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Shadow Report on the Implementation of WHO Framework Convention on Tobacco Control in the Philippines

(2011)

HealthJustice

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Table of Contents

Executive Summary……...………………………………………….. 6

Tobacco Tax……………………………………………………..………. 8

Smoke Free Environments……………………………………… 15

Graphic Health Warnings………………………………..……… 20

Tobacco Industry Interference………………………………. 25

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Abbreviations

CSC Civil Service Commission

CTGA Cagayan Tobacco Growers Association

DILG Department of Interior and Local Government

DOF Department of Finance

DOH Department of Health

FDA Food and Drug Administration

FTC Fortune Tobacco Corporation

IAC-T Inter-‐agency Committee-‐Tobacco

ICESCR International Covenant on Economic, Social, and Cultural Rights

JMC Joint Memorandum Circular

LTFRB Land Transportation Franchising and Regulatory Board

LEDAC Legislative-‐Executive Development Advisory Council

LGUs Local Government Units

MMDA Metro Manila Development Authority

NTA National Tobacco Administration

PATDA Philippine Aromatic Tobacco Development Association Inc.

PMFTC Philip Morris Fortune Tobacco Corporation

PMPMI Philip Morris Philippines Manufacturing Inc.

PTGA Philippine Tobacco Growers Association

PTI Philippine Tobacco Institute

SEATCA Southeast Asia Tobacco Control Alliance

SITT Southeast Asia Initiative on Tobacco Tax

TAPS Tobacco Advertisement, Promotion, and Sponsorship

TESDA Technical Education Skills Development Authority

VAT Value-‐Added Tax

WHO World Health Organization

WHO FCTC World Health Organization Framework Convention on Tobacco

Control

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17.3 million adult smokers. i

The Philippines has one of the highest smoking prevalence in the world.

Youth smoking increased by

40% within a span of 4

years. v

16th highest in female adult smoking prevalence. iv Tobacco companies continue to glamorize smoking to entice women and the youth to continue smoking.

9th highest in male

adult smoking prevalence. ii

It is estimated that

47.7% of

the Filipino male population smoke. iii

Even homes are not safe. Almost

50% of Filipino households are not smoke-‐free.vi

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87,600

Filipinos die every year due to tobacco-‐related illnesses ix

Economic cost of four tobacco-‐related diseases: viii

PhP 218 to 461 Billion

Annual revenue collection from tobacco companies: vii

PhP 26 Billion

Philip Morris Fortune Tobacco Corporation controls

93% of the cigarette market

Over 90% of

tobacco products consumed in the country are in the form of cigarettes

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EXECUTIVE SUMMARY While there are tobacco control efforts in the Philippines, the prevalence of tobacco use remains high, with 28.3% adultsx and 27.3% youthxi currently using tobacco products. This can be attributed to weak laws, lack of strict implementation of policies, and strong tobacco industry interference. As a result, it is estimated that 87,600 Filipinos die from tobacco-‐related diseases per year. In other words, if the Philippines wants to win the war against tobacco, it needs to strengthen its efforts in implementing tobacco control measures. This Shadow Report aims to explore four key areas of tobacco control in the Philippines – tobacco taxation, smoke free environments, graphic health warnings, and tobacco industry interference. These key areas address crucial problems or gaps, namely:

• The availability of cheap, affordable cigarettes • An environment that supports the culture of smoking • Lack of appropriate and effective health warnings • The strong influence of the tobacco industry in the country

Tobacco Taxes The tobacco tax structure must be simplified, and the excise tax of tobacco products must be significantly increased. In addition it must be regularly increased so that tobacco product prices would be high enough to reduce tobacco use. Part of the revenue from tobacco taxes should be allocated for preventative health programs and systems or ”health promotion” as a complementary effort to reduce tobacco consumption and the growing burden of NCDs in the country. Funds from tobacco tax must also be channeled towards promoting alternative livelihood for tobacco farmers. Smoke Free Environments The efforts of different agencies and local government units (LGUs) in implementing smoke free initiatives must be encouraged to protect the public from secondhand smoke.xii In addition, strict implementation of smoke free public places will also encourage smokers to quit smoking and support smoking cessation efforts. Graphic Health Warnings The Department of Health (DOH) Administrative Order 2010-‐13 on Graphic Health Information must be implemented despite the challenges filed by the tobacco industry in court.xiii The DOH has the authority to implement the Administrative Order, except in certain territories where the tobacco industry has secured a preliminary injunction. In addition, the DOH can also support and encourage LGUs to implement the Administrative Order.xiv

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Tobacco Industry Interference Tobacco industry interference must be countered through the implementation of Article 5.3 of the FCTC and the DOH-‐CSC Joint Memorandum Circular on the Protection of the Bureaucracy Against Tobacco Industry Interference. It is essential to sustain the efforts to raise awareness and to report tobacco industry interference in order to denormalize the strategies of the tobacco industry.

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TOBACCO TAX Compared with neighboring countries, Singapore, Malaysia, and Thailand, cigarette price in the Philippines is the lowest, while smoking prevalence is the highest. Price of Cigarettes and Smoking Prevalence Rates in Selected Southeast Asian Countriesxv

Weaknesses of the Tobacco Excise Tax System

Different types of tax are imposed on tobacco: Value-‐added tax (VAT), import tariff, and excise tax. Among these, excise tax has the highest impact on price and serves a regulatory purpose to address health objectives. The current system does not take into account health objectives. The tax rates are too low and the tax burden has decreased remarkably over the past decade. Based on 2010 cigarette prices, the cigarette excise tax as a percentage of GRP ranges from 19 percent to 48 percent, whereas in 1997, it was between 30 percent and 60 percent.xvi The current tax burden is below the recommended levels of the World Health Organization (WHO) and World Bank which is for tobacco taxes to be at least 70% of the retail price.xvii Excise tax for cigarettes provides for specific taxes, which takes the nature of an ad valorem because of

Article 6 of the FCTC

Parties should take account of its national health objectives concerning tobacco control and adopt or maintain measures, which may include: Implementing tax and

price policies on tobacco products so as to contribute to the health objectives aimed at reducing tobacco consumption

Prohibiting or restricting, as appropriate, sales to and/or importations by international travelers of tax-‐ and duty-‐free tobacco products

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the four price classifications of cigarettes wherein low specific rates are imposed on the lower-‐priced cigarettes A 2010 study that first analyzed the tobacco excise tax system from a health perspective resulted in bringing together various government officials in health, economics and finance. The study recommended a specific rate/ value of tobacco tax and identified key issues that must be addressed, namely: price classification freeze, multi-‐level tax structure, lack of price indexation, low incremental change in tax and price, and the imbalance of funding that accrues to health promotion in contrast with that which is dedicated for tobacco farming provinces xviii

1. Price Classification Freeze

The lawxix made a classification between old brands and those registered after January 1, 1997. Existing or old brands of cigarettes, or those that form over 90 percent of the total market, are taxed based on their net retail price as of October 1, 1996. The price classification freeze is advantageous to old brands but disadvantageous to new entrants because new brands are taxed based on their current net retail prices instead of the lower NRP of the tax base.xx Government Revenue Losses Due to Price Classification Freezexxi

Government Revenue Losses (PhP) in billions Current

price classification

Price classification if freeze is removed

2005 2006 2007 2008 2009 2010xxii

Low Middle 6.23 7.96 8.03 9.04 8.74 10.04

Middle High 2.71 2.55 2.40 2.39 1.85 2.12

High Premium 15.75 17.76 14.04 18.01 14.99 17.26

TOTAL 24.69 28.62 24.47 29.44 25.58 29.42

2. Multi-level Tax Structure

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The current tax structure is classified into four tiers with different specific tax rates depending on their prices classification as premium-‐priced, high-‐priced, medium-‐priced, and low-‐priced. The specific tax rates depend upon the price classification, thus, cigarettes that are classified at a lower bracket pay a lower rate.

