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Asia Illicit Tobacco Indicator 2016: Philippines Prepared by Oxford Economics October 2017
Transcript of Asia Illicit Tobacco Indicator 2016: Philippinesillicittobacco.oxfordeconomics.com/media/phili...
Asia Illicit Tobacco Indicator 2016: PhilippinesPrepared by Oxford EconomicsOctober 2017
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DisclaimerThe Asia Illicit Tobacco Indicator 2016 Report (the “Report”) on the illicit tobacco trade in selected Asian markets (including Australia and New Zealand) has been prepared by Oxford Economics (OE). OE enjoyed academic freedom and full editorial control of the Report. We are grateful for the inputs and data received from public sector and industry stakeholders.
OE prepared the Report in accordance with specific terms of reference agreed between Philip Morris International Management SA, an affiliate of Philip Morris International (PM), and OE. Financial support for the Report was provided by PM. OE assume all responsibility for the Report analysis, findings, and conclusion. The terms of reference under which OE were engaged by Philip Morris International Management SA are detailed in the Asia Illicit Tobacco Indicator 2016 Methodological Overview Report, available to download via the following link illicittobacco.oxfordeconomics.com
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“ The Asia Illicit Tobacco Indicator 2016 is a comprehensive and evidence-based study that digs deep into the complex myriad of illicit tobacco trade and evaluates the huge tax losses from smuggling, counterfeit cigarettes, and unregistered volumes which are rampant in the Philippine cigarette industry. But illicit trade of cigarettes goes far beyond smuggling and tax evasion. It has extensive backward linkages with adverse economic impacts and multiplier effects on gross domestic product, household income, and employment. This Report will serve as an instrumental guide for policymakers in the fields of fiscal reform, intellectual property protection, law enforcement, and border protection, to make informed decisions and devise an effective and holistic strategy against illicit tobacco trade.”
Dr. Rolando T. Dy Executive Director for Food and Agribusiness University of Asia and the Pacific
Dr. Dy has managed projects covering the benchmarking of investment codes for local government units and has advised the creation of food industry roadmaps in conjunction with USAID, the Department of Trade and Industry, and the Department of Agriculture.
Foreword
| Philippines Market Summary
| Philippines Market Summary
44 | Philippines Market Summary
Philippines: Legal Domestic Sales
1 Based on the price of Fortune in October 2016 (the Most Sold Brand until 2015). Based on PM data and Nielsen Retail Audit.
Legal Domestic Sales:
72.9 bn cigarettes
Philippines
Price:
PHP 40.5 USD 0.86
Legal Domestic Sales in the Philippines fell by an estimated 10.5 billion cigarettes between 2015 and 2016, from 83.5 billion to 72.9 billion. This decline of 12.6% is the first substantial fall in Legal Domestic Sales since 2013, when sales fell by more than 15% in comparison with the previous year.
Legal Domestic Sales were over one-quarter lower in 2016 than in 2012.
As of 2016, PM and Mighty Corporation accounted for a total of 94% of Legal Domestic Sales.
Cigarette prices have increased markedly in recent years as a result of multiple Excise Tax increases. Excise Tax was approximately 10 times higher in 2016 than in 2012, set at a rate of PHP 25 per pack of 20 cigarettes based on the Most Sold Brand (Low-tax tier cigarettes).1
On 1st January 2016, Excise Tax rates were increased from PHP 21 to PHP 25 for Low-tax tier cigarettes, and PHP 28 to PHP 29 for High-tax tier cigarettes. These represent increases of 19% and 3.6%, respectively.
From January 2017, a unitary Excise Tax rate of PHP 30 per pack of 20 cigarettes was implemented, regardless of the retail price, set to increase by 4% per annum thereafter.
