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Tobacco industry to continue to grow

Decline in tobacco not to happen under PNoy admin
By Carlo P. Mallo |

With a chain-smoking president running the country, becoming a “sunset industry” should be the last thing to happen to the tobacco industry, at least not in the next five years of the presidency of Benigno ‘Noynoy’ Aquino III.

National Tobacco Administration chief Edgardo D. Zaragoza thinks so too.

“We cannot deny that the Philippines is a signatory to the World Health Organization Framework Convention on Tobacco Control that provides for a gradual elimination of tobacco because of health concerns. It is ironic because despite regulations in the US and Europe, it appears there is still growing demand for tobacco,” Zaragoza said.

In the past eight years, despite government efforts to curb tobacco consumption, the value of tobacco production has actually increased by 20 percent in the past eight years. From an estimated 74 million kilos in the 2010 cropping season, production has increased to about 77 million kilos in 2011, and is expected to further increase to 80 million kilos in 2012, data from the NTA showed.

A table provided by the NTA’s regulation department on the estimated tobacco production for crop year 2010-2011 reveals that the country has produced 43 million kilos of Virginia tobacco, worth P3.096 billion; 20 million kilos of burley, worth P1.36 billion; and 14 million kilos of native tobacco, worth P588 million. The estimated totals amount to 77 million kilograms, equivalent to P5.044 billion.

Volume of tobacco produced in crop year 2010 totalled 73.756 million kilograms, which showed a 26 percent increase compared to the 2009 volume of 58.571 million kilograms. In terms of value, this is equivalent to a 20 percent increase, from P4.024 billion in 2009 to P4.846 billion in 2010.

Of these figures, Zaragoza said tobacco farmers have contributed over P34 billion in taxes to the government, with tobacco traders and cigarette manufacturers contributing about four percent to revenues being collected by the Bureau of Internal Revenue.

Zaragoza added there is a worldwide glut for tobacco and tobacco products, but the demand for Philippine tobacco continues to increase because of the high quality it offers. He said over 45 percent of the country’s tobacco production are being exported.

The world’s largest cigarette manufacturer, Phillip Morris, and the world’s largest tobacco dealer, Universal Leaf, believe the country’s tobacco market will continue to be viable in the next five years, Zaragoza said.

Amidst strong moves from the government to curb smoking, Zaragoza vowed to establish financial stability for the agency amidst declining budget allocations and subsidies from the government.

He said the agency shall continue to uphold the welfare of 50,000 direct farmers who still engage in tobacco growing, and over 600,000 other individuals benefitting from the industry.

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