November 2026: PMI to Invest $71 Million in Philippine Smoke-Free Manufacturing Expansion
Philip Morris International (PMI) announced plans to invest ₱4.5 billion (US$71 million) to expand its smoke-free manufacturing facility in Batangas, Philippines, strengthening the country’s role as a regional production and export hub for smoke-free products. According to PMI, the investment will increase domestic manufacturing capacity and support exports to regional markets. Since 2010, PMI has invested more than ₱125 billion (US$2 billion) in the Philippines, while its local affiliate, PMFTC Inc., employs more than 5,000 people.
The company also highlighted the growth potential of the Philippine smoke-free market, where approximately 200,000 adults currently use its IQOS ILUMA heated tobacco and ZYN nicotine pouch products, compared with an estimated 14 million adult smokers. PMI noted that demand for both products is increasing, although broader product availability and consumer education remain important to accelerating adoption. Globally, PMI’s smoke-free portfolio is now available in 110 markets, with more than 43 million adult users worldwide.
August 2026: Value of Seized Illegal Cigarettes and Vapes Reaches ₱11.7 Billion in 2026
The estimated value of illegal tobacco and e-cigarette products confiscated by the Bureau of Customs in 2026 has quadrupled compared to total seizures in 2025, according to data shared by the agency’s Enforcement and Security Services. Customs personnel confiscated nearly ₱11.68 billion (US$200 million) worth of illicit cigarettes and vape products between January and July 2026. The ₱11.680 billion total recorded in the first seven months of 2026 represents a 464% increase over the nearly ₱2.52 billion (US$43 million) worth of products confiscated across the entirety of 2025.
The figures were presented by Enforcement and Security Services during a House of Representatives Committee on Ways and Means hearing. The legislative hearing was convened to review a proposal from the Department of Finance aimed at unifying all excise taxes on cigarette products into a single rate of ₱72.93 (US$1.24), alongside an annual indexation rate of 5% to curb smuggling and align tax revenues with inflation.
July 2026: Philippines Cracks Down on Illicit Tobacco with Over 2,500 Arrests in First Half of 2026
The Philippine National Police (PNP) arrested 2,560 individuals linked to the illicit tobacco trade across 8,986 law enforcement operations during the first six months of 2026. First-half seizures surged by a staggering 645% compared to the same period last year. According to authorities, these operations successfully prevented an estimated ₱26.2 billion ($424.4 million) in foregone government revenues had the black-market cigarettes reached consumers.
The Caraga region in Mindanao has become the nation’s leading hotspot for the illegal tobacco trade, recording the highest volume of police seizures from January to June 2026. During this six-month window, the PNP confiscated ₱3.31 billion ($53.6 million) worth of illicit cigarettes in the region alone. Central Visayas and Central Luzon followed Caraga as the next highest areas for illegal tobacco activity.
The Philippines has increasingly become a fertile ground for the illicit tobacco trade, driven by its vast maritime borders, well-entrenched smuggling routes, low conviction rates, and limited storage facilities for seized goods. The government is estimated to have lost ₱141 billion ($2.28 billion) in total revenue to the illicit tobacco trade over the past two years. This includes ₱23 billion ($372.6 million) lost specifically to illegal e-vape sales. Alarmingly, an estimated 86% of all e-vapes sold in the Philippines are illicit, highlighting a massive and ongoing source of tax leakage for the state.
June 2026: Philippines Seizes US$120 Million in Illicit Tobacco and Vape Products in 2026
The Bureau of Customs (BOC) has seized approximately ₱7.2 billion (US$120 million) worth of illicit tobacco and e-cigarette products since January 2026, as authorities intensify intelligence gathering and enforcement operations. The total includes ₱5.6 billion worth of illicit cigarettes and other tobacco products, alongside ₱1.6 billion worth of illegal vape and e-cigarette products.
Officials expect seizures to increase further by the end of the year as monitoring at ports is strengthened and authorities expand investigations into the importation of machinery used to manufacture illicit tobacco products. Separately, the Bureau of Internal Revenue (BIR) estimates that cigarette smuggling and tax evasion cost the government between ₱40 billion and ₱52 billion annually. The agency also reported that around four million new smokers have emerged in the Philippines over the past two years.
June 2025: Japan Tobacco will expand the capacity at the Batangas factory
Japan Tobacco (JT) is planning to further expand the capacity at the Batangas factory to supply the export markets and to potentially manufacture reduced-risk products (RRPs). Currently, the manufacturing facility in Malvar, Batangas exports cigarettes to at least 17 countries, mostly in the Asia-Pacific. Since this factory was established in 2016, the facility has undergone several rounds of capacity upgrades and improvements to better serve both the domestic and export markets.
In November 2024, JTI launched the heated-tobacco product Ploom X Advanced in the Philippines. JT manufactures heated tobacco sticks for the Ploom platform in Japan and Poland. JT sees the global tobacco industry’s overall sales volume declining by an average of 1% per annum during the 2022-2035 period as combustibles drop by a faster 2.5% rate. In the same period, heated-tobacco segment is projected to grow at about 8% per annum to offset some of the decline in cigarette volume.
May 2025: ZYN nicotine pouches are now avilable in over 1,500 stores in the Philippines
Philip Morris International (PMI) launched ZYN in the Philippines in 2023. Over the past two years, ZYN has expanded its availability to over 1,500 stores nationwide, including in Cebu, Sta. Rosa, and Davao. Most recently, ZYN hosted the ZYN Summer Experience in La Union, one of the Philippines’ most iconic summer destination, in ealy-May 2025 to showcase the convenience and freedom of ZYN nicotine pouches. The weekend featured coffee-infused sessions to energize the mornings as well as sunset sessions to conclude the days with the aim to highlight the versatility and ease of ZYN pouches.
