Authorities and security experts noted the link between illicit cigarette smuggling and the funding of terrorism and organized crime in the Philippines.
Senate Committee on Ways and Means chairman Sherwin Gatchalian, in a hearing on Jan. 9, 2025, said illicit trade is not only an economic issue, but also a threat to public safety.
“By not curbing illicit trade, it’s funding these terrorist groups who are wreaking havoc in our southern borders,” Gatchalian said.
Bureau of Customs (BOC) deputy commissioner Juvymax Uy, during the same committee hearing, pointed out that the porous borders in the southern region of Mindanao enable smuggling operations.
Uy said local vessels are not required to have automatic identification systems, making them difficult to track. He also said the existence of private ports under local government jurisdiction further complicates oversight.
Uy revealed that illicit cigarettes have been discovered in Abu Sayyaf camps, underscoring the connection between smuggling and terrorism.
“The people in the southern borders do not smoke the same cigarettes as those in urban areas,” Uy said, highlighting the prevalence of smuggled tobacco products in conflict-affected regions.
The government has ramped up efforts to combat cigarette smuggling.
BOC assistant commissioner Vincent Maronilla reported that in 2021, authorities conducted 131 seizures amounting to P1.71 billion. By 2024, this number had increased to 318 seizures, valued at approximately P9.19 billion.
Despite these efforts, experts warn that cigarette smuggling has escalated to a level that poses a potential national security crisis.
Prof. Rohan Gunaratna, a renowned security expert, confirmed in a June 2024 security conference that terrorist and rebel groups, including Abu Sayyaf, are among the primary beneficiaries of illicit trade.
He also identified Palawan, Zamboanga, Sulu, and Tawi-Tawi as major entry points for smuggled cigarettes originating from Indonesia and Malaysia.
“Indonesia is a key source for the cigarettes coming in,” Gunaratna said. “The Philippines is not benefitting from this revenue, because the carriers are the groups who are not recognized entities or the government.”
Antonio Israel, president of the Nicotine Consumers Union of the Philippines (NCUP) and lead convenor of the anti-smuggling campaign “EKIS sa Smuggling,” warned that armed groups in Mindanao are deeply involved in illicit trade.
“The billions of pesos generated from smuggling can be used to fund unimaginable crimes that threaten our national security,” Israel said.
Authorities continue to seize smuggled cigarettes linked to criminal groups. On Nov. 5, 2023, the Naval Forces Eastern Mindanao (NFEM) intercepted a fishing vessel in Davao Occidental carrying untaxed cigarettes worth P29.4 million.
Among the nine arrested suspects, two were identified as active members of the Moro Islamic Liberation Front (MILF), further cementing the connection between armed groups and smuggling operations.
A 2021 police operation in Zamboanga City led to the arrest of two arms suppliers for the Abu Sayyaf Group (ASG).
The suspects were found in possession of high-powered firearms and millions of pesos worth of smuggled cigarettes, demonstrating how illicit trade is intertwined with arms smuggling and violent activities.
The link between cigarette smuggling and terrorism is not exclusive to the Philippines.
A 2018 report by the Paris-based Financial Action Task Force found that “large-scale organized smuggling likely accounts for the vast majority of cigarettes smuggled globally.” The report also noted that illicit tobacco is trafficked through the same routes used for drugs, weapons, and other illegal goods.
The US State Department identified direct connections between cigarette smuggling and terrorist organizations, including the Irish Republican Army (IRA), the Kurdistan Workers’ Party (PKK), and Hezbollah.
A 2017 Alarabiya News report detailed how former Algerian al-Qaeda leader Mokhtar Belmokhtar profited extensively from cigarette smuggling. In 2016, over 13 billion illicit cigarettes were traded in the Maghreb region, financing extremist groups.
Dalia Ghanem-Yazbeck, an El Erian Fellow at the Carnegie Middle East Center in Beirut, explained that conflicts in the Middle East have made cigarette smuggling an increasingly lucrative source of income for terrorist organizations.
“Conflicts in the Middle East are making smuggling a very profitable source of income for terrorist groups because of the porousness of the borders and lack of material and manpower of the security forces in some regions such as the Sahel,” she said.
