• Biazon doesn’t understand arithmetic

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    I am reprinting my column (with some deletions) that appeared here in February in order to emphasize my utter puzzlement why even as President Aquino has shamed the Bureau of Customs in front of the nation as a den of thieves, he has kept as its head Rozzano Biazon, who was tasked nearly two years ago to clean it up. Here it is:

    * * *

    I wrote a piece “Smuggling at its worst under Aquino” on November 15, 2012 in the Philippine Daily Inquirer when I was still a columnist there.

    The analysis used data from the International Monetary Fund’s Direction of Trade Statistics and compared the value of imports as reported by the Philippines and the value of exports to it as reported by the exporting countries. Discounted for the exports’ cost of freight and insurance, the difference between the two figures roughly indicates the magnitude of smuggling in a particular country. Many economists have used the technique, even as early as 1965 in an analysis of smuggling in our country at that time.
    smuggling-estimates
    The conclusions form the computations are shocking: Smuggling in the Philippines is at its worst under President Aquino’s first two years in office to June 2012, with the smuggled value averaging $19.6 billion annually, an explosion from the comparable figures of $3.1 billion and $3.8 billion yearly during Presidents Estrada’s and Gloria-Arroyo’s terms, respectively. For the first two years of Aquino’s administration, the estimated smuggling totaled $39.2 billion.

    Subsequent disclosures have bolstered the analysis, the most recent one being Petron chairman Ramon Ang’s claims that massive smuggling of gasoline and diesel has been costing the country P30 to P40 billion in lost government revenues.

    While largely shrugging off my analysis, Customs chief Ruffy Biazon however issued a reply November 19, which is accessible at www.ruffybiazon.ph/?s=Tiglao.

    I was flabbergasted by his response, and you will too if you read it. His reply reveals not only how ignorant he is of how our imports are monitored but also his shocking illiteracy in arithmetic.

    Biazon wrote there: “What may be reported by China as an export to the Philippines may not be reported by the Philippines as an import if it is meant for the Freeport Zones and Economic Zones which utilize imported products in the production of goods which do not enter the domestic market for local consumption.”
    Trade-Statistics20130725
    Such a statement from the Customs chief is alarming. He is saying that imports of the country’s export processing zones (e.g., Clark and Subic Bay free ports) are not included in the country’s import figures, as collated by the National Statistics Office, from which the IMF gets its data for the country’s trade figures.

    This is completely false. If this were true, our import figures for instance of $61 billion in 2012 would be reduced to only $47 billion, to exclude our biggest import — inputs for electronic products mainly assembled in and exported by firms in the export processing zones.

    We really don’t have to go into such counter-factual arguments. While imports to export processing zones are duty-free, the Customs bureau monitors these and reports their values to the National Census Office in its Bureau of Customs Form NO. 2342-CEWE (formerly EPZA Import Tally Form No. 8102).

    Perhaps Mr. Biazon isn’t even aware that there are Customs offices and directors for each export-processing zone. While these Customs officers’ main work is to compile the import figures for submission to NSO since no duties are collected, and to be sure that such duty-free imports are actually used by the firms there, strangely there has always been fierce lobbying by Customs officials to head the units in these zones, especially Subic Bay and Port Irene.

    It gets worse. In his reply, our Customs chief doesn’t even seem to know basic arithmetic. He wrote: ”(Mr. Tiglao’s chart 1) shows that $19.6 B was the value of alleged smuggled goods. It means that in his table, the $19.6B covers a period of two years, or $9.8 B annually.”

    Biazon then claimed “Immediately, it is noticeable that the opening statement of the article, which claimed that the value of smuggling in Mr. Aquino’s first two years totaled $39.2 Billion, is not supported by chart 1 presented in the same article, which shows $19.6 Billion for the same period.”