55
0
5
10
15
20
25
201620152014201320122011201020092008
23.5%
41.7%
341.2%
21
19.0% 25
17
12
2.722.722.472.472.23
PHP
per p
ack o
f 20
cigar
ette
s
0
20
40
60
80
100
120
201620152014201320122011201020092008
Ciga
rette
s bn
PHP per pack of 20 cigarettes
35
42
28
21
14
7
0
PHP
bn
Actual ExciseTax revenues
Estimated Excise Tax Loss
20
0
20
40
60
80
100
20162015201420132012
32.9
71.6
1.8 12.7
99.5 95.1
15.1 14.6
82.3
19.1
Cigarette sales bnPHP per pack of 20 cigarettes
% o
f Tot
al C
onsu
mpt
ion
0
20
40
60
80
100
20162015201420132012
94.080.4 86.2 86.9
5.618.6 12.0 11.80.1
NDL
0.3 NDI
0.4 NDL
1.5 NDI
0.1 NDL
1.2 NDI
81.8
16.3
1.8 NDI
0.1 NDL
0.1NDL
0.9NDI
Non-Domestic Illicit (NDI)
Domestic Illicit
Non-Domestic Legal (NDL)
Legal Domestic Consumption
Ciga
rette
s bn
0
20
40
60
80
100
120
20162015201420132012
102.2
82.3
6.1108.7
19.0
83.372.8
11.69.9
0.1 NDL
0.3 NDI
0.2 NDL
1.9 NDI
86.3
17.1
105.596.7
83.9
102.3
0.3NDL
1.5NDI
0.1NDL
1.0NDI0.1
NDL
0.9NDI
Non-Domestic Illicit (NDI)
Domestic Illicit
Non-Domestic Legal (NDL)
Legal Domestic Consumption
0
5
10
15
20
25
201620152014201320122011201020092008
23.5%
41.7%
341.2%
21
19.0% 25
17
12
2.722.722.472.472.23
PHP
per p
ack o
f 20
cigar
ette
s
0
20
40
60
80
100
120
201620152014201320122011201020092008
Ciga
rette
s bn
PHP per pack of 20 cigarettes
35
42
28
21
14
7
0
PHP
bn
Actual ExciseTax revenues
Estimated Excise Tax Loss
20
0
20
40
60
80
100
20162015201420132012
32.9
71.6
1.8 12.7
99.5 95.1
15.1 14.6
82.3
19.1
Cigarette sales bnPHP per pack of 20 cigarettes
% o
f Tot
al C
onsu
mpt
ion
0
20
40
60
80
100
20162015201420132012
94.080.4 86.2 86.9
5.618.6 12.0 11.80.1
NDL
0.3 NDI
0.4 NDL
1.5 NDI
0.1 NDL
1.2 NDI
81.8
16.3
1.8 NDI
0.1 NDL
0.1NDL
0.9NDI
Non-Domestic Illicit (NDI)
Domestic Illicit
Non-Domestic Legal (NDL)
Legal Domestic Consumption
Ciga
rette
s bn
0
20
40
60
80
100
120
20162015201420132012
102.2
82.3
6.1108.7
19.0
83.372.8
11.69.9
0.1 NDL
0.3 NDI
0.2 NDL
1.9 NDI
86.3
17.1
105.596.7
83.9
102.3
0.3NDL
1.5NDI
0.1NDL
1.0NDI0.1
NDL
0.9NDI
Non-Domestic Illicit (NDI)
Domestic Illicit
Non-Domestic Legal (NDL)
Legal Domestic Consumption
Source: Philippines Senate Tax Study and Research Office 2Rate applied in October of each year to Fortune (the Most Sold Brand until 2015).
Source: Philippines Bureau of Internal Revenue and Oxford Economics based on PM data and Nielsen Retail Audit 3Price of Fortune (the Most Sold Brand until 2015) in October of each year.
Philippines: Excise duty applied to cigarettes2
Philippines: Legal Domestic Sales and prices3
Philippines Market Summary |
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Philippines: Cigarette Consumption
Source: Oxford Economics1 The Empty Pack Survey was undertaken in 2016 Q2, while the retail audit provided monthly data in 2016. By comparing sales based on the retail audit with manufacturers’ withdrawals sourced from the Philippines Bureau of Internal Revenue (domestic manufacturers’ withdrawals concern domestic duty-paid cigarettes), this Report estimated the volume of domestically produced cigarettes where the appropriate Excise Tax rates were not paid. 2012 results based on 2011 Q4 Empty Pack Survey (see Report methodology for more details).
