The House Committee on Ways and Means launched an inquiry Wednesday into a massive spike in the illicit tobacco trade, with its chairman warning that the smuggling of cheap cigarettes has evolved into a “major criminal enterprise” similar to illegal offshore gaming operators.

Marikina Representative Miro Quimbo, the committee chairman, initiated the probe under House Resolution No. 636 following the New Year’s seizure of 32 trucks loaded with contraband. Coordinated operations by the Bureau of Customs and the Philippine National Police in Batangas and Malabon yielded products valued at P2.6 billion, representing a potential loss of nearly P1 billion in excise taxes.

“Contraband cigarettes are not a new problem,” Quimbo said. “However, what is new and deeply alarming is the scale, frequency, and brazenness of the situation today. It has become a major criminal enterprise akin to POGOs: operations span from Luzon to Mindanao, involving foreigners and Filipino backers.”

The inquiry found that the trade operates through a “three-pronged menace” of direct smuggling, transshipment, and illegal local manufacturing. Quimbo cited these networks rely on sophisticated cross-border supply chains and covert facilities that thrive on high-level protection.

He also raised alarms regarding public health. Citing Food and Nutrition Research Institute data, Quimbo noted that youth smoking prevalence nearly doubled from 2.3 percent in 2021 to 4.8 percent in 2023. During the same period, government excise tax collections from tobacco continued to decline.

“As cigarette tax collections decrease, the number of smokers increases every year,” Quimbo said. “This is because more people are smoking contraband cigarettes that do not pay taxes. Like lung cancer, if we do not treat the cancer of illicit cigarettes, the problem will spread and worsen.”

The price gap remains a primary driver of the crisis. While two packs of legal cigarettes cost roughly P400, the same amount can purchase an entire ream of contraband cigarettes, making them highly accessible to the youth and the poor.

Between December 2025 and February 2026, law enforcement agencies conducted seven operations, seizing 782.1 million contraband sticks. Officials estimate these sticks would have resulted in P1.84 billion in foregone revenue.

Quimbo stressed that the drop in tax revenue directly impacts public services, particularly funding for PhilHealth. He stated the House would review whether current penalties are sufficient to deter large-scale operators and whether inter-agency coordination is effective.

“Involvement of foreigners and Filipino protectors, no taxes, harmful to health, and a nest of criminality. That is the trend of cheap, contraband cigarettes — this is now the new POGO,” Quimbo said.