Top Takeaways:
- Philippine BIR raised floor prices on cigarettes and vape products July 18, to incorporate higher taxes and production costs, with new minimum prices effective 15 days after publication.
- Price increases were particularly steep for nicotine pods, which nearly doubled—from ₱180.67 to ₱353.18 for 2ml pods—while disposable pods, prefilled pods, and devices also saw sizable hikes.
- Excise collections surged, with tobacco collections up 34% to ₱58.97 billion and vape product taxes skyrocketing 738% to ₱1.50 billion during the first half of 2025, according to BIR data.
The Philippines’ Bureau of Internal Revenue (BIR) has issued new revenue regulations implementing higher minimum retail prices for cigarettes, heated tobacco products, and vaporized nicotine products.
Announced on July 18, the increases aim to ensure that taxes and reasonable production costs are properly reflected in retail pricing. The updated rates, effective 15 days post-publication, mark the BIR’s second such adjustment since September 2024.
Under the new regulation, the floor price for a standard 20-stick pack of cigarettes is set at ₱85.57 (US$1.50), up from ₱78.58. Production cost assumptions have increased from ₱7.16 to ₱10.25 per pack, while total tax per pack now totals ₱75.32.
For a full ream (10 packs), the minimum price rises to ₱855.68 from ₱785.80, with the production cost estimate jumping to ₱102.50.
Heated tobacco products also saw modest increases, with the 20-stick pack floor price rising to ₱61.47 from ₱60.11. The production cost assumption decreased slightly to ₱19.04 from ₱19.54.
However, the most dramatic price adjustments apply to vape products. The floor price for a 2ml nicotine pod has nearly doubled to ₱353.18 from ₱180.67, with production cost assumptions rising from ₱52.11 to ₱200.68.
For 10ml disposable pods, prefilled pods, and disposable devices, the new floor prices are ₱183.31, ₱174.89, and ₱98.18 respectively.
BusinessWorld reports these measures are based on projections by the National Tax Research Center, which factor in excise and VAT obligations alongside production costs to establish minimum prices.
Excise tax revenues have already climbed significantly. In the first half of 2025, collections on tobacco products reached ₱58.97 billion (up 34%), while vape excise tax collections surged 738% to ₱1.50 billion.
BusinessMirror detailed penalties for non-compliance: vendors selling below floor price face fines of not less than ₱200,000 and up to ₱500,000, plus four to six years of imprisonment under Section 145(C) of the Tax Code.
The BIR emphasized that the regulation ensures compliance with Republic Act 11346 (“TRAIN law”), which mandates annual automatic increases in excise taxes on tobacco products.
Reaction within the nicotine industry is varied. While some view the policy as supportive of public health and equitable taxation, others caution that steep price increases—especially on vape products—could drive consumers back to the black market or shift them toward cheaper combustible options.
An official from a leading vape trade group, speaking on condition of anonymity, noted: “Doubling the floor price of nicotine pods risks pushing adult vapers toward illicit imports or cigarettes.”
Meanwhile, public health advocates stress that higher minimum prices could help reduce youth access to flavored nicotine products, consistent with broader regulatory priorities.