2Based on Section 8 of the Republic Act No. 8424 of the National Internal Revenue Code in relation to Revenue Regulation No. 9-2014.3http://illicittobacco.oxfordeconomics.com/
The results from an Empty Pack Survey and the Nielsen Retail Audit, combined with data on withdrawals from the Bureau of Internal Revenue, and actual shipments data from PM, were used to estimate Total Consumption of cigarettes in the Philippines.1
Total Consumption (legal and illicit) is estimated at 83.9 billion cigarettes in 2016, representing a decline of 13.3% in comparison with 2015. This puts Total Consumption around one-quarter lower than the level estimated for 2012 in the first Asia Illicit Tobacco Indicator Report (equivalent to 24.9 billion fewer cigarettes consumed). This decline in Total Consumption is underpinned by a reduction in both Legal Domestic Consumption and Illicit Consumption. Legal Domestic Consumption experienced a decline of 12.6% from 2015 to 2016, falling from 83.3 billion cigarettes to 72.8 billion cigarettes. Illicit Incidence fell by 0.4pp in 2016, from 13.5% in 2015 to 13.1%. This is equivalent to a decline of around 2.1 billion illicit cigarettes consumed over the course of the year. Around 80% of this decline was driven by lower Domestic Illicit Consumption, which fell by 14.3% in comparison with 2015. The decline in Domestic Illicit Consumption continues a trend set in 2015 following the amendment of the National Internal Revenue Code of 1997 which introduced a system of tax security stamps to improve tax administration.2 Non-Domestic Illicit, which accounts for less than 10% of Total Illicit Consumption, fell in 2016, by 28.6% in 2016. Illicit Incidence in the Philippines is similar to the ASEAN average, higher than in markets such as Thailand, Myanmar, and Cambodia, but much lower than markets such as Vietnam and Malaysia.3
Philippine agencies such as the Bureau of Customs and the Bureau of Internal Revenue have had successes in the fight against illicit tobacco in recent years. In the southern provinces, this includes the November 2016 seizure of contraband cigarettes worth PHP 50 million, found in several warehouses in the city of Davao. In addition, an estimated PHP 10 million worth of Counterfeit cigarettes were seized in Cagayan de Oro in October 2016. In the northern provinces, more than PHP 1 billion worth of fake cigarettes and tax stamps were found in three provinces in Luzon.
Philippines: Composition of cigarette consumption2012 2013 2014 2015 2016 %
change2015-16 Cigarettes
bn % Cigarettes bn % Cigarettes
bn % Cigarettes bn % Cigarettes
bn %
Legal Domestic Consumption (LDC) 102.2 94.0 86.3 81.8 82.3 80.4 83.3 86.2 72.8 86.9 -12.6
Legal Domestic Sales (LDS) 102.2 – 86.3 – 82.3 – 83.5 – 72.9 – -12.6
Outflows of domestic duty-paid cigarettes -0.1 – -0.1 – -0.1 – -0.2 – -0.1 – -43.0
Total Non-Domestic Inflows (ND) 0.4 0.4 2.1 2.0 1.0 1.0 1.8 1.9 1.1 1.3 -38.2
Non-Domestic Legal (NDL) 0.1 0.1 0.2 0.1 0.1 0.1 0.3 0.4 0.1 0.1 -79.1