    But table was very clearly titled “annual average”, that the $19.6 billion is the annual average value of smuggling. To get the total for Aquino’s first two years in office, you multiply that, and not divide it as Biazon did, by 2 and you will come up with the $39.2 billion figure. I’m afraid the concept of an arithmetical average seems to be beyond Biazon’s comprehension.

    Biazon continued: “Mr. Tiglao is claiming that the annual value of smuggled goods is $39.2 Billion. But in (the table) in his opinion piece, it is indicated that the total estimated value of smuggled goods for the first two years of the Aquino administration is $33.2 Billion. Once again, this does not match the statement at the beginning of his piece that under “President Aquino’s first two years, the value of smuggling totaled $39.2B.”

    Our Customs commissioner just can’t seem to read well. The table was very clearly titled estimates of smuggling from “selected countries”, not from all exporting countries. Only eight countries—where our country gets most of our smuggled goods—are included in that table. I calculated these figures to show that as many have suspected the bulk of smuggled items have been coming from China.

    (Note: Biazon has not responded to this column, in contrast to his lengthy reply to my first column posted at his website www.ruffybiazon.ph, in which he boasts that he is a techie. Be careful not to go to www.ruffybiazon.com though, as this very weirdly is a blogsite titled “Mature Dating for the Shy.”

    E-mail: tiglao.manilatimes@gmail.com
    Websites: rigobertotilao.com an www. d trigger.ph

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    12 Comments

    1. joseph pereyra on

      Dapat echeck din ng BoC ang Freeport Area of Bataan (FAB). Tandaan ho natin na yong Bataan Economic Zone ay nag evolve into FAB, another freeport area just near subic..Bakit ba ginawa pa itong freeport samantalang mas OK yong operation ng Bataan economic zone??Malamang rampant or unchecked din ang smuggling operations dito esp fuel. Minsan marami dumating dito na mga HUMMER vehicles. Not sure kung may clearence to sa BoC..Still mas matindi nga talaga ang smuggling as shown in the figures..We’r wondering nasaan ba ang tuwid na daan na to?? PNOY SOS plssss.

    2. Even if he knows his arithmetic, he’s kapalmuks enough to cling to his position like a leech.

      No, I haven’t said this yet.

    3. Even if he knows his arithmetic, he’s kapalmuks enough to cling to his position like a leech.

    4. Not only does Biazon has poor basic arithmetic understanding, but also a pathetic spin story teller.

      Although he desperately twisted the figure thus, 19.6 annual cost of smuggling activity as representing a two year period under PNoy’s admin, this is is not the meat of the controversy. The bottom line here is Biazon did not refute the fact that smuggling in Pnoy’s regime went to high gear, Granting without admitting that his annual smuggling data of 9.6 million is correct, still it is triple amount as compared to those during Erap’s ang GMA’s time.

      In short Biazon is a desperate spin dude. He misfired big time.

    5. bernardo ramos on

      Mr. Tiglao in your previous column about the SONA you were saying the statistics used by the President were not correct.Now you are again saying Mr. Biazon’s arithmetic is wrong.Simple. Both used wrong statistics because majority of the people are not happy spending their time with statistics.The President is popular so his minions are also popular to the people. Anyway, just continue with your expose’ and we just hope and pray that the next election will not be as doubtful and confusing as the two previous elections we had. There is time for everything.They will have their time.Their wrongdoings will be exposed once out of office.

      • these are factual basis. he cited IMF as source. not the yellow media conglomerate that are protecting Noynoy.

        Smuggling is as its worst under the present regime. means mas corrupt sila ngayon. pinagtatakpan lng ng yellow media

    6. Customs Commissioner Ruffy Biazon really does NOT know his math. What can anyone expect from someone who hardly had any work experience before he became congressman just like his boss. Besides, what is his course in college? Is it Physical Education (P.E.) or Medical Technology (MedTech). Pathetic like his boss!
      .

    7. Of course, Ruffy will have to defend himself in order to protect is job also to continue to look good. It is up to the reader which arithmetic is correct, Biazon”s or Tiglao’s.