Market Segment, Tax Rate, and Market Sharexxiii

Market Segment

2009 Tax Rate

(PhP)

Market Share estimate

(%)

Low 2.47 48.3

Medium 7.14 20.4

High 11.43 30.2

Premium 27.16 1.2

The system keeps low-‐priced cigarettes low and widens the gap between high-‐priced and low-‐priced cigarettesxxiv and has contributed to the substitution of brands. The wide gap between low-‐, middle-‐, and high-‐priced cigarettes has encouraged a trend of shifting from high-‐priced brands to low-‐priced brands, with an indication that the consumption of low-‐priced cigarettes is rising.xxv Majority of the cigarettes sold belong to the low-‐priced category.xxvi

3. Lack of Price Indexation Current specific rates under the law do not allow for adjustments based on inflation and the real value of excise taxes have decreased over time. On the other hand, as real income increased over time, consumption of tobacco also increased.xxvii Thus, to effectively curb tobacco consumption, excise taxes must compensate for increases in income.

4. Low Incremental Change in Tax and Price The law prescribes an increase in excise tax every two years, which is so low that it is overtaken by inflation rates. The marginal increase does not contribute to discourage the population from tobacco consumption.

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Current Efforts to Restructure the Tobacco Tax System Taxing Health Risks, a policy paper on tobacco tax and health promotion, was developed by HealthJustice and the University of the Philippines College of Law through consultations with renowned experts, the Department of Finance (DOF), and the Department of Health (DOH), with the support of Southeast Asia Initiative on Tobacco Tax (SITT). The policy paper recommended the correction of the weaknesses of the tobacco excise tax system and provided an approach to facilitate a smooth transition from the current to the new system. It recommended:

• Removal of the price classification freeze • Move from a four-‐tier to a single-‐tier classification system • Uniform specific rate of PhP 30.00 per pack by 2014 • Regular and frequent increases of tobacco excise tax on top of price indexation to

inflation to meet long term health objectives The paper also recommended a correction of the problems with the current earmarked taxes from tobacco. This can be done by allocating a portion of the revenue for health promotion as a complementary effort to lower tobacco consumption and removing the allocation for tobacco promotion and rechanneling it instead for alternative livelihood of tobacco farmers in accordance with the obligations under Articles 17 and 18 of the WHO FCTC. The DOH adopted the recommendations of Taxing Health Risks in the position paper it submitted to the House of Representatives. The position paper strongly supported the passage of tax measures that would effectively address the problems related to the consumption of tobacco and alcohol. The DOF recognizes the urgent need to address the increasing budget deficit. It is alarmed by the steadily decreasing revenues from excise taxes, especially tobacco tax, because of

Policy Recommendations:

Remove the price classification freeze Shift from a multi-‐level to a single-‐level tax

structure Index the taxes to inflation Set regular and frequent increases in excise tax in

order to sustain the reduction in tobacco consumption in the medium and long term

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the lack of indexation and price classification freeze. Hence, it has been pushing for the amendment of the tobacco excise tax system.xxviii Last year, President Benigno Aquino III, through the Legislative-‐Executive Development Advisory Council (LEDAC), included the restructuring of excise tax on alcohol and tobacco products as one of the thirteen priority bills of the Aquino administration. Aquino said that the sin tax law has to be restructured because the basis of the valuation of products is still 1996 figures and the rates have to be simplified into a single-‐tier system instead of multi-‐tiered.xxix The LEDAC prepared a draft bill that aims to correct the flaws of the current excise tax structure. The bill has been adopted by Representative Abaya and is currently being deliberated on in the Ways and Means Committee of the House of Representatives. Specifically, it provides for:

• Removal of the price classification freeze • Shift to a single tax level structure • Increase of excise tax of cigarettes to PhP30.00 by 2014 • Automatic adjustment of the tax rates using the relevant National Statistics Office-‐

established tobacco and alcohol index • Funding for alternative livelihood for tobacco farmers and workers • Funding for the universal health care program of the government

Illicit Trade of Cigarettes Serious efforts are needed to combat illicit trade of cigarettes to complement the efforts to curb tobacco consumption. This is an important area as the government moves towards the adoption of legislation to correct the weaknesses of the tobacco excise tax system. Illicitly traded cigarettes translate to cheap tax-‐free products that will contribute to increase in tobacco consumption and loss of revenue for the government. For the government to succeed in its effort to lower tobacco consumption, illicit trade of cigarettes must be prevented.

Article 15 of the FCTC

Each Party shall adopt and implement effective legislative, executive, administrative, or other measures to ensure that all unit packets and packages of tobacco products and any outside packaging of such products are marked to assist Parties in determining the origin of tobacco products, and in accordance with national law and relevant bilateral or multilateral agreements, assist Parties in determining the point of diversion and monitor, document and control the movement of tobacco products and their legal status.

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Policy Recommendations to Combat Tobacco Smuggling

• Require secure tax markings to help distinguish between tax-‐paid and tax-‐unpaid cigarettes in the market

• Simplify the current tax structure to prevent misclassification of cigarettes and improve tax administration

• Institute general reforms to remove corruption in the system Dedicated Taxes for Promotion of Tobacco vs. Dedicated Taxes for Health The current system provides for grossly disproportionate allocation of revenue for tobacco promotion, on one hand, and health, on the other. xxx Funds allocated for health consist of approximately $2.32 million a year for five years. xxxi On the other hand, funds allocated for tobacco promotion credited directly to Local Government Units (LGUs) of tobacco-‐producing provinces amount to roughly $37.2 million per year.xxxii The government has essentially provided an incentive for tobacco-‐growing provinces, contrary to the commitments under Articles 17 and 18 of the WHO FCTC to promote economically viable alternatives to tobacco and Article 5.3 in relation to its Guidelines on prohibiting the granting of privileges and benefits to the tobacco industry.xxxiii To address this, the law must be amended to redefine the use of the funds to be consistent with Article 17 of the FCTC, i.e., funds could instead be given to develop alternative livelihood for farmers to enable them to shift from growing tobacco to other crops that are equally or more profitable. In light of the growing rate of non-‐communicable diseases in the country, another cost-‐effective measure is to use part of the revenue from tobacco tax to fund health promotion in the Philippines, focusing primarily on NCD’s and other social determinants of health. The focus on NCDs is consistent with the WHO 2008-‐2013 Action Plan for the Global Strategy for the Prevention and Control of Noncommunicable Diseases, which recommends the “establishment of an adequately staffed and funded non-‐communicable disease and health promotion unit.”xxxiv In the Philippines, NCDs caused 61% of all deaths in 2008,xxxv comprised mainly of cardiovascular diseases (“CVDs”), cancers, diabetes and chronic lung diseases.xxxvi Ninety percent (90%) of all Filipinos have one or more of common risk factors that lead to NCDs, such as tobacco use, obesity, hypertension, high blood sugar and abnormal blood cholesterol levels.xxxvii

World Health Organization, http://www.who.int/hpr/NPH/docs/whr_2002_risk _factors.pdf

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If nothing is done now, a significant portion of our GDP will be spent on health care in the near future.xxxviii Policy recommendations:

Ensure allocation of funding, potentially from tobacco tax, to fund:

