PMFTC Vows Support for Filipino Farmers

Source from:  Tobacco reporter 10/26/2020

Philip Morris Fortune Tobacco Corp. (PMFTC) plans to spend more than $100 million on leaf from Filipino farmers over the next few years, reports Business World Online, citing company officials.

“While dependent on tobacco industry dynamics and the government’s excise tax policies, we anticipate spending approximately $130 million for more than 45,000 tons of Philippines green tobacco leaf over the next three years,” said PMFTC President Denis Gorkun in a letter addressed to the secretaries of Finance and Agriculture departments.

According to Gorkun, Philippine leaf production has been falling in the wake of recent tax hikes on tobacco products and the expected surge in the illicit trade of cigarettes because of an increase in prices.

A new round of excise tax increases on tobacco and vapor products took effect this year after Republic Act No. 11467 was signed into law in January.

PMFTC sourced 43 percent of its leaf purchases from local farmers in 2019, both directly and through suppliers.

PMFTC is also contemplating a $1 million investment to boost the National Tobacco Administration’s capacity to test aerosols and check product compliance.

The company will continue its program that helps 15,000 tobacco farmers in tobacco-producing provinces become more competitive, said Gorkun.

“We would also like to take this opportunity to assure PMFTC’s support for reasonable regulations applicable to tobacco products. The development of balanced and fair regulations will not only protect the interest of various stakeholders but also ensure the sustainability of the tobacco industry and the livelihood of our Filipino tobacco farmers, especially with the economic challenges we are facing today,” he said in his letter.

Finance Secretary Carlos G. Dominguez III and Agriculture Secretary William D. Dar earlier asked tobacco manufacturers to buy more from local farmers and help the industry recover from the impacts of the coronavirus disease 2019 (COVID-19) pandemic.

The lockdowns and other restrictions imposed to curb the spread of the disease has affected the flow of agricultural goods including tobacco.

Japan Tobacco International on Monday said it would increase its purchases of Philippine tobacco to 4.6 million kg next year.

Philippine law requires tobacco companies in the country to buy at least 15 percent of their leaf requirements from local farmers. Enditem