Non-Domestic Illicit 0.3 0.3 1.9 1.8 0.9 0.9 1.5 1.5 1.0 1.2 -28.6
Domestic Illicit 6.1 5.6 17.1 16.3 19.0 18.6 11.6 12.0 9.9 11.8 -14.3
Total Consumption 108.7 100.0 105.5 100.0 102.3 100.0 96.7 100.0 83.9 100.0 -13.3
Total Illicit Consumption 6.4 5.9 19.1 18.1 19.9 19.4 13.0 13.5 10.9 13.1 -15.9
| Philippines Market Summary
77
Source: Oxford Economics
Source: Oxford Economics
Philippines: Composition of cigarette consumption(% of Total Consumption)
Philippines: Composition of cigarette consumption(number of cigarettes)
0
5
10
15
20
25
201620152014201320122011201020092008
23.5%
41.7%
341.2%
21
19.0% 25
17
12
2.722.722.472.472.23
PHP
per p
ack o
f 20
cigar
ette
s0
20
40
60
80
100
120
201620152014201320122011201020092008Ci
gare
ttes b
nPHP per pack of 20 cigarettes
35
42
28
21
14
7
0
PHP
bn
Actual ExciseTax revenues
Estimated Excise Tax Loss
20
0
20
40
60
80
100
20162015201420132012
32.9
71.6
1.8 12.7
99.5 95.1
15.1 14.6
82.3
19.1
Cigarette sales bnPHP per pack of 20 cigarettes
% o
f Tot
al C
onsu
mpt
ion
0
20
40
60
80
100
20162015201420132012
94.080.4 86.2 86.9
5.618.6 12.0 11.80.1
NDL
0.3 NDI
0.4 NDL
1.5 NDI
0.1 NDL
1.2 NDI
81.8
16.3
1.8 NDI
0.1 NDL
0.1NDL
0.9NDI
Non-Domestic Illicit (NDI)
Domestic Illicit
Non-Domestic Legal (NDL)
Legal Domestic Consumption
Ciga
rette
s bn
0
20
40
60
80
100
120
20162015201420132012
102.2
82.3
6.1108.7
19.0
83.372.8
11.69.9
0.1 NDL
0.3 NDI
0.2 NDL
1.9 NDI
86.3
17.1
105.596.7
83.9
102.3
0.3NDL
1.5NDI
0.1NDL
1.0NDI0.1
NDL
0.9NDI
Non-Domestic Illicit (NDI)
Domestic Illicit
Non-Domestic Legal (NDL)
Legal Domestic Consumption
0
5
10
15
20
25
201620152014201320122011201020092008
23.5%
41.7%
341.2%
21
19.0% 25
17
12
2.722.722.472.472.23
PHP
per p
ack o
f 20
cigar
ette
s
0
20
40
60
80
100
120
201620152014201320122011201020092008
Ciga
rette
s bn
PHP per pack of 20 cigarettes
35
42
28
21
14
7
0
PHP
bn
Actual ExciseTax revenues
Estimated Excise Tax Loss
20
0
20
40
60
80
100
20162015201420132012
32.9
71.6
1.8 12.7
99.5 95.1
15.1 14.6
82.3
19.1
Cigarette sales bnPHP per pack of 20 cigarettes
% o
f Tot
al C
onsu
mpt
ion
0
20
40
60
80
100
20162015201420132012
94.080.4 86.2 86.9
5.618.6 12.0 11.80.1
NDL
0.3 NDI
0.4 NDL
1.5 NDI
0.1 NDL
1.2 NDI
81.8
16.3
1.8 NDI
0.1 NDL
0.1NDL
0.9NDI
Non-Domestic Illicit (NDI)
Domestic Illicit
Non-Domestic Legal (NDL)
Legal Domestic Consumption
Ciga
rette
s bn
0
20
40
60
80
100
120
20162015201420132012
102.2
82.3
6.1108.7
19.0
83.372.8
11.69.9
0.1 NDL
0.3 NDI
0.2 NDL
1.9 NDI
86.3
17.1
105.596.7
83.9
102.3
0.3NDL
1.5NDI
0.1NDL
1.0NDI0.1
NDL
0.9NDI
Non-Domestic Illicit (NDI)
Domestic Illicit
Non-Domestic Legal (NDL)
Legal Domestic Consumption
Philippines Market Summary |
88
Philippines: Government Finances In 2016, Philippines applied a two-tiered specific Excise Tax on cigarettes. A pack of 20 cigarettes with a net retail price1 (NRP) not exceeding PHP 11.50 (Low-tax tier cigarettes) was liable for a tax of PHP 25 per pack, while a pack of 20 cigarettes with a NRP above PHP 11.50 (High-tax tier cigarettes) was taxed at PHP 29 per pack.
