PH tobacco exports up by 30%

MANILA, Philippines—Philippine tobacco exports surged in the first semester amid industry fears of dampened domestic demand due to the increase in excise taxes.

The National Tobacco Administration (NTA) reported that the value of outbound shipments of tobacco rose by 29.9 percent year on year in the first six months to $188.8 million.

About 20 percent of the export value was accounted for by manufactured products such as cigarettes and cigars, with earnings jumping by 15.9 percent to $113 million.

The rest of the cargoes were unmanufactured products, mainly tobacco leaves, with earnings rocketing 58.5 percent to $75.8 million.

In terms of volume, exports improved by 23.5 percent to 39.9 million kilograms.

About two-thirds of the shipments represent unmanufactured products, with the volume rising by 35 percent to 26.2 million kilos.

Manufactured exports showed a 6.2-percent rise in volume, which reached 13.7 million kilos.

According to the NTA, domestic production is expected to grow by 8 percent to 70 million kilos this year despite the imposition of higher excise taxes that stoke fears of shrinking demand.

Even then, according to the agency, the forecast output for this year is still lower than the yearly average of 72.6 million kilos.

Also, the expected output for 2013 is much lower than the 79.3 million kilos recorded in 2011.

NTA Administrator Edgardo Zaragoza said industry stakeholders believed that the possible reduction in demand due to higher taxes could be addressed by increasing exports and substitution of imports.

“(This may be) compensated by addressing the quality requirement for domestic and foreign markets,” Zaragoza said.