to 77 million kilograms, equivalent to P5.044 billion.
Volume of tobacco produced in crop year 2010 totalled 73.756 million kilograms, which showed a 26 percent increase compared to the 2009 volume of 58.571 million kilograms. In terms of value, this is equivalent to a 20 percent increase, from P4.024 billion in 2009 to P4.846 billion in 2010.
Of these figures, Zaragoza said tobacco farmers have contributed over P34 billion in taxes to the government, with tobacco traders and cigarette manufacturers contributing about four percent to revenues being collected by the Bureau of Internal Revenue.
Zaragoza added there is a worldwide glut for tobacco and tobacco products, but the demand for Philippine tobacco continues to increase because of the high quality it offers. He said over 45 percent of the country’s tobacco production are being exported.
The world’s largest cigarette manufacturer, Phillip Morris, and the world’s largest tobacco dealer, Universal Leaf, believe the country’s tobacco market will continue to be viable in the next five years, Zaragoza said.
As this developed, lawyer Raul Academia of Phillip Morris Philippines Inc. outlined the problems besetting the tobacco industry, as he asked tobacco farmer leaders to unite in facing the challenges being experienced by the industry.
Academia said there are plans to increase excise taxes on cigarettes from an average P5 to P6 per pack to about P30 per pack. “Saan pupulutin ang tobacco industry kung magkakaroon ng 500 percent increase sa buwis?” he said.
On the nationwide campaign to stop smoking, he said the firm recognizes that cigarette smoking has its adverse effects on people’s health, but it is best left to the people’s choice on whether to smoke or not. “Kailangan lang nating ipaalam ang mga epekto nito upang makagawa ang mga tao ng tamang desisyon,” he added.
He also questioned local government regulations designating open spaces as no-smoking areas saying it is against the law. He said the designation of absolutely smoke-free areas should also be coupled with the designation of smoking areas.
Administrator Zaragoza, for his part, vowed to establish financial stability for the agency amidst declining budget allocations and subsidies from the government.
He said the agency shall continue to uphold the welfare of 50,000 direct farmers who still engage in tobacco growing, and over 600,000 other individuals benefitting from the industry. “Tutulong tayo habang may mga magsasaka pang nagtatanim ng tabako,” he said. Edgardo D. Zaragoza, Administrator, DA-NTA
