Philippine Tobacco Industry

By Joann Santiago

An executive of British American Tobacco (BAT) Malaysia admitted on Thursday that pulling out their operations in the Philippines in 2009 was a wrong move and stressed that they should have fought harder to level the playing field for cigarette manufacturers and players. 

In a briefing, BAT Malaysia Managing Director William Toh said he was the one who recommended for BAT to exit the Philippines' tobacco industry after noting that they were just losing money and "there was no light at the end of the tunnel."

"Obviously it's the wrong call; it's not the right thing to do; we should still continue to lobby, appeal, fight for a level playing field so we made the decision this year to re-enter the Philippines," he said.

BAT closed shop in the Philippines in 2009 because of several factors, one of which is the Supreme Court (SC) decision ruling the constitutionality of the law pegging higher tax on cigarette brands that entered the Philippine market after 1996, which BAT earlier questioned.

An amendment was made in the Sin Tax Law which took effect in 1997 after a survey was made in 1996 regarding market prices of cigarettes in the country, thus, the law pegged cigarette taxes based on 1996 prices.

Toh said they did not experience a level playing field in the 10 years that they first joined the Philippine market.

"All we are asking for is a level playing field, treat everybody the same and let the economic forces compete," he said.

BAT's decision to stay out of the Philippines was changed recently after the company saw that the government is now pushing harder to level the playing field.

Toh declined to answer whether their re-entry to the Philippine market is now for good pointing out that this really still depends on what will happen to the measure now under lawmakers scrutiny on the reforms in excise tax.