The Excise Tax system was simplified in January 2013 through a reduction in the number of tiers from four to two. Excise Tax rates were set at PHP 12 per pack of Low-tax tier cigarettes and PHP 25 per pack of High-tax tier cigarettes. This represented a sharp increase in the applied Excise Tax rate of 341% on the Low-tax tier (as defined in 2012), 231% on the Mid-tax tier, and 108% on the High-tax tier.
Excise Taxes were increased in the years thereafter. The Excise Tax rate on Low-tax tier cigarettes rose to PHP 17 per pack of 20 cigarettes in 2014 and PHP 21 in 2015, and High-tax tier cigarettes were taxed at PHP 27 per pack of 20 cigarettes in 2014 and PHP 28 in 2015.
On 1st January 2016, Excise Tax rates were further increased from PHP 21 to PHP 25 for Low-tax tier cigarettes, and PHP 28 to PHP 29 for High-tax tier cigarettes, which represent increases of 19% and 3.6%, respectively.
In 2017, a unitary tax rate of PHP 30 per pack was implemented, regardless of the NRP, with a rise of 4% scheduled by law for every year thereafter.
In addition, VAT is levied at a rate of 12% on the retail price of sales. Actual revenues from Excise Taxes on cigarettes decreased 4.5% in 2016 to PHP 95.1 billion, the first decline in revenues registered since the Asia Illicit Tobacco Indicator research began.
The Tax Loss associated with Illicit Consumption was an estimated PHP 17.4 billion in 2016 – primarily consisting of lost Excise Tax revenues – representing a 2.7% decline in comparison with 2015.
As a share of total potential Excise Tax receipts, the Excise Tax Loss was an estimated 13.3% in 2016. This is 0.1pp higher than the previous year despite the decline in the estimated volume of illicit cigarettes consumed.
2012 2013 2014 2015 2016 % change in local
currency2015-16
PHP bn
USD mn
PHP bn
USD mn
PHP bn
USD mn
PHP bn
USD mn
PHP bn
USD mn
Actual revenue from excise duties on tobacco 32.9 780 71.6 1,687 82.3 1,855 99.5 2,187 95.1 2,001 -4.5%
Estimated number of illicit cigarettes purchased (cigarettes bn)
6.4 19.1 19.9 13.0 10.9 -15.9%
Estimated Tax Loss from Illicit Consumption 2.6 62 15.6 368 22.5 506 17.9 394 17.4 367 -2.7%
Lost excise revenue 1.8 42 12.7 300 19.1 431 15.1 332 14.6 308 -3.1%
Lost VAT revenue 0.8 19 2.9 68 3.3 75 2.8 62 2.8 59 0.0%
Excise Tax Loss as % of potential total Excise Tax revenues
5.2% 15.1% 18.9% 13.2% 13.3%
Source for government revenue data: Philippines Bureau of Internal Revenue and Oxford Economics based on PM data1Retail selling price net of excise and VAT.
