Philippines illicit trade risk ranks moderately high in Southeast Asia
The Philippines is facing elevated exposure to illicit trade across several product categories, reflecting enforcement and governance challenges in a key Southeast Asian market. In TRACIT's 2025 Illicit Trade Index, the country scores 51.1 out of 100 and places 69th out of 158 countries, slightly above the ASEAN average of 49.7.
Highlights
- Philippines ranks fifth in Southeast Asia for illicit trade risk with a 'moderately high risk' due to corruption, a large informal economy, and hard-to-police coastlines.
- TRACIT reports 86% of vape products and 19% of alcohol products in the Philippines are illicit, with the illicit pesticides market valued at $514.5 million.
- TRACIT urges the Philippines to lower rights-holder enforcement costs, strengthen customs integrity, and adopt risk-based controls on maritime and small-parcel routes.
Index findings and enforcement gaps
As reported by BusinessWorld, citing the Transnational Alliance to Combat Illicit Trade, the Philippines ranks fifth in Southeast Asia for illicit trade risk and receives a "moderately high risk" designation, with vulnerabilities tied to corruption, a large informal economy and hard-to-police coastlines.TRACIT says these weaknesses are compounded by criminal activity in counterfeit goods, illicit tobacco, pharmaceuticals and environmental markets. It also notes that 86% of vape products and 19% of alcohol products sold in the Philippines are illicit, while the illicit pesticides market is estimated at $514.5 million.
The group also highlights the spread of counterfeit clothing, luxury goods, electronics and cosmetics. It says the Philippines needs to improve consistency, predictability and transparency in the handling of intellectual property cases.
Regional position and policy implications
Within Southeast Asia, Singapore leads the region at 29th globally, followed by Indonesia at 39th, Thailand at 56th and Vietnam at 61st. The Philippines ranks ahead of Malaysia, Brunei, Laos, Myanmar and Cambodia in the 2025 index.TRACIT is calling for lower rights-holder costs in criminal intellectual property enforcement and a shift away from takedown-only approaches toward repeat-offender disruption. It also urges stronger customs integrity and anti-corruption safeguards, alongside wider use of risk-based controls on maritime and small-parcel trade routes.
EU-ASEAN Business Council Executive Director Chris Humphrey says ASEAN has made considerable progress in modernizing customs systems, but adds that regulatory frameworks are only as effective as their enforcement. The findings point to continued pressure on Philippine authorities to tighten border controls and strengthen anti-counterfeit measures.
As highlighted earlier, Malaysia’s review of foreign product entry enforcement focused on protecting local SMEs as digital trade expands.
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