• Alternative livelihood for tobacco farmers • Health promotion

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SMOKE FREE ENVIRONMENTS

All government offices and many local government units (LGUs) around the Philippines have adopted a 100% smoke-‐free indoor policy (100% smoke-‐free policy). These policies are based on Republic Act No. 9211 or the Tobacco Regulation Act of 2003 (RA 9211) and the Clean Air Act of 1999 (RA 8749), and are in accordance with Article 8 of the WHO FCTC and its Guidelines. 100% smoke free policies in accordance with Article 8 of the WHO FCTC set a higher standard for health protection than what is currently provided under Articles 5 and 6 of RA 9211. Smoke-Free Government Offices In 2009, the DOH issued Administrative Order 2009-‐0010 (Comprehensive 100% Smoke-‐Free Environment Policy) calling for the absolute ban of smoking in DOH offices, hospitals and attached agencies. It also urges LGUs to do the same in health facilities and other public places. In the same year, the Civil Service Commission (CSC) as the central personnel agency of the government issued Memorandum Circular No. 17, s. 2009 (CSC Memo 17) or the Smoking Prohibition based on 100% Smoke-‐Free Environment Policy. This is the first smoke free policy of a nationwide and multi-‐sectoral scope that is in accordance with the Guidelines for the Implementation of Article 8 of the WHO FCTC. The Circular seeks to promote the adoption of a 100% Smoke-‐Free Policy in government agencies providing education, health, and social welfare and development services, and a smoking prohibition in all areas of government premises, buildings and grounds, except for selected open spaces designated as smoking areas. In 2011, with support from the DOH, the CSC launched a series of symposia and capacity building seminars on the implementation of the CSC Memo 17 and the CSC-‐DOH Joint Memorandum Circular on Protection of the Bureaucracy Against Tobacco Industry Interference in partnership with civil society organizations such as HealthJustice, Southeast Asia Tobacco Control Alliance, New Vois Association of the Philippines and the University of the Philippines College of Law Development Foundation. The project was able to raise awareness and promote the implementation of the said policies and relevant issuances among government agencies and pubic officials and employees.

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To give recognition to the efforts of LGUs, government hospitals, government offices, and DOH Centers for Health Development in establishing a smoke-‐free workplace, the DOH established the Red Orchid Awards in 2009. The Red Orchid Awards continues to encourage and inspire LGUs and various government agencies to establish a 100% Smoke Free environment. With only 46 nominees in 2010, the nominees increased to 89 in 2011.xxxix For 2012, in addition to the certificates of recognition and P100,000 worth of smoking cessation medicines and

services, the DOH will also give a P500,000 grant to be used for tobacco control project/s by LGUs which are able to sustain the distinction for three (3) consecutive years. Encouraging LGUs to adopt smoke free ordinances

In 2008, the DOH became the recipient of a financial assistance grant by the Bloomberg Initiative for Tobacco Control for the effective implementation of the Tobacco Regulation Act of 2003 (RA 9211) in Metro Manila. xl The project helped in raising the LGUs’ awareness of the harmful effects of secondhand smoke and the importance of protecting the public from it. It was also instrumental in the renewed vigor for the enactment and implementation of smoke free ordinances. The project also established a system where citizens can report violations of the law, however, LGUs have not yet fully utilized this system.xli At the end of the two-‐year duration of the Project, some LGUs failed to achieve the 100% smoke free standard. In cities like Muntinlupa and Navotas, for instance, the ordinance passed was patterned after RA 9211, which allows indoor smokingxlii In the case of Quezon City, the proposed ordinance went through the third and final reading as required by law, but was eclipsed by the holding of the local elections in 2010 and was thus, not signed by the Mayor. Advocates on the ground attribute these challenges to the significant intervention of the tobacco industry and groups representing its interests.xliii In 2009, the DOH received another grant from Bloomberg Initiative to encourage LGUs to enact and implement 100% smoke free ordinances. As part of the project, 12 provinces were identified, among which are Biliran and Southern Leyte, where intensive lobbying for the promulgation of smoke-‐free legislation is being undertaken. Simultaneous with the implementation of this project, the DOH and community-‐based NGOs continued to lobby for smoke-‐free legislations in other LGUs in the Philippines.xliv As of 2011, almost 100 LGUs have already enacted smoke-‐free ordinances.xlv

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DOH and DILG Partnership The campaign for a smoke-‐free Philippines has also resulted in the creation of partnerships between regional offices of government agencies.xlvi Through a Joint Memorandum Circular, these offices vowed to encourage LGUs within their jurisdiction to enact the “Model Smoke-‐Free Ordinance” developed by the DOH and its partner NGOs. However, on August 23, 2011, DILG Secretary Jesse Robredo issued a Memorandum regarding the proper implementation of RA 9211, which drew the attention of DILG Directors to the definition of “enclosed area” and “public place” in the Model Ordinance developed by the DOH in consultation with tobacco control advocates and other concerned government agencies.xlvii The Memorandum noted that the definitions provided in the Model Ordinance departed from the definition provided in RA 9211. Consistent with Philip Morris’s position papers,xlviii the Memorandum advised all persons concerned to strictly implement the provisions of RA 9211 and its Implementing Rules and Regulations (IRR) and posited that all local ordinances expanding the scope of the prohibitions under RA 9211 are invalid.xlix The Memorandum also referred to an earlier Memorandum Circular issued in 2004, to which the DILG annexed a model ordinance that was in accordance with RA 9211 and its IRR.l As a response, the municipalities of Capiz, a province in the south, signed a manifesto asserting their authority to promote the general welfare by promoting the health and safety of their constituents. The manifesto also affirms their authority under the “general welfare clause”li to carry out the recommendations of the WHO FCTC and to enact and implement 100% smoke free ordinances. It is worthy to note that there is a presumption of validity applies to all laws and policy issuances and that only the courts can make such a pronouncement on the validity of ordinances. Legal experts have opined that there is no irreconcilable conflict between RA 9211 and the Model Ordinance that would render the 100% smoke free ordinances invalid. As of the publication of this report, with over 100 LGUs having 100% smoke free ordinances, there is no known court case or ruling to support the tobacco industry’s claims. Tobacco Industry Interference Continues

The interference of the tobacco industry is greatly felt. Representatives from the tobacco industry continue to encourage LGUs to adopt ordinances that are compliant with RA 9211 instead of the Model Ordinance of the DOH. Philip Morris Fortune Tobacco Corporation (PMFTC) has repeatedly utilized a template letter to which the 2004 DILG model ordinance is annexed and would strategically send this letter to all LGUs planning to adopt 100% smoke free policies. The letter states that PMFTC:

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a. Requests for its participation in all public hearings on proposed ordinances related to the sale, use, packaging, distribution, and advertisements of tobacco products; and

b. Recommends the passage of DILG’s model ordinancelii This tactic has greatly hampered the efforts of DOH in encouraging LGUs to enact 100% smoke-‐free policies. The commitment of the local chief executive also plays a big role in ensuring that a smoke-‐free ordinance is passed and implemented in the locality. In most cases, enacting the local legislation alone remains inadequate when the Chief Executive fails to compel obeisance to the issuances of the local Sanggunian (legislative council). Land Transportation Franchising and Regulatory Bureau (LTFRB) The most visible “No Smoking” signages can be found in all public utility vehicles (PUVs). In 2010, the LTFRB issued a Memorandum Circular “requiring all holders of Certificates of Public Convenience to observe the Smoking Prohibition in all Public Utility Vehicles and Public Land Transportation Terminals as well as prominently post No Smoking signages in their authorized units and premises.”liii A principle of Article 5.3 is also incorporated in the policy by declaring that the agency will not partner with organizations representing tobacco industry interests. Changes in the behavior of the riding public have been observed. Due to increased awareness of the harms of secondhand smoke and the visibility of “No Smoking” signages, people no longer indiscriminately smoke inside PUVs, and passengers are more empowered in asserting their right to be protected from secondhand smoke.liv The Role of the MMDA

