The Philippines is proposing itself as a hub for HTP manufacturing. Photo credit: Nadja Mallock, Frank Henkler-Stephani, and Andreas Luch, Creative Commons 4.0
The Department of Trade and Industry (DTI) has called on manufacturers of heated tobacco products (HTP) to consider establishing their factories in the Philippines due to the growing demand for HTP locally and the potential for exports.
During the recent International Tobacco Agriculture Summit in Taguig City, DTI undersecretary Ceferino Rodolfo emphasized that while the demand for traditional cigarettes is expected to decrease in the coming years due to high taxes and resulting high prices, there is anticipated significant growth in the local demand for HTP.
According to a report from Euromonitor, retail sales of HTP in the Philippines are projected to increase by 511% from 664.7 million sticks in 2022 to 4.06 billion sticks in 2027.
Rodolfo highlighted that producing HTP in the Philippines can benefit from zero duty under free trade agreements (FTA), making it an attractive option for manufacturers.
In 2022, the top export markets for Philippine tobacco products were South Korea (US$102.2 million), Thailand (US$8.29 million), Myanmar (US$49.4 million), Singapore (US$43.02 million), and Malaysia (US$41.21 million).
Rodolfo stated that multinational companies are actively exploring opportunities to manufacture HTP in the Philippines in order to tap into both the local and global markets.
He further emphasized that although the Philippines currently has a relatively small presence in the tobacco industry, there is a chance to specialize and become globally competitive in emerging segments, particularly in high-tech products like HTP.