Philippines: Actual government revenues and estimated Tax Loss
| Philippines Market Summary
99
0
5
10
15
20
25
201620152014201320122011201020092008
23.5%
41.7%
341.2%
21
19.0% 25
17
12
2.722.722.472.472.23
PHP
per p
ack o
f 20
cigar
ette
s
0
20
40
60
80
100
120
201620152014201320122011201020092008
Ciga
rette
s bn
PHP per pack of 20 cigarettes
35
42
28
21
14
7
0PH
P bn
Actual ExciseTax revenues
Estimated Excise Tax Loss
20
0
20
40
60
80
100
20162015201420132012
32.9
71.6
1.8 12.7
99.5 95.1
15.1 14.6
82.3
19.1
Cigarette sales bnPHP per pack of 20 cigarettes
% o
f Tot
al C
onsu
mpt
ion
0
20
40
60
80
100
20162015201420132012
94.080.4 86.2 86.9
5.618.6 12.0 11.80.1
NDL
0.3 NDI
0.4 NDL
1.5 NDI
0.1 NDL
1.2 NDI
81.8
16.3
1.8 NDI
0.1 NDL
0.1NDL
0.9NDI
Non-Domestic Illicit (NDI)
Domestic Illicit
Non-Domestic Legal (NDL)
Legal Domestic Consumption
Ciga
rette
s bn
0
20
40
60
80
100
120
20162015201420132012
102.2
82.3
6.1108.7
19.0
83.372.8
11.69.9
0.1 NDL
0.3 NDI
0.2 NDL
1.9 NDI
86.3
17.1
105.596.7
83.9
102.3
0.3NDL
1.5NDI
0.1NDL
1.0NDI0.1
NDL
0.9NDI
Non-Domestic Illicit (NDI)
Domestic Illicit
Non-Domestic Legal (NDL)
Legal Domestic Consumption
Philippines: Actual government revenues and estimated Excise Tax Loss
Philippines Market Summary |
Source: Philippines Bureau of Internal Revenue and Oxford Economics based on PM data
1010
Counterfeit997 mn(-27.2%)
Other / Unspecified
48 mn(-49.7%)
Total1,046 mn
(-28.6%)
Illicit cigarettes consumed in the Philippines consist primarily of domestic non-tax paid cigarettes. In total, an estimated 11.8% of Total Consumption in the Philippines in 2016 was estimated to be Domestic Illicit, 0.2pp lower than in 2015, but significantly higher than the level estimated in the first Asia Illicit Tobacco Indicator Report in 2012.
Less than 10% of illicit cigarettes consumed in 2016 were of Non-Domestic origin, a slight decline in comparison with the previous year.
Overall, Non-Domestic Illicit Consumption fell by by 28.6% from 2015 to 2016 to around 1 billion cigarettes.
The decrease in Non-Domestic Illicit has been driven by a sharp fall in the presence of Counterfeit cigarettes in the Philippines – which account for the large majority of Non-Domestic Illicit Consumption (around 95%).1
Counterfeit cigarettes fell from 1.4 billion cigarettes in 2015 to 1 billion cigarettes in 2016 (equivalent to a decrease of 27.2%). The volume of Counterfeit products identified in 2016 still remains higher than 2014 levels however, when an estimated 0.7 billion Counterfeit cigarettes were consumed.
Outflows of domestic duty-paid cigarettes to the other markets covered in this Report have also declined from 173 million in 2015 to 99 million in 2016.2
Philippines: Trade Flows
Source: IT Flows Model and Oxford Economics1 Note that estimated Outflows of duty-paid cigarettes are based only on identified Inflows in the other markets covered in this Report and may therefore be an underestimate.
2 The Empty Pack Survey identifies all Counterfeit cigarettes as of Philippines market variant. However, for the purposes of this Report, we classify Counterfeit cigarettes as of Non-Domestic origin.
3Figures in brackets reflect % change from 2015.
Cigarettes mn
2012 2013 2014 2015 2016
Other / Unspecified 93 100 162 96 48Counterfeit 218 1,850 709 1,369 997
Total 311 1,950 871 1,465 1,046
Philippines: Origin of total Non-Domestic Illicit Inflows3
| Philippines Market Summary
1111
Philippines: Consumption breakdown 2016
Source: IT Flows Model and Oxford Economics
Cigarettes bn
Cigarettes bn
Illicit
Non-Domestic Legal Inflows
Philippines Market Summary |
0
0 20
20
40
40
60
60
80
80
100
100
Total 83.9
Legal Domestic
Sales72.9
Legal Domestic
Consumption72.8
Outflows of duty-paid 0.1
Other/ Unspecified 0.05 0.05
Other/ Unspecified 0.02 0
Domestic Illicit 9.90
Counterfeit 1.00
1212 | Philippines Market Summary
Philippines: Other Estimates
Source Comment
Comparing consumption estimates with LDC (“bottom up” approach)
Using data on average annual cigarette consumption per adult (age 15 and above), plus UN population data, a “bottom up” estimate of cigarette consumption can be made which can then be compared with LDC. This approach yields an estimate for the Illicit Incidence of 5.1%, or around 4.4 billion cigarettes (based on 2014 LDC). The source for annual cigarette consumption per adult is Euromonitor (available via www.tobaccoatlas.org).