The Metropolitan Development Authority (MMDA) took on the role of implementing local smoke-‐free ordinances in Metro Manila in coordination with local government units and the LTFRB. In June 2011, a Metro Manila Council Resolution was issued deputizing the MMDA to enforce the smoke free laws and ordinances in Metro Manila. The MMDA apprehended persons caught smoking in land transportation terminals, PUVs, and other public places covered by RA 9211, the LTFRB Memorandum Circular, and smoke free ordinances. As of February 6, 2012, a total of 19,227 have already been apprehended.lv From the onset, the tobacco industry has questioned the authority of the MMDA in enforcing the smoke free policies, insisting that RA 9211 allows smoking in open or non-‐enclosed spaces.lvi In July 2011, two petitioners who were apprehended by the MMDA filed a case in the Regional Trial Court of Mandaluyong to question the authority of the agency. However, one of the petitioners admitted on television that it was a “planned”

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apprehension and that there was promise of payment from the tobacco industry in exchange for filing the case against the MMDA.lvii A temporary restraining order issued by the Mandaluyong Regional Trial Court has hampered the MMDA’s efforts. Undaunted, Chairman Francis Tolentino has emphatically stated that the MMDA will continue with its campaign against smoking within the limits prescribed by the law.lviii The MMDA’s implementation of smoke-‐free policies and the issues surrounding the interference of the tobacco industry have contributed to the increased awareness of the public about the harms of secondhand smoke and the denormalization of the tobacco industry. Recommendations:

• Encourage and provide assistance to LGUs to adopt and implement 100% smoke free ordinances

• Support the enforcement efforts of the MMDA, the LTFRB, and other agencies to implement smoke free initiatives that are in accordance with Article 8 of the WHO FCTC and its Guidelines.

• Assist local governments and government agencies in preventing and countering tobacco industry interference

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Graphic Health Warnings Only textual warnings in place Despite the three-‐year deadline set under the WHO FCTC mandating State Parties to adopt and implement an effective packaging and labelling system, pack warnings in the Philippines remain ineffective as they are limited to text-‐only warnings at 30% of the front panel of the tobacco packages. RA 9211 is compliant with neither the minimum requirements set out in Article 11 – that health warnings should be rotating, large, clear, visible and legible, and should 50% or more but shall be no less than 30% of the principal display areas, and may be in the form of or include pictures – nor the recommendations in the Article 11 Guidelines for larger warnings with pictures in color and located at the top portion of all principal display areas (front and back or all main faces). Neither is RA 9211 compliant with the prohibition on misleading terms and descriptors set out in Article 11 of the WHO FCTC. Currently, text-‐only warnings appear only in black and white at the bottom portion of the front panel of the pack and with minimal rotation of messages. Tobacco product packs and labels also carry misleading terms and descriptors such as "light" and "mild."

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DOH Administrative Order Requiring Graphic Health Information on Tobacco Packages Hampered by Litigation

On May 2010, the DOH, recognizing the effectiveness of graphic health warnings, issued Administrative Order 2010-‐0013 (AO 2010-‐0013 or the Order) requiring Graphic Health Information and Prohibiting Misleading Descriptors on Tobacco Product Packages and Labels. The DOH cited, among others, the constitutional right to health, the Consumer Act, the WHO FCTC, and the International Covenant on Economic, Social, and Cultural Rights (ICESCR) in issuing the Order. AO 2010-‐0013 requires tobacco companies to place graphic health information on the upper portions of at least 30% of the front panel and 60% of the back panel of the packages of their products.lix AO 2010-‐0013 also prohibits tobacco packaging and labelling from promoting a tobacco product by any means that are false, misleading, deceptive, or likely to create an erroneous impression about the product’s characteristics, health effects, hazards, or emissions, including terms, descriptors, or any other signs, including misleading descriptors such as, but not limited to, “low tar,” “light,” “ultra-‐light,” “mild,” “extra,” or “ultra.” Tobacco packages that do not comply with the mandate of AO 2010-‐0013 shall be prohibited after 90 days from the effectivity of the Order.lx Non-‐compliant products will be subject to seizure, recall, and destruction by the proper authorities.lxi However, the tobacco industry immediately challenged AO 2010-‐0013. To date, five suits filed by different tobacco companies assailing the Order are pending before various courts in the country. The tobacco industry primarily challenged the authority of the DOH to issue such an Order, citing Section 13(g) of RA 9211, which states that no other printed warnings shall be placed on cigarette packs except those indicated in RA 9211. The tobacco companies further alleged that compliance therewith would subject them to penalties under RA 9211. As of December 2011, two of these cases are pending before the regional trial courts, while one is pending before the Court of Appeals (CA). Two cases have been elevated to the Supreme Court on various challenges to the orders of the lower courts. According to renowned legal experts, the DOH has clear mandate under the law to issue and implement graphic health information on tobacco product packages.lxii The key

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findings and recommendations of the Joint DOH and WHO Capacity Assessment on the implementation of effective tobacco control policies in the Philippines provide that despite the challenges by the tobacco industry, the DOH may push forward with the implementation of AO 2010-‐0013.lxiii In addition, the DOH can also support and encourage LGUs to implement AO 2010-‐0013.lxiv LGUs have the authority to implement administrative orders under the Local Government Code.

To support the action of the DOH, former DOH Secretary Juan Flavier and 159 other petitioners representing smokers, relatives of smokers and victims of smoking-‐related illnesses, children, youth, and concerned citizens filed a Petition for Declaratory Relief seeking a judicial construction of AO 2010-‐0013 in relation to Section 13(g) of RA 9211 and Article 11 of the WHO FCTC. The case was filed against thirteen tobacco companies and sought a declaratory judgment on the validity of AO 2010-‐0013. The Makati Regional Trial Court however dismissed the petition on the ground that the petitioners have no legal standing to institute the case and that the matter is between the DOH and the tobacco companies. Thus, on December 16, 2011, the case was elevated to the Supreme Court through a petition for certiorari. In January 2011, five former Secretaries of the DOH filed a Motion to Intervene and a Petition-‐in-‐Intervention in the Supreme Court in one of the cases filed against the Department of Health. The former Health Secretaries stressed the necessity and legality of putting Graphic Health Information on cigarette packs and stated that “the meddling of the tobacco industry is preventing the DOH from carrying out its mandate to protect and preserve the health and lives of Filipinos.” In March 2011, the Supreme Court ruled to allow the intervention of the petitioners.

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Legislative efforts Between 2007-‐2008, various bills were passed to amend RA 9211 and provide for picture-‐based health warnings. However, the strong tobacco lobby and the staunch and overwhelming support of Members of Congress from tobacco-‐growing provinces thwarted the legislative initiative.

Among neighbors Vietnam, Hong Kong, Singapore, Thailand, Brunei, and Malaysia, the Philippines remains the only country that is in violation of the minimum requirements of Art 11 of the FCTC. Except for Vietnam, all of these states have graphic health warnings. To date, four bills pushing for picture-‐based or graphic health warnings on cigarette packs are pending deliberation in the Committees on Health of the Congress and the Senate, particularly House Bills 2416, 2510, and 3693, filed by Representatives Neil Tupas, Raul Daza, and Teodorico Haresco, Jr., respectively, and Senate Bill 2340 endorsed by Senator Pia Cayetano, None have been identified as a priority bill by the President.

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Recommendations: • The DOH should implement the AO 2010-‐0013 and encourage and provide support

to LGUs to enforce the AO 2010-‐0013 at the local level. • The government should comply with the minimum standards of the WHO FCTC.

