PRESIDENT-ELECT Rodrigo Duterte on Tuesday said rampant smuggling from all 17 ports nationwide is costing the country P300 million daily in foregone revenues, prompting him to order “zero tolerance” on corruption at the graft-ridden Bureau of Customs.
“In the Bureau of Customs, we are losing an estimated P300 million daily [due to smuggling] in all ports all over the country,” Duterte told the business forum in Davao City.
Duterte did not say where he obtained his figures, which are actually lower than the official government estimate of P200 billion a year or P547 million a day lost to smuggling.
“The corruption must stop. It makes me sick. I have zero tolerance on graft and criminality. I will kill all of you, smugglers and corrupt officials,” Duterte warned.
“That’s why [incoming Customs chief] Capt. Nicanor Faeldon is here. Smuggling and corruption have to stop. If only we could collect the P300 million daily that is lost [from smuggling], we wouldn’t have a problem,” Duterte said.
Official government figures and statistics from the United Nations Commission on Trade or UN ComTrade culled by the Samahang Industriya ng Agrikultura
or Sinag show the annual losses continued to soar under the stint of Customs Commissioner Alberto Lina in agricultural products alone.
“Our data showed that Customs Commissioner Lina has not made a dent on smuggling. Rampant smuggling in five staple commodities—rice, pork meat, poultry, onions, garlic—has continued to this day,” said Sinag president Rosendo So.
So said Sinag will come up with the data on smuggling under Lina’s watch.
“We are still trying to verify the raw data that we have obtained from government and UN ComTrade but on its face, the data show rampant smuggling went unabated under Lina’s stint,” he said.
Citing official government records, So said smuggling of agricultural products from the last five years of the Arroyo government from 2005 to 2009 amounted to P94.87 billion.
The revenue losses incurred from smuggling of the same products in the last five years of the Aquino administration from 2010 to 2014 has more than doubled and totaled P198.05 billion, So said.
So noted that no smuggling of garlic was reported under the Arroyo administration but smuggling commenced under the Aquino administration beginning in 2010 with 36,784 metric tons dumped into the country and steadily increased to 255,393 metric tons by 2014.
“The smuggling of garlic has cost the government some P25.54 billion in lost revenues,” So said.
“In 2014 alone, some 39.94 million kilos of garlic was smuggled in and flooded the markets and sold for P100 a kilo, depriving the farmers of some P3.99 billion in income,” So said.
In 2014, the BOC reported only 1.07 million metric tons of rice entered into the country but the UN ComTrade, which monitored imports from the country point of origin showed some 1.71 million metric tons of rice was imported.
“The UN ComTrade figures vis-a-vis Philippine government data simply show that some 630,659 metric tons of rice was smuggled into the country in 2014 with a market value of P18.9 billion,” So said.
As of June 2015 under Lina’s watch, a total of P36.34 billion worth of rice, pork, chicken, sugar, onion, garlic, carrots and buffalo meat was smuggled into the country, So said.
In the first half of 2015, some P10.9 billion worth of these agricultural products had been dumped into the country’s ports, he added.
“In 2014, the UN ComTrade report shows 107.66 million kilos of pork meat was imported. The Bureau of Animal Industry data show only 64.22 million kilos of pork imports, which means some 43.4 million kilos were smuggled in,” So said.
Based on the BOC report, So said some 158.46 million kilos of pork was recorded but some 57.8 million kilos were misdeclared as pork offal, which has lower duties.
Faeldon on Wednesday said he would shore up collections and improve basic services.
He said he would speed up the computerization of Customs processes and remove the compulsory use of brokerages.
To curb smuggling, Faeldon said, he would limit the “physical transaction” between Customs officers and importers.
“There are at least four reforms that we are envisioning. One is we have to fast-track the computerization,” Faeldon said.
“Another thing is that we want to remove the compulsory utilization of brokerage, because some unscrupulous brokers are using their services to smuggle commodities into the country. We will see what the CMTA [Customs Modernization and Tariff Act] can do to aid us in the transition from compulsory to optional usage of brokerage,” he said, referring to the recently enacted Customs Modernization and Tariff Act.
To clamp down on corruption, Faeldon also plans to create a task force among employees who will be “embedded in the different sensitive posts in the BOC. He said the task force would be formed on the his first day on the job.
Faeldon said they were also looking at possibly extending the conduct of pre-shipment inspections.
“We are doing that already on bulk and break-bulk but we want the containerized goods to be subjected to the shipment inspection. We want to pre-determine the quantity and quality of these commodities before they leave the ports of origin,” he said.
Customs counters, he added, would be set up like tellers at banks, so importers will not be able to choose the agent with which they will transact.
Surveillance cameras in all offices will stream video on the internet to discourage corruption in the agency that accounts for almost one-fifth of total government revenue.
To decongest the sea ports in Manila, Faeldon will push for greater utilization of the ports of Batangas and Subic for southbound and northbound commodities, respectively.
“I consider this a low-lying fruit that can be easily done as long as the traders will agree because they are the ones who will be affected,” he said.
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