Tobacco firm’s plan to produce cheaper cigarettes bucked

MANILA, Philippines - The plan of tobacco giant Philip Morris Fortune Tobacco Corp. (PMFTC) to manufacture cheaper cigarettes is being opposed by the Department of Health (DOH) as this would weaken the sin tax law.

Health Undersecretary Ted Herbosa said the scheme is a ploy to skirt around the sin tax law, which was designed to increase the taxes for tobacco and alcohol products.

“If you lower the price of the premium brand, you will just tempt young people into smoking. That is being done to undermine the law,” Herbosa said in a recent forum.

Reports showed the PMFTC was planning to come up with lower-priced cigarettes to be able to compete with local brands.

Some smokers have shifted to the cheaper brands since the prices of premium cigarettes increased due to the sin tax law.

PMFTC’s Philip Morris and Marlboro cigarettes are considered premium brands, as their prices are higher than their local counterparts, particularly Mighty cigarettes of the Mighty Corp., which has become popular among smokers.

Herbosa said efforts to derail the sin tax law are expected even as he urged the public to remain vigilant. The measure was enacted exactly a year ago this month after a grueling battle in Congress.

“The battle is not over yet and that’s why we continue our battle. Some people will continue to try to remove the effects of the law,” he said.

The health official described PMFTC’s plan as “not very good” as it would lure young people – who are “price sensitive” – into smoking.

He said the sin tax law is important to DOH, as this would enable the Philippine Health Insurance Corp. (PhilHealth) to include in its coverage more indigent Filipinos.