Stakeholder Perception on Organizational Structure Options for the Establishment of a Tobacco Research and Grading Institute in the Philippines

Abstract

The establishment of a Tobacco Research and Grading Institute (TRGI) is an essential provision of Republic Act No. 4155 for the development of the tobacco industry, for the future of its stakeholders and its potential contribution to national progress. Sustainable development goals (SDG) and innovation pathways must be considered in establishing an organizational structure for TRGI.

Republic Act No. 4155 or An Act to Promote and Strengthen the Virginia Tobacco Industry with provision for establishing TRGI from the Tobacco Fund was enacted 61 years ago on June 20, 1964 and up to the current year, 2025, TRGI has not been established. Tobacco is deeply rooted in Philippine history since colonial times and has been a significant contributor to Philippine agriculture and economy. According to the Bureau of Internal Revenue (BIR) Commissioner, Romeo Lumagui Jr., revenues from the country's tobacco likely reached USD 7.3 billion in 2024 and noted that in 2023 alone, taxes from tobacco products reached more than PHP 134 billion. Republic Act 9211 or the Tobacco Regulation Act of 2003, authorizes the use of a portion of tobacco taxes for health-related programs by the Department of Health (DOH), including allocations for universal healthcare. A portion of tobacco tax revenues is also allocated for the Tobacco Fund which is a special fund for tobacco research that has grown to PHP 92.3 billion as of May 2022.

Sadly, the Tobacco Fund remains unutilized for tobacco research, primarily because the institution which is mandated by law to use the special fund, the TRGI, has not been established. It is high time for the TRGI to be established to siphon funds into the research and development (R&D) programs in the tobacco industry.

The 0.39% GDP spending of the Philippines for R&D, which is below the 1% benchmark recommended by the United Nations Educational, Scientific, and Cultural Organization (UNESCO), can be improved by tapping the Tobacco Fund as provided for by RA 4155 through the TRGI.

The National Tobacco Administration (NTA), which inherited the mandates of the eight former tobacco agencies, including the establishment of TRGI must consider the SDGs in developing a new organizational structure for NTA that can accommodate the establishment of TRGI. Thus, the current NTA management must decide on the proper approach for establishing TRGI, considering the pillars of institution building, innovation pathways for sustainability, and responsible management of public funds.

The primary step would be to study the stakeholder perception on establishing TRGI, specifically to engage the NTA management who are the internal stakeholders, planners and decision-makers of the tobacco agency, through interviews and survey to empirically review the proposed options for a sustainable organizational structure. The result of the stakeholder perception study will serve as a nudge and guide for NTA management to conduct planning workshops and start the change management process for the establishment of TRGI.

Statistical analysis of survey results show that majority of NTA Management stakeholders are in favor of establishing the TRGI with the integrated type of approach.