• Billions lost in rice, oil imports and bonded warehouses

    Erwin Tulfo

    Erwin Tulfo

    IF the Bureau of Customs (BOC) really wants to meet its tax collection target, all it needs to do is tighten and closely monitor the importation of rice and oil, and thoroughly check the almost a hundred bonded warehouses throughout the country.

    This was the advice of a former BOC official with whom I had a chat Friday night. He divulged to me the various modus operandi in our international ports.

    The former official, who asked not to be named, said that while millions of pesos are lost in the “undervaluing” of imported goods practiced by almost all brokers and importers at the South Harbor and at the Manila International Container Port (MICP), billions and billions of pesos from rice and oil importations slip from the BOC coffers.

    My source said if “undervalue” is the name of the game for general merchandise brokers and importers over at the South Harbor and MICP, “under quantity” is the practice of rice and oil “players.”

    My source explained that a 40-footer container van can hold 520 sacks or 26,000 metric tons of imported rice. When the container van arrives in the country, however, and it is really packed with rice inside, the broker would only declare it to contain 200 or 300 sacks or its equivalent of 10 to 15 thousand metric tons only.

    My former Custom official friend added, “because of the importer’s ‘under quantity’ declaration, he does not only save millions of pesos in customs duties, he still has two to three hundred more sacks to import because he made it appear that he did not use up the quantity he is allowed to import.”

    According to PNoy’s last State of the Nation Address, the country imported 800, 000 metric tons of rice last year, however, it will drop to 300,000 metric tons this year because of the anticipated “rice sufficiency” program of Agriculture Secretary Proceso Alcala.

    “Imaging how many billions of pesos these rice ‘players’ pocketed instead of paying it to the government?” my source wondered.

    According to a National Food Authority (NFA) insider, only two groups were given the permit to import rice after winning it through a bidding, and one of them was awarded to one alias “Mr. di bagayan.”

    My source added that another 350 containers of rice is expected to arrive in the country next week from Vietnam and said to contain 182,000 sacks of rice or 9 million metric tons.

    But, I thought, didn’t PNoy say we would import only 300 thousand metric tons this year?????

    Paging BOC Commissioner Biazon and Intelligence Department Commissioner Danny Lim!!!!!

    * * *

    The same modus is applied to oil importation as oil companies all together allegedly save hundreds of billions of pesos from customs duties and taxes

    My source said that an oil tanker can hold up to 10 million liters of bunker fuel. However, the brokers of each oil company would only declare, with the connivance of course with the BOC examiners, that their shipment is only five million liters.

    The said oil company, therefore, saves millions of pesos from duties and taxes from the five million liters that he did not declare on that shipment.

    How dare these oil companies raise the pump prices of fuel every week when they save hundreds of millions from taxes every year?????

    Biazon and other officials should find a way to check the exact content of each tanker fuel coming in to the country and closely monitor the activities of their examiners that board these ships.


    The BOC, however, loses bigtime in bonded warehouse operations.

    Bonded warehouses are ordinary warehouses, supposedly under close supervision by the BOC, where imported raw materials such as yarn, resins, etc., are stored before sending them out to the local manufacturers, who are expected to make them into a finish product before finally exporting it out of the country.

    The same source explained that these raw materials that come in hundreds of containers every week do not get taxed by the BOC when they arrive. The importer will only be taxed once he exports the finish product.

    The problem