MANILA, Philippines — Shares of tobacco companies declined for a second straight day as investors reacted to the government’s newly announced tax increase on cigarettes, which is expected to weigh on sales and profitability in the sector.
Market analysts said the higher excise tax raised concerns over reduced consumer demand, tighter margins for manufacturers, and possible shifts toward illicit cigarette trade. The continued sell-off reflects investor caution as the market assesses the long-term impact of the tax hike on tobacco firms’ earnings outlook.
The government has defended the measure, saying the higher tax aims to discourage smoking, improve public health, and generate additional revenue for healthcare programs. Officials noted that excise taxes on tobacco products are part of broader fiscal and health policy reforms.
Tobacco companies, meanwhile, warned that frequent tax increases could hurt legitimate businesses and farmers, urging authorities to balance public health goals with industry sustainability.
Investors are expected to closely monitor company guidance and future policy signals, as further regulatory changes could influence the performance of tobacco-related stocks in the coming weeks.
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