Euromonitor Passport, 2017 Euromonitor estimates an Illicit Incidence of 11.0% in 2016. The methodology, sampling, and coverage are unknown, so it is difficult to assess the robustness of this estimate.
Philippines: Alternative estimates of Illicit Consumption
0
5
10
15
20
25
30
35
40%
“Bottom up” consumption(2009)
Oxford Economics(2015)
0.6
35.7
0
5
10
15
20
25%
Vietnam Tobacco
Association(2014)
“Bottom up” consumption
(2014)
Nielsen Retail Audit (2015)
Euromonitor (2016)
OxfordEconomics
(2016)
22.220.9
17.1 18.6 18.2
0
3
6
9
12
15%
“Bottom up”consumption
(2014)
Euromonitor(2016)
OxfordEconomics
(2016)
12.0
5.63.7
0
1
2
3
4
5%
“Bottom up”consumption (2014)
Euromonitor(2015)
Oxford Economics(2015)
1.9
3.4
4.7
0
3
6
9
12
15%
“Bottom up”consumption (2014)
Euromonitor (2016)
Oxford Economics (2016)
13.111.0
5.1
0
5
10
15
20
25
30
35
40%
“Bottom up”consumption (2013)
Nielsen(2014)
Euromonitor(2015)
Oxford Economics2015
31.3
20.6
38.8
23.7
2.2
0
2
4
6
8
10
12%
Ahsan et al.(2013)
Gadjah MadaUniversity
(2014)
Euromonitor(2015)
OxfordEconomics
(2015)
11.8
8.2 8.0
11.7
2.2
0.0
0.5
1.0
1.5
2.0
2.5%
Euromonitor (2016)Oxford Economics (2016)
2.3
0.9
1313
Philippines: Data Sources
Primary source Calculation Comments
Legal Domestic Sales (LDS)
Industry volume based on Bureau of Internal Revenue Statement of Manufactures’ Ex-factory Withdrawals, adjusted for actual shipments for PM.
— —
Outflows of domesticduty-paid cigarettes
Empty Pack Survey data in other markets covered in this Report.
Empty Pack Survey data in other markets used to identify Philippine domestic variant cigarettes based on market-specific labelling (e.g., health warnings, tax stamps, etc.).
Outflows of domestic duty-paid cigarettes to other markets are estimated at around 99 million cigarettes.
Legal DomesticConsumption (LDC)
— Legal Domestic Sales minus Outflows of legal sales.
Outflows of duty-paid cigarettes refer only to Outflows to other markets included in this Report.
Total Non-DomesticInflows (ND)
— Sum of Non-Domestic Legal and Non-Domestic Illicit.
—
Non-Domestic Legal (NDL)
— Estimated using passenger data, smoking rates, and passenger duty-free personal import allowance.
Maximum theoretical amount an individual can carry across a border. Passenger data from the Philippines Department of Tourism, UNWTO, and OE Tourism Model.
Non-Domestic Illicit
Empty Pack Survey. Based on Empty Pack Surveys plus OE estimates.
Estimates derived from the Empty Pack Surveys conducted in 2016 Q2. Estimates of illicitly imported Non-Domestic cigarettes are relatively low in comparison with Domestic Illicit. See Report methodology for more details.
Domestic Illicit Nielsen Retail Audit. Estimate derived from a comparison of market shares of domestic producers in the retail audit and BIR withdrawals data.
Illicit cigarettes in the Philippines are believed to be mostly domestically produced.
Total Illicit Consumption
— Sum of Non-Domestic Illicit and Domestic Illicit.
—
Total Consumption
— Legal Domestic Sales minus Outflows of domestic duty-paid cigarettes, plus estimated Non-Domestic Legal consumption, plus estimated Illicit Consumption.
The IT Flows Model estimate of consumption is 83.9 billion cigarettes for 2016.
Total Tax Loss — Total Illicit Consumption multiplied by the weighted average tax rates (Excise Tax and GST).
See Report methodology for more details.
Philippines Market Summary |
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