Smoking curbs fail in the
Philippines By Cher S Jimenez
MANILA - US-based tobacco giant Philip
Morris International (PMI) rolled out a US$300
million tobacco factory in the Philippines in
2003, then the company's single biggest investment
in Asia. The plant, in a township south of Manila,
now produces 30 billion cigarettes annually but
faces growing resistance to expanding that
lucrative local market.
In the same year
that the plant opened, anti-smoking groups notched
a major advocacy victory with the passage of the
Philippine Tobacco Regulations Act (PTRA). The
law, a product of around three decades of
campaigning by mostly non-governmental groups on
the health risks of smoking, heavily restricts the
sale and promotion of tobacco, especially among
youth, and legally bans
smoking in all public areas.
Despite that
legislation, cigarette consumption nine years
later is still high in the Philippines, with over
one-third of the population regularly puffing. The
country has the second-highest tobacco consumption
rate in Southeast Asia, lagging only Indonesia.
The World Health Organization (WHO) and the
Department of Health (DoH) estimate
smoking-related illnesses and productivity losses
cost the Philippines over 300 billion pesos (US$7
billion) per year - an estimate the local tobacco
lobby has questioned.
The DoH has blamed
tobacco companies' strong influence over
Philippine politics, including compromised
legislators, as one main reason why
tobacco-control regulations have failed to deter
smokers. A senior government health official in an
interview with Asia Times Online accused some
legislators of receiving funds from pro-tobacco
lobbyists to attend committee hearings and block
the introduction of new tobacco controls and
taxes.
"What used to be simple committee
hearings that would be run by two to three
congressmen attended by no more than 20 are now
having 30 congressmen in attendance," said the
senior official, who requested anonymity. "They're
no longer ashamed of saying that they're also paid
off by the lobby," the official claimed. The
health committee and the ways and means committee
are the two bodies in congress that hear proposed
anti-tobacco legislation.
Maricar Limpin,
executive director of Framework Convention on
Tobacco Control Alliance Philippines (FCAP), a
non-governmental organization, said local
cigarette firms conduct "direct lobbying" by
approaching legislators to vote against any new
anti-tobacco initiatives.
She claimed that
at least one influential person who previously
served as a legal counsel for a tobacco firm has
blocked various legislative proposals to stiffen
existing tobacco controls.
"Whenever
there's a hearing, even on the committee level,
they really come in full force," Limpin said,
comparing the high attendance to the frequent
absenteeism among legislators during regular
legislative sessions. Lawmakeres from the
tobacco-growing north of the country, have argued
that further restrictions on the local tobacco
industry would result in massive economic losses
and unemployment among farmers.
Apart from
blocking new regulations and taxes, anti-smoking
advocates here argue that tobacco companies have
failed to fully comply with the PTRA. The industry
is represented in the interagency committee that
oversees the actual implementation of the PTRA,
which anti-smoking advocates say allows tobacco
firms to influence compliance with the law.
Cigarette companies are also known to employ the
country's best-heeled law firms to represent them
in cases related to the PTRA.
PMI, known
locally as Philip Morris Philippine Manufacturing,
or PMPMI, declined to answer questions - including
allegations that the industry maintains influence
over certain congressman - for this article.
PMPMI, which merged with Fortune Tobacco company
in 2010, now controls more than 92% of the
country's US$1.7 billion tobacco market.
Regulatory wrangle Anti-smoking
advocates believe the industry, represented mainly
by PMPMI, is now actively bidding to undermine the
PTRA. Similar restrictions and lawsuits that have
ruled in favor and paid massive damages to smoking
victims in the United States have crippled the
parent company's position there, forcing the
company to seek new markets in the less-regulated
developing world.
It is a business
strategy that has paid huge dividends for PMI in
the Philippines. In 2011, PMI president Chris
Nelson noted in a local television interview that
leaders from tobacco-growing areas have met with
the Metro Manila Development Authority to seek
clarification on the ban on smoking in public
areas. The ban, similar to those imposed in many
Western countries, has been highly criticized and
even challenged in court by industry
representatives.
PMPMI's website says:
"While we support comprehensive, effective tobacco
regulation, we do not support regulation that
prevents adults from buying and using tobacco
products or that imposes unnecessary impediments
to the operation of the legitimate tobacco market.
In that regard, we oppose measures such as generic
packaging, point of sale display bans, total bans
on communications to adult consumers, and bans on
the use of all ingredients in tobacco products."
Around 40 countries worldwide at present
legally require locally sold cigarette packs to
include often graphic picture warnings depicting
the risks of smoking. Similar warnings were
ordered by the Philippine DoH in 2010, but tobacco
companies have challenged the order in court. Two
local courts have issued a restraining order on
the picture warnings while another has decided in
favor of the industry. Tobacco companies also
demanded the removal of then health secretary
Esperanza Cabral, who issued the order and is a
known anti-smoking advocate.