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TOBACCO INDUSTRY INTERFERENCE The Tobacco Industry In February 2010, Philip Morris Philippines Manufacturing, Inc. and Fortune Tobacco Corporation joined forces to dominate more than 92% of the total market by forming a joint venture corporation called Philip Morris Fortune Tobacco Corporation (PMFTC).lxv Despite the industry’s claim that the economy will be adversely affected once tobacco control measures are put in place, the fact remains that the Philippine economy is not dependent on the rise and fall of the tobacco industry. In fact, employment in the tobacco industry is less than one percent of total employment in the country.lxvi However, this fact does not hinder the tobacco industry from astutely using farmers’ groups to push for industry interests. Tobacco groups like Philippine Tobacco Growers Association (PTGA) and Cagayan Tobacco Producers Association (CTPA) have been very vocal against the restructuring of the tobacco tax system and are lobbying against the implementation of the WHO FCTC.lxviilxviii Other organizations, such as the Philippine Aromatic Tobacco Development Association Inc. (PATDA), lobby not only through the media but also directly to the President on issues related to banning the use of ingredients in the manufacture of cigarettes.lxix The Philippine Tobacco Institute (PTI), an association representing local cigarette manufacturers and importers, leads the lobbying efforts of the tobacco industry. Newsbreak reported that PTI receives contributions from different tobacco companies based on market share and that this is primarily used as “lobby money” lxx

Strongest tobacco lobby in Asia The Philippines has long suffered a reputation for endemic political corruption. Evidence spanning 30 years (1962-‐1992) reveals that foreign tobacco companies sought to work within this operating environment.” K. Alechnowicz & S. Chapman, “The Philippine Tobacco Industry: The Strongest Tobacco Lobby in Asia”

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CSC-DOH Joint Memorandum Circular To resist the strong influence of the tobacco industry, the DOH and the Civil Service Commission (CSC) spearheaded the protection of the bureaucracy from tobacco industry interference through the issuance of the CSC-‐DOH Joint Memorandum Circular (JMC) in 2010. Since the issuance of the JMC, it has been observed that there has been a decrease in agency partnerships with the tobacco industry from 2010 to 2011 as compared with reported instances of partnerships in the previous years.lxxi It has also been reported that government agencies and LGUs have used the JMC to ward off tobacco industry interference.lxxii The JMC and the consultative process through which it was adopted prompted an increasing number of policies implementing Article 5.3 principles and growing interests in different agencies to adopt their own 5.3 policies.

Other agencies that have adopted policies implementing the recommendations of Article 5.3

• The Land Transportation Franchising and Regulatory Board provided in its

Memorandum Circular that the agency shall not partner with organizations representing the interests of the tobacco industry in the implementation of its smoke free policy.

• The Commission on Higher Education issued a memorandum directing Regional Directors not to receive any contributions from the tobacco industry.

• The National Youth Commission has an internal policy prohibiting sponsorships from the tobacco industry.

• The Department of Health issued a Department Memorandum incorporating the principles and recommendations of Article 5.3 and its Guidelines.

• The Department of Science and Technology issued a Memorandum that adopts the recommendation of the DOH not to receive donations because partnership with, or the creation of perception of such partnership with the tobacco industry goes against the country’s commitment to the WHO FCTC.

• The Food and Drug Administration adopted Article 5.3 principles in the Implementing Rules and Regulation of the Food and Drug Administration Act of 2009.

Key features of the CSC-DOH JMC • It covers all government officials and employees under the

jurisdiction of the CSC • Prohibits unnecessary interaction with the tobacco industry • If interaction with the tobacco industry is strictly necessary for

its effective regulation, transparency must be observed and the interaction should be carried out in such a way to avoid the creation of any perception of real and potential partnership or cooperation

• Prohibits giving preferential treatment to the tobacco industry • Prohibits the acceptance of gifts, donations, and sponsorship

from the tobacco industry • Prohibits having financial or material interest in any

transaction involving the tobacco industry requiring the approval of their office

• Requires officials and employees to avoid conflicts of interest with the tobacco industry

Duties of head of each agency • Inform the officials and employees about the policy against

tobacco industry interference • Amend their Codes of Conduct and incorporate the Guidelines

in Annex A of the JMC

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Through the efforts of CSC, DOH, and CSOs, there is heightened awareness and resistance to tobacco industry interference in the local government units. There are also anecdotal reports of LGUs rejecting donations or so-‐called CSR contributions from the tobacco industry. lxxiii

Challenges in Implementing Article 5.3 Executive level

Lack of awareness of Article 5.3 in key agencies

There is an urgent need to raise awareness of Article 5.3 and its Guidelines to protect against tobacco industry interference. This is necessary to avoid situations such as the inclusion of Fortune Tobacco Corporation magnate, Lucio Tan, in the delegation of the President to China.lxxiv A higher level of awareness about the anti-‐public welfare reputation of the tobacco industry may ensure that the President’s would avoid releasing a message of support for the tobacco trade show that will be held in Manila in March 2012 lxxv

Tobacco industry’s membership in the IAC-T

RA 9211 created an Inter-‐agency Committee-‐ Tobacco (IAC-‐T) to oversee the implementation and administration of the provisions of RA 9211. An unusual feature of the law is that it included, among the members of the IAC-‐T, a representative from the tobacco industry, the Administrator of the National Tobacco Administration, and other agencies that have consistently promoted the interests of the tobacco industry. The tobacco industry thus continues to participate in policy actions for its regulation and draws legitimacy from its membership in the IAC-‐T.

Tobacco industry’s partnership with the government and CSOs

Recommendations of Article 5.3 Guidelines

• Raise awareness about the addictive

and harmful nature of tobacco products and tobacco industry interference

• Limit interactions with the tobacco industry and ensure the transparency of interactions that occur

• Reject partnerships and non-‐binding or non-‐enforceable agreements with the tobacco industry

• Avoid conflicts of interest for government officials and employees

• Require transparent and accurate information from the tobacco industry

• Denormalize so-‐called socially responsible activities by the tobacco industry

• Do not give preferential treatment to the tobacco industry

• Treat State-‐owned tobacco industry in the same way as any other tobacco industry

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The tobacco industry continues to keep its close ties with top officials in the government and its partnerships and so-‐called CSR activities with different agencies. Examples include:

• PMFTC partnership with the Department of Environment and Natural Resources for coastal clean-‐up (DENR)lxxvi

• PMFTC partnership with the Department of Education (DepEd)lxxviilxxviii • PMFTC donation to Red Crosslxxix • Bureau of Customs Memorandum of Understanding with Philip Morris to

curb smugglinglxxx • Japan Tobacco partnership with Gawad Kalinga for building of low-‐cost

housing for the poorlxxxi

In 2011, new and continuing partnerships have been monitored, namely:

• Joint Declaration between PMFTC and the Technical Education and Skills Development Authority (TESDA)lxxxii

• PMFTC donation of relief goods and money to Alay sa Kawal Foundation received by Vice President Jejomar Binaylxxxiii

• Donation of mechanized ashtrays to Aklan Citylxxxiv • PMFTC donation of satellite audio-‐visual equipment to Moscoso Memorial

School in San Jose, Antiquelxxxv • Partnership with the DENR for the “BA2D2 butt litter campaign”lxxxvi

Interference at the Local Level Strong interference at the local level remains, particularly in LGUs that have been pushing for stricter tobacco control ordinances. Reports have shown that there are LGUs still accepting donations and participating in so-‐called CSR activities of the tobacco industry. For example, the mayor of Aklan received donations of ashtrays from PMFTC after it announced that it is implementing a smoke free ordinance. Some LGU officials, after meeting with tobacco industry representatives, would change their minds about enacting stricter tobacco control measures or would block the passage of FCTC-‐compliant ordinances. Strong interference is also felt in the implementation of the ban against tobacco advertisements, promotions, and sponsorships (TAPS). With the ban of advertisement in mass media, the industry has shifted its focus to point-‐of-‐sale (POS) establishments, which is now the principal venue for marketing and promoting cigarettes.lxxxvii The tobacco industry contracts with stores to put posters, lighted signs, billboards, and promotional items such as ashtrays, tissue holders, and parasols. When LGUs would remove the POS advertisements or would plan to enact stricter measures against TAPS in accordance with Article 13 of the WHO FCTC,

