OPINION: Catching smugglers means little without successful prosecution

The continued presence of illicit goods in the Philippine market creates a difficult business environment for companies that operate within the law, particularly when illegal traders can avoid the taxes and regulatory costs that legitimate businesses have to shoulder. While enforcement operations may remove smuggled products from circulation, their impact is limited if the people behind these operations can continue doing business without facing the consequences.

This is one of the weaknesses identified by anti-smuggling advocacy group Transnational Alliance to Combat Illicit Trade (TRACIT) in its new report, “Assessing ASEAN’s Performance on the Illicit Trade Index.” The group identified weak follow-through from seizure to prosecution as a central bottleneck in the Philippines’ efforts to combat illicit trade.

The findings point to a problem that goes beyond the ability of authorities to intercept illegal products. When cases fail to progress through the justice system, the commercial networks behind illicit trade can remain active, leaving legitimate companies to compete against businesses that operate outside the same rules.

The scale of the challenge is evident in the consumer market. TRACIT estimates that 86% of vapes sold in the Philippines in 2024 and 2025 were illicit, while unrecorded alcohol accounted for approximately 19% of total consumption. The resulting revenue losses also represent money that could otherwise have gone to government coffers.

For legitimate businesses, the consequences extend beyond lost sales. Companies that comply with tax and regulatory requirements face competitors whose lower operating costs may come from avoiding those very obligations. This creates an uneven market where compliance can become a competitive disadvantage rather than a basic condition for doing business.

TRACIT recommends closer coordination among government agencies and more consistent procedures for building cases against suspected offenders. These measures deserve attention, but their effectiveness will ultimately depend on whether enforcement leads to successful prosecution.

A market cannot operate on fair terms when breaking the rules carries little risk. Confiscating illegal goods may provide temporary relief, but it will not create lasting change if the businesses behind them can simply resume operations.

The Philippines needs an enforcement system that makes illicit trade a costly business to pursue, not one where the risks of getting caught end with the loss of a shipment.

That’s the point.