Legislation
that aims to increase taxes for tobacco products,
meanwhile, is still being debated in congress.
Seven different versions of the "sin" tax reform
have in recent years been proposed but dissenters
have stalled the legislation's approval and
implementation.
At the same time, the
tobacco industry has gone into public relations
overdrive. Protobex Asia and Inter-Tabac Asia
2012, reportedly the largest international tobacco
trade fair ever to be held anywhere in the world,
will take place in Manila at the state-run
Philippine International Convention Center (PICC)
later this month. FCAP has protested the move and
asked the government to cancel the event, arguing
that under the WHO's Framework Convention on
Tobacco Control a government facility is not
allowed to hold such an exhibit.
To be
sure, the tobacco lobby was strong even before
PMPMI came to dominate the local market. Research
by the University of Sydney in 2004 referred to
the Philippine tobacco industry as the "strongest
lobby in Asia". The report described how tobacco
firms took advantage of a corruption-plagued
government to advance their interests and thwart
anti-tobacco legislation by making political
donations. More recent studies by anti-tobacco
advocacy groups have underscored and updated the
2004 report's academic findings.
Death
and taxes At the same time, it is debatable
how big an impact tougher anti-tobacco regulations
would have on the wider Philippine economy, as
some legislators have warned. The website of the
National Tobacco Authority, a government office,
estimates the current number of tobacco farmers at
43,960 and about 300, 000 members of their
families as dependent on the tobacco industry. The
figure represents a tiny share of the country's
estimated 40 million workforce.
On the
other hand, the WHO and DoH estimate
smoking-related diseases and related productivity
losses at over 300 billion pesos per year.
Smoking-related deaths are also high, with 10
Filipinos dying of lung cancer, cardiovascular
diseases and stroke every hour, according to the
WHO. The government currently earns around 25
billion pesos per year in taxes from the industry,
an amount that proposed sin tax hikes would aim to
increase substantially.
Lucio Tan, owner
of Fortune Tobacco, the Philippines' largest
tobacco company until its February 2010 merger
with PMI, is among the country's best politically
connected businessmen. Since the merger, Tan and
PMPMI have devised more aggressive measures to
market their tobacco products. Critics say a move
to sell half-sized packages, reduced from 20 to 10
sticks per pack, aims to make cigarettes more
accessible for cash-strapped youth. Already
cigarettes are sold on a per stick basis by
informal vendors on Philippine street corners.
Former health undersecretary Alexander
Padilla believes that Philippine tobacco firms are
now less concerned with targeting adult smokers
and have refocused their marketing on youth as
"replacement smokers because they will be the
future moguls and businessmen who will buy their
products".
Cigarettes are comparatively
cheap in the Philippines, with a pack of 20 sticks
costing roughly 28 to 35 pesos. (Higher taxed
packs in the US now sell for five to 10 times as
much, depending on the particular state.)
Those low prices - and high tobacco
company profits - are directly related to the
exceptionally low taxes imposed on Philippine
tobacco products. The present tobacco tax is
anachronistically based on 1996 retail prices,
when cigarettes cost a mere 5 pesos per pack, way
below the current 35-40 peso per pack rate.
Anti-tobacco lobbyists have continually and so far
unsuccessfully pushed for tax reforms, as measures
taken by other countries prove that higher taxes
and cigarette prices encourages smokers,
especially students, to quit the habit.
The WHO estimates that the Philippine
government could generate revenues as high as 100
billion pesos annually from higher taxes on
cigarettes. Advocate Limpin said President Benigno
Aquino, a smoker himself but sympathetic to
anti-tobacco measures, has suggested the
government could use revenues generated from
higher tobacco taxes for his proposed universal
healthcare plan.
Tobacco firms, however,
are fighting back against higher tax bills and
greater legal liability. In one well-publicized
case, a lower court last year issued a restraining
order against the Metro Manila Development
Authority from apprehending people caught smoking
in public areas, including transport terminals. In
a direct challenge to the PTRA, a PMPMI office
worker and a security guard filed two separate
cases against their arresting officers. Although
they were both charged with smoking in a public
place in their personal capacities, PMPMI paid
their legal fees.
Cher S Jimenez
is a Filipino journalist formerly based in Hong
Kong. She wrote for the Business Mirror in Manila,
Gulf News Manila Bureau, The Associated Press and
GMA7 online. She was a Yuchengco media fellow at
the University of San Francisco where she
conducted research on undocumented Filipino
migrants in 2007.
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