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representatives from the tobacco industry would talk to the officials of the LGU and would warn them that such move would violate the provisions of RA9211.lxxxviii

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The 5.3 Committee plays a role in countering tobacco industry interference. For example, upon learning that Baguio City received donations of ashtrays from PMPMI, members of the Committee met with the Mayor of Baguio City. After a meeting on Article 5.3, the Mayor refused further support from the tobacco industry.lxxxix

The Fight for Authority to Regulate Tobacco The Administrative Code and the Food and Drug Administration Act (FDA Act) confirm the regulatory powers of the DOH, through the FDA, over all health products. However, the IAC-‐T and the National Tobacco Administration (NTA) have continued to assert jurisdiction over tobacco and refused to recognize FDA’s jurisdiction. xc The mandate of the NTA is to promote the balanced and integrated growth of the tobacco industry to help make agriculture a solid base for industrialization.xci This aim is inconsistent with the purpose of the WHO FCTC to reduce the supply of tobacco products by promoting economically viable alternative livelihood to tobacco farming. Tobacco farmers would like to shift to alternative crops or find alternative livelihood due to the increasing capital and labor requirements of planting tobacco.xcii The NTA on the other hand, even encourages tobacco promotion by allocating money to provide incentives to tobacco growers to continue tobacco production.xciii An emerging strategy of the tobacco industry is the attempt to get another seat at the table, particularly, the inclusion of representatives pushing for tobacco industry interests in the government delegation to the Conference of Parties to the FCTC, its subsidiary bodies, and its working groups.xciv xcv xcvi For instance, the NTA has been pushing for its participation in the Working Group Drafting Guidelines on Articles 17 and 18 of the WHO FCTC. Including NTA in the Working Group will violate Article 5.3 of the FCTC as the Governing Board of the NTA includes representatives from the tobacco industry.xcvii The Guidelines implementing Article 5.3 recommend that Parties should not nominate any entity working to further the interests of the tobacco industry to serve on delegations to meetings of the Conference of the Parties, its subsidiary bodies or any other bodies established pursuant to the decisions of the Conference of the Parties.

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Legislative Level Members of the House of Representatives who hail from tobacco-‐growing provinces continue to assert their power and send letters to agencies implementing tobacco control measures:

• Members of the House of Representatives wrote a letter to DOH Secretary Enrique Ona questioning the procedure undertaken by the agency in receiving funds from the Bloomberg Initiative Grants Program, and the strategy in the implementation of Article 8 of the WHO FCTC. The letter also alleged misrepresentations made by regional officials in the implementation of 100% smoke free ordinances.xcviii

• Representative Eric Singson wrote to Secretary Ona expressing his concern about subjecting the Department of Agriculture and the NTA to an evaluation by “so-‐called local and foreign experts” in connection with the Joint DOH and WHO Tobacco Control Capacity Assessment, and that such evaluation “constitutes contempt and disrespect for our national institutions.”xcix The letter also alleged that the FDA does not have regulatory jurisdiction over tobacco.

• Representative Eric Singson also wrote to MMDA Chairman Francis Tolentino about the grant received by the Metro Manila Development Authority from the Bloomberg Initiative Grants Program.c

There are also pending bills in Congress that intend to provide incentives to companies conducting CSR activities,ci and to change the composition of the IAC-‐T to exclude the tobacco industry and the NTA. Judiciary Level The tobacco industry has become more litigious and has actively challenged tobacco control measures being adopted or implemented by the government. Multiple and duplicitous lawsuits filed against tobacco control measures include:

• 5 cases against the DOH AO 2010-‐0013 • Case against the FDA Implementing Rules and Regulations • Case against the MMDA enforcement of smoke-‐free environment policies • Cases questioning the DOH rule prohibiting the grant of permits for tobacco

promotions

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(Photo Collage)

CSR with Cabinet Members

Vice President Jejomar Binay receives relief goods from PMFTC to be distributed to victims of tropical storm Sendong. Photo credit: Manila Standard Today, December 27, 2011.

Vice President Jejomar Binay displays a check for the Alay sa Kawal project of the Will Foundation Inc. received from PMFTC Inc. president Chris Nelson. It aims to provide livelihood projects for

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windows of slain soldiers. Among those who witnessed the simple turnover ceremony were the board of trustees of the foundation and friends. Source: Manila Standard Today, January 20, 2012

CSR with LGUs PMFTC Inc. president Chris Nelson presents a cigarette butt litter bin to Malay, Aklan Mayor John and Boracay Island administrator Glenn Sacapano Photo credit: Philippine Star, March 28, 2011

CSR for Education, Environment, and Social Welfare

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The 103-year-old main building of the Francisco Benitez Memorial School in Pagsanjan, Laguna gets a new coat of paint as Philip Morris Philippines Manufacturing Inc., led by managing director Chris Nelson (above, painting handrail in the school), joined the Department of Education’s Adopt-a-School Program and Brigada Eskwela. Through its “Embrace” advocacy campaign, Philip Morris Philippines is helping improve the quality of public education in the country. Source: The Philippine Star, July 4, 2010.

School gets satellite audio-visual equipment

PMFCT Inc. president Chris Nelson turns over a plaque to the teachers and students of the Assemblyman Segundo Moscoso Memorial School on San Jose. Antique to signify the public school’s connectivity to a satellite-based educational television system. The contribution is part of Embrace, which is the company’s advocacy in education, environment, disaster relief, livelihood, medical missions, agriculture development, and nutrition programs. For te education project, PMFTC partnered with the Knowledge Channel Foundation Inc. (KCFI), which is a non-profit, non-government organization backed by the country’s largest broadcasting company. Also in the photo is Antique Gov. Exequiel Javier (third from right). Source: Manila Standard Today, October 4, 2011

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PMFTC Inc. Chris Nelson and PMFTC corporate affairs director Bayen Eleno present a cigarette butt litter bin that sports a more compact design to be distributed to local government units which passed anti-‐smoking regulations. Since its launch in 2009, PMFTC has been distributing these bins, called Ba2D2, all over the country as part of its commitment to reduce the environmental impact of its products, Ba2D2 is a Tagalog shorthand for “Ibato Mo-‐Dito (throw it here) Caption and Photo credit Manila Standard Today, November 2011.

Partnerships with the Government

Tesda thrust gets boost. Phillip Morris Fortune Tobacco Corp. (PMFTC) Inc. signing a joint dclaration with authorities from Technical Education and Skills Development Authority (TESDA). Photo credit: Daily Tribune, January 26, 2011

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Anti-smuggling accord. Philip Morris Philippines Manufacturing Inc. (PMPMI) Managing Director Chris Nelson and Customs Commissioner Napoleon Morales signing a memorandum of understanding that aims to curb, if not eliminate, the illegal trade in tobacco products. Also seated with Morales and Nelson is PMPMI Security and Compliance Manager Hermie Colina. Standing (from left) PMPMI Tax Manager Stella Calayag, PMPMI Government relations and Fiscal Manager Chita Herce, PMPMI Corporate Affairs Director Bayen Elero, as well as lawyers Alex Gaticales and Ding Salvador. Source: The Philippine Star, May 16, 2009.

The Future of Article 5.3

The Philippines is an ideal jurisdiction within which to test strong implementation of Article 5.3. The introduction of novel policies implementing Article 5.3 in the face of strong interference by the tobacco industry is a big step, but it is just the first of many that must taken to protect public health from the commercial and vested interests of the tobacco industry. There is an urgent need to amend RA 9211 to remove the inclusion of the tobacco industry and agencies representing its interests in the IAC-‐T. The clear clash of interests will subsist if the government continues to allow the industry it is regulating to be part of the regulatory body. There is a continuing need to denomalize tobacco industry strategies and tactics utilized to interfere with the implementation of public health policies with respect to tobacco control. This can be achieved by raising awareness about tobacco industry interference, monitoring compliance with and strictly implementing the DOH-‐CSC JMC, publicizing efforts to promote Article 5.3, calling the attention of public officials who are not complying with the policies, and instituting appropriate

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actions against all individuals and entities that commit violations of the CSC-‐JMC and other policies relevant to Article 5.3.

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i Department of Health, National Statistics Office, World Health Organization and U.S. Centers for Disease Control and Prevention, Global Adult Tobacco Survey (GATS) (2009). ii The American Cancer Society, The Tobacco aTlas, 38 (3rd ed. 2009). iii Department of Health, National Statistics Office, World Health Organization and U.S. Centers for Disease Control and Prevention, Global Adult Tobacco Survey (GATS) (2009). iv The American Cancer Society, The Tobacco aTlas, 38 (3rd ed. 2009). v Department of Health, National Statistics Office, World Health Organization and U.S. Centers for Disease Control and Prevention, Global Youth Tobacco Survey (GYTS) (2007). The 2003 Global Youth Tobacco Survey shows that there were only 19.6 percent tobacco users among youth aged 13-‐15 years, thus, a percentage increase of 39.3 percent. vi Department of Health, National Statistics Office, World Health Organization and U.S. Centers for Disease Control and Prevention, Global Adult Tobacco Survey (GATS) (2009). vii E. Antonio, Philippine Tobacco Industry and Estimation on Tax Leakages (2008) viii Figure based on 2010 inflation-‐adjusted projection of the 2006 Tobacco and Poverty study estimates of the health/economic costs of four smoking-‐related diseases. World Health Organization, Department of Health, University of the Philippines-‐Manila, and Philippine College of Medical Researchers Foundation, Inc. (2006). Tobacco and poverty in the Philippines. Manila: Authors (2006). ix World Health Organization and Department of Health x Department of Health, National Statistics Office, World Health Organization and U.S. Centers for Disease Control and Prevention, Global Adult Tobacco Survey (GATS) (2009). xi Department of Health, National Statistics Office, World Health Organization and U.S. Centers for Disease Control and Prevention, Global Youth Tobacco Survey (GYTS) (2007). xii World Health Organization JOINT NATIONAL CAPACITY ASSESSMENT ON THE IMPLEMENTATION OF EFFECTIVE TOBACCO CONTROL POLICIES IN THE PHILIPPINES p.6 (2011) xiii Supra note xii at 7. xiv Id xvLeonen, Sy, Reyes and Latuja, TAXING HEALTH RISKS, A POLICY PAPER ON TOBACCO EXCISE TAX AND HEALTH PROMOTION, pp. 60-‐65 (2010) xvi Leonen, Sy, Reyes and Latuja, TAXING HEALTH RISKS, A POLICY PAPER ON TOBACCO EXCISE TAX AND HEALTH PROMOTION, pp. 60-‐65 (2010) 39 (2010) xvii World Health Organization, Tobacco Free Initiative, Taxation http://www.who.int/tobacco/economics/taxation/en/index1.html xviii Leonen, Sy, Reyes and Latuja, TAXING HEALTH RISKS, A POLICY PAPER ON TOBACCO EXCISE TAX AND HEALTH PROMOTION (2010). xix Section 145 of RA 8240, as amended by Republic Act No. 9334 xx Supra note xviii at 16 (2010). xxi Supra note xviii at 19. All brands currently classified as low-‐, middle-‐, and high-‐priced are expected to be classified as middle-‐, high-‐, and premium-‐priced, respectively, if the price classification freeze is removed based on the derived NRP of cigarettes from the NSO price surveys of 2005 to 2010. xxii For 2010, computations are based on projected volume of cigarettes sold for 2010 that are derived from BIR removals data due to lack of removals data for 2010. Supra note xvi (2010). xxiii Supra note xviii at 25 (2010) xxiv Supra note xviii at 24 (2010) xxv Information from Bureau of Internal Revenue on the increasing consumption for low-‐priced cigarettes xxvi Information from Bureau of Internal Revenue on the increasing consumption for low-‐priced cigarettes xxvii Supra note xv at 32-‐33 (2010). xxviii Chino Leyco, “DoF lists priority tax reforms for incoming administration”, The Manila Bulletin, May 14, 2010. Accessed June 7, 2010. http://www.mb.com.ph/node/257324/dof-‐li. xxix Regina Bengco, “LEDAC agrees to prioritize sin tax, repro health measures”, Malaya, August 17, 2011. Last Accessed November 17, 2011. http://www.malaya.com.ph/aug17/news2.html xxx Rep. Act No. 9334 “An Act Increasing the Excise Tax Rates Imposed on Alcohol and Tobacco Products, Amending for the Purpose Sections 131, 141, 142, 143, 144, 145 and 288 of the national Internal Revenue Code of 1997, as Amended.” xxxi Leonen, Sy, Reyes and Latuja, TAXING HEALTH RISKS, pp. 85-‐86 (2010). xxxii Id xxxiii Recommendation 7.1, Guidelines for the Implementation of Article 5.3 of the WHO FCTC xxxiv World Health Organization 2008-‐2013 Action Plan for the Global Strategy for the Prevention and Control of Noncommunicable Diseases

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xxxv WHO Department of Measurement and Health Information, Summary Estimates of Mortality for WHO Member States for 2008. xxxvi WHO, 2010 NCD Global Status Report, at vii.

Globally, the World Health Organization (“WHO”) reports that, in 2008, nearly 2/3 of deaths worldwide (36 million deaths out of 57 million) were due to NCDs, xxxvii DOH NATIONAL OBJECTIVES FOR HEALTH 2005-‐2010, at 181. xxxviii According to the Philippine National Health Accounts, total health expenditures as percent of GDP in the Philippines is around 3.6% from 2005 to 2007. The average annual growth rate for health expenditures for the same period is 4.3%. xxxix http://www.gov.ph/2011/06/02/red-‐orchid-‐awards-‐for-‐34-‐institutions-‐on-‐world-‐no-‐tobacco-‐day/. A May 30, 2011 press release from the Department of Health xl Bloomberg Initiative ti Reduce Tobacco Use Grants Program Available at http://www.tobaccocontrolgrants.org/Pages/40/What-‐we-‐fund xli Reported by Dr. Rowena Rachel Garcia, Department of Health, December 2011 xlii Reported by Dr. Rowena Rachel Garcia, Department of Health, December 2011 xliii Reported by Dr. Rowena Rachel Garcia, Department of Health, December 2011 xliv Smoke Free Albay, Add+Vantage Community Team Services Inc. (ACTS Inc.) xlv Reported by Dr. Soledad Antonio during the Bloomberg Grantees information sharing, September 2011. xlvi http://www.wpro.who.int/NR/rdonlyres/3B69498B-‐FB45-‐4D8C-‐9B1C-‐6C8F2DBF56DE/0/TFIfromRDsReport.pdf.; http://www.pia.gov.ph/?m=7&r=R03&id=42629&y=2011&mo=07. DILG, DOH call for smoke-‐free Central Luzon. July 8, 2011. In December 2010, Region 4-‐A Directors of the DOH and the Department of Interior and Local Government (DILG), respectively, issued a joint memorandum circular (Joint Memorandum Circular No. 2010-‐01) enjoining LGUs within their jurisdiction to enact the “Model Smoke-‐Free Ordinance” developed by DOH and its partner NGOs. Thereafter, Region 3 followed suit with Joint Memorandum Circular No. 2011-‐01 dated June 13, 2011 xlvii DILG Memorandum dated August 23, 2011 xlviii Letter of PMFTC to City Council Secretary of Ormoc City dated July 12, 2010. Letter of PMFTC to Councilor Angelo Agcaoili of Pasig City dated April 6, 2011 Letter of PMFTC to Mayor Joaquin Chipeco of Calamba City, Laguna dated October 19, 2011 Letter of PMFTC to Hon. Teodorico Olegario II, Provincial Councilor of Misamis Occidental dated June 10, 2011 Letter of PMFTC to Governor Luisa Cuaresma, Bayombang, Nueva Viscaya dated June 18, 2010 Letter of PMFTC to Provincial Council Secretary of Naval, Biliran dated July 12, 2010 Letter of PMFTC to Ms. Diwata Fetizanan, Secretary of Provincial Council of Oriental Mindoro dated July 5, 2010 xlix DILG Memorandum dated August 23, 2011 l DILG Memorandum Circular No. 2004-‐85, dated July 2, 200 li Local Government Code, Book I, Title One, Chapter 1, Section 16, General Welfare. -‐ Every local government unit shall exercise the powers expressly granted, those necessarily implied there from, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-‐reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants. lii Letter of PMFTC to City Council Secretary of Ormoc City dated July 12, 2010. Letter of PMFTC to Governor Luisa Cuaresma, Bayombang, Nueva Viscaya dated June 18, 2010 Letter of PMFTC to Provincial Council Secretary of Naval, Biliran dated July 12, 2010 Letter of PMFTC to Ms. Diwata Fetizanan, Secretary of Provincial Council of Oriental Mindoro dated July 5, 2010 liii LTFRB Memorandum Circular No. 2009-‐036 liv Testimonials of cab drivers and passengers lv MMDA 2011 Accomplishment Report, p. 50. Available at http://mmda.gov.ph/2011_MMDA_Accom_Report.pdf. lvi ABS-‐CBN News.com “Smoking in open spaces allowed by law-‐ tobacco firms” Available at http://ph.news.yahoo.com/smoking-‐open-‐spaces-‐allowed-‐under-‐law-‐tobacco-‐firms-‐111834207.html

