Last month, President Ferdinand Marcos Jr. signed into law Republic Act No. 12022, or the “Anti-Agricultural Economic Sabotage Act of 2024.” This landmark measure aims to crack down on the smuggling of agricultural products. It elevates smuggling, profiteering, and hoarding of agricultural goods to the level of economic sabotage—which is now punishable by life imprisonment and heavy fines.
The passage of RA 12022 is a response to the growing threat posed by smuggling syndicates. Their illegal activities deprive the government of billions in revenue and destabilize key industries, including the tobacco sector. Its enactment is pivotal in the government’s relentless campaign against illicit tobacco and organized crime. This should send a clear message to smugglers that their profiteering days are over.
Tobacco smuggling affects not only consumers but also businesses. It siphons income away from tobacco-growing regions that rely on legitimate trade to fuel their local economies. Most affected are tobacco farmers and local government units (LGUs), which are dependent on their livelihood and the LGUs’ share of excise tobacco taxes. The new law helps protect agricultural communities from economic instability by cutting off illegal competition and preserving local jobs.
Agriculture remains a cornerstone of the Philippine economy, providing jobs for millions of Filipinos. Smuggling undercuts the livelihood of Filipino farmers, who have to compete with cheaper and illegal farm imports. RA 12022 targets the smuggling syndicates that have threatened these farmers’ ability to sell legal crops at competitive prices, and it empowers farmers to compete fairly.
Smuggled goods are often produced without adhering to safety or quality standards, exposing consumers to health risks. For instance, illicit cigarettes are known to contain hazardous materials. The new law seeks to remove these dangerous products from the market to ensure that consumers will only purchase items that comply with regulations. It increases consumer confidence in locally-made products and reduces the demand for fake or illicit goods.
RA 12022 prevents market distortions and the resulting imbalanced marketplace created by smugglers. It restores order to pricing and supply by curbing the illegal influx of cheap goods that drive prices down – hurting legitimate producers and disrupting the broader economy. Farmers can continue producing food crops without unfair competition from illicit imports, thus safeguarding national food security.
Investments and innovations in the agricultural sector will be encouraged under the new law, which can help modernize and improve agricultural output. Illegal trade undermines fair trade by allowing unscrupulous operators to evade taxes, regulations, and quality standards. RA 12022 brings back integrity to the agricultural market and ensures that all businesses—whether large or small—operate on an equal playing field under the rule of law.
Leading tobacco players have lauded the passage of the new law. Among them is JTI Philippines General Manager John Freda, who noted that the illicit tobacco trade in the country has been growing at alarming levels and poses a significant threat to the nation’s economy—especially the agricultural sector.
Freda said cigarette smuggling is a complex problem and not the victimless crime that it is perceived to be. It negatively impacts many sectors, and its proceeds often finance much bigger criminal activities such as terrorism, human trafficking, drug and weapons smuggling, and corruption in general. He considers the signing of RA 12022 a victory for farmers and consumers in the Philippines.
As the law comes into effect, it is crucial for law enforcement agencies and the general public to remain vigilant. Consumers must also take responsibility by supporting legal and safe products. It’s now up to all stakeholders to ensure RA 12022’s full and proper implementation. This would boost government efforts to protect the economy, safeguard public health, and secure much-needed revenues for vital services to the citizenry.
J. Albert Gamboa is a Life Member of the Financial Executives Institute of the Philippines (FINEX) and Vice-Chair of the FINEX Ethics Committee. The opinion expressed herein does not necessarily reflect the views of FINEX and the Manila Bulletin. #FinexPhils www.finex.org.ph