The Association of Southeast Asian Nations (ASEAN) should tighten export controls and harmonize requirements for tobacco products to curb illicit trade that is costing governments billions in lost revenues, JTI Philippines (JTIP) said.
JTIP Director for Fiscal and Regulatory Affairs Mario Zinampan said stronger regional rules could close gaps that allow legally produced tobacco products to be diverted into illicit channels across borders.
“Illicit tobacco trade is a regional problem that requires a coordinated regional response,” Zinampan said at the Economic Journalists Association of the Philippines annual economic forum.
Under the proposed framework, export shipments would have to comply not only with regulations in the country of origin but also with fiscal, packaging, labeling, tax-marking, and other requirements in destination markets.
JTIP said the approach could strengthen export verification and customs enforcement while making it harder for illicit traders to exploit regulatory differences among ASEAN markets.
The stakes are substantial. Citing a Euromonitor study, JTIP said the Philippine government lost an estimated P141 billion in revenues over the past two years, with illicit cigarettes accounting for one in four cigarettes sold in the country.
Across six ASEAN markets, illicit tobacco was estimated to have cost governments USD 13.1 billion, or about P739 billion, in lost revenues in 2024 and 2025.
Indonesia suffered the largest estimated loss at USD 5.6 billion, while Malaysia and the Philippines each lost about USD 2.5 billion.
JTIP warned that the damage extends beyond government coffers, affecting legitimate businesses, tobacco farmers, law enforcement, and confidence in regional markets.
The incidence of illicit tobacco across the covered markets is projected to rise to 27.8 percent by 2028 from 23.6 percent in 2025, it said.
Zinampan said ASEAN could consider a declaration harmonizing rules for high-risk and sensitive goods, alongside stronger customs cooperation, information sharing, export verification, and track-and-trace systems.
“Because the problem crosses borders, the solution must also cross borders,” he said.
For ASEAN, the challenge is increasingly about making sure regulatory borders do not become weak links that illicit traders can exploit.