ZYN is a popular nicotine pouch brand. ZYN pouch is a slim product made of a tea bag-like material, contain plant-based fibres, flavouring, and nicotine extract that can be used orally by placing the pouch under your upper lip.
Meanwhile, Japan Tobacco (JT) reported an explosive 23% month-on-month growth in Nordic Spirit nicotine pouch sales in the Philippines. JT became the first tobacco major to launch a nicotine pouch product in the Philippines in May 2023. Nordic Spirit is currently available in the Philippines at 7-Eleven, Uncle John’s Lawson, The Marketplace, Lighters Galore, Food Panda, and Swebest. It can also be purchased online via Lazada and Shopee. Nicotine pouches are available in two formats: can of 20 nicotine pouches, retailing at ₱135 (US$2.4), and pocket pack of 5 nicotine pouches, retailing at ₱35 (US$0.63).
According to a recent JT survey of 7,000 consumers, 80% of the respondents reported a positive experience using nicotine pouches. Consumers appreciate the product’s convenience and discreetness the most – the fact that it can be used in the office, in the car, or on a flight.
September 2024: The Bureau of Internal Revenue (BIR) prohibits sale of vape, cigarettes, heated tobacco below the floor price
According to the amended Section 145 (C) of the National Internal Revenue Code (NIRC), it is prohibited to sell cigarettes, vapor products, and heated tobacco products below the floor price, determined by the excise and value-added taxes combined.
The updated the floor prices for cigarettes, vapes, and heated tobacco products, according to the Revenue Regulation No. 16-2024, are as follows:
The Bureau of Internal Revenue (BIR) reminds e-marketplaces, online sellers, retailers, and distributors of tobacco products that sellers below the mandated floor price “shall be punished with a fine of not less than 10 times the amount of excise plus value-added taxes due, but not less than P200,000 nor more than P500,000 (no upper limit for heated tobacco products and vapes), and imprisonment of not less than four years but not more than six years”.
July 2024: The Philippine Supreme Court upholds the FDA’s authority to regulate tobacco products
The Supreme Court upheld its 2021 decision to grant the Food and Drug Administration (FDA) regulatory authority over the health aspects of tobacco products. “All products affecting health, including tobacco products, are covered by the FDA’s mandate to ensure the safety, efficacy, purity, and quality of health products.Thus, the inclusion of tobacco products in the implementing rules of the FDA Act is in accordance with the law, the Supreme Court noted.
The case dates back to the petition for declaratory relief that a tobacco industry associated organization filed before the Regional Trial Court (RTC) in 2011. The organization’s aim was to stop the FDA enforcement on the basis that tobacco products are improperly classified as health products and placed under the FDA’s regulatory authority. In 2012, the RTC nullified the provisions that included tobacco products and the tobacco industry under the authority of the FDA. Subsequently, the Department of Health (DoH) and the FDA to file a petition for review before the Supreme Court, which then overturned the RTC decision in 2021.
July 2024: Tobacco Tracking Legislation Advances in Philippines
The House Ways & Means Committee approved a bill that calls for enhanced tracking of the flow of tobacco products through the supply chain. Under the measure, tobacco companies will be required to implement a digital tracking system on cigarette products as a deterrent to the illicit tobacco trade. Cigarette packs, electronic vapes, and related products would be affixed with a stamp, allowing authorities to determine where and when the product was manufactured. The National Government estimates a lost revenue of ₱220 billion in the past four years1.
April 2024: Philip Morris International (PMI) plans to use Philippine leaf in its smoke-free products
Philip Morris International (PMI) plans to use the Philippines-grown tobacco leaves in its smoke-free products following the inauguration of the ₱8.8-billion expansion of PMFTC’s factory in Tanauan City, Batangas. PMI states that tobacco growers in the Philippines can deliver the quality and consistency required for the tobacco leaves to be used in smoke-free products2.
PMFTC’s annual tobacco requirement is worth more than US$120 million. PMFTC currently mixes local tobacco leaves with imported tobacco varieties to create different cigarette blends. PMI also uses the exported Philippine tobacco in cigarettes sold in more than 100 markets.
PMFTC’s factory expansion will be produce the heated tobacco sticks under the BLENDS brand – to be used with the BONDS device – for the domestic market. At a later stage, BLENDS sticks will also be exported to the nearby Asian countries. “BONDS by IQOS” is PMI’s affordable, compact and low-maintenance heated tobacco device.
The ₱8.8-billion investment was first announced in 2022 by PMI and is expected to create as much as 220 new specialized jobs. This is PMI’s largest smoke-free category investment to date in the Philippines.
Background:
With a population of 117 million (the 13th most populous country in the world), a median age of 25 years, and an annual population growth rate of 1.5%, the Philippines serves as a key strategic growth market in the Asia-Pacific region for major tobacco companies. PMFTC (Philip Morris Fortune Tobacco Corporation), a 50-50 joint venture formed in 2010 by Philip Morris International (PMI) and local conglomerate LT Group, controls 47.3% of the country’s 46 billion-stick market. The Philippines ranks among PMI’s top-10 markets globally by volume, accounting for 22.0 billion sticks total, composed of 21.5 billion cigarettes and 0.5 billion heated tobacco sticks.
However, a booming market for cheap and smuggled cigarettes, driven by higher excise taxes imposed by the government, has caused legal cigarette volume to shrink rapidly. The legal market more than halved over the past decade, plummeting from 109 billion sticks in 2012 to 45 billion sticks in 2024. Nevertheless, increased enforcement actions against illicit trade started to bear fruit in 2025, enabling the legal market to record its first year-on-year growth (+3.4%) in more than a decade.