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lvii ABS-‐CBN News.com “Anti-‐tobacco groups back MMDA smoking ban” Available at http://www.abs-‐cbnnews.com/lifestyle/09/02/11/anti-‐tobacco-‐groups-‐back-‐mmda-‐smoking-‐ban lviii http://www.abs-‐cbnnews.com/nation/metro-‐manila/10/26/11/mmda-‐chair-‐dismayed-‐over-‐smoking-‐ban-‐setback. MMDA Chair dismayed over smoking ban ‘setback’. October 26, 2011. lix AO 2010-‐0013, V(A)(2) lx AO 2010-‐0013, VI(1) lxi AO 2010-‐0013, VI(3) lxii “Lawyers laud DOH’s issuance of AO for graphic health information” Available at http://www.doh.gov.ph/lawyers_laud Last Accessed March 5, 2012 lxiii World Health Organization, Joint National Capacity Assessment on the Implementation of Effective Tobacco Control Policies p. 41 (2011) lxiv World Health Organization, JOINT NATIONAL CAPACITY ASSESSMENT ON THE IMPLEMENTATION OF EFFECTIVE TOBACCO CONTROL POLICIES IN THE PHILIPPINES, p. 8 (2011). lxv L. Balane “Philip Morris, Fortune merger a ‘kiss of death” say critics” Available at http://www.abs-‐cbnnews.com/business/02/25/10/philip-‐morris-‐fortune-‐merger-‐kiss-‐death-‐critics lxvi Austria and Asuncion, “Measuring Employment in the Tobacco Industry” (2008). lxvii M. Go, Tobacco farmers appeal to P-Noy not to raise taxes on cigarettes, The Philippine Star, April 29, 2011. lxviii J. Villanueva, Tobacco Famers: Excise tax reform to benefit only smugglers, counterfeiters Accessible at http://interaksyon.net/article/12414/tobacco-‐farmers-‐excise-‐tax-‐reform-‐to-‐benefit-‐only-‐smugglers-‐counterfeiters lxix Letter of Philippine Aromatic Tobacco Development Association, Inc. (PATDA) to President Benigno C. Aquino III dated 8 October 2010 lxx L. Balane, and J. Llanto, Well-entrenched Interest, Newsbreak, March-‐ April 2010, at 16. lxxi Through media monitoring, a decline in press releases of partnerships between 2009-‐2010 and 2010-‐2011. lxxii Reports from advocates lxxiii Balanga City, Baguio City, Capiz lxxiv V. Bugaoisan “Aquino leaves for China with huge delegation” The Daily Tribune August 8, 2011. Available at http://www.tribuneonline.org/headlines/20110831hed6.html lxxv Message of President Benigno Aquino III to Inter-‐Tabac Asia, dated March 15, 2012 lxxvi The Philippine Star, October 12, 2007, “Philip Morris Embrace Joins Coastal Clean-‐up”. lxxvii Department of Education website, April 2008. lxxviii The Philippine Star, July 4. 2010 Philip Morris joins DepEd’s adopt-‐a-‐SchoolProgram. lxxix Tempo, October 20, 2009, Philip Morris donates 6 million to Red Cross lxxx The Philippine Star, May 16, 2009, “Anti-‐smuggling accord.” lxxxi The Daily Tribune, March 8, 2009 “ JTI donates $115,000 to Gawad Kalinga” lxxxii Daily Tribune, “Tesda thrust gets boost. “ January 26, 2011 lxxxiii Manila Standard Today, December 27, 2011 and Manila Standard Today, January 20, 2012 lxxxiv Philippine Star, March 28, 2011 lxxxv Manila Standard Today, October 4, 2011, “School gets satellite audio-‐visual equiment.” lxxxvi Manila Bulletin, “’Ba2D2’ butt litter campaign on” Available at http://www.mb.com.ph/articles/339589/ba2ds-‐butt-‐litter-‐campaign lxxxvii Southeast Asia Tobacco Control Alliance, Tobacco Industry Surveillance Point-‐of-‐Sale: Tobacco Industry’s Last Domian to Fight Bans on Advertising and Promotions (2011) lxxxviii Report from public health officers of Metro Manila and tobacco control advocates. lxxxix Communication with Mayor Peter Ray Bautista of Baguio City xc Letter of NTA Administrator Edgardo Zaragosa to Ms. Leoniria Anwar, Convention Secretariat of the WHO FCTC dated December 5, 2011 xci NTA’s response to the questions from Hon. Rep. Ana Theresa Hontiveros-‐Baraquel xcii Espino, Evangelista, and Dorotheo, SURVEY OF THE TOBACCO GROWING AREAS IN THE PHILIPPINES, (2009). xciii NTA’s response to the questions from Hon. Rep. Ana Theresa Hontiveros-‐Baraquel xciv Letter of Secretary Alcala to Secretary Enrique Ona, “Philippine Delegation for Article 6 of the FCTC” dated 15 November 2011 xcv Letter of Secretary Alcala to President Benigno Aquino III ”Draft Guidelines for Articles 9 and 10 of the WHO Framework Convention on Tobacco Control” dated 22 October 2010 xcvi Letter of Administrator Edgardo Zaragosa to the WHO FCTC Secretariat “Philippine Delgation for Article 6 of the Framework Convention on Tobacco Control” dated 5 December 2011 xcvii EO 245

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xcviii Letter of Members of the House of Representatives to Sec. Ona on “Receipt of DOH of Foreign Grants from the Bloomberg Foundation and Misleading Advocacy for the adoption of local legislation Purportedly Implementing RA 9211 or the Tobacco Regulatory Act of 2003” dated August 15, 2011 xcix Letter of Rep. Eric Singson to Sec. Ona dated May 2, 2011 c Letter of Rep. Eric Singson to MMDA Chairman Francis Tolentino dated 16 June 2011 ci House Bill 4575, Corporate Social Responsibility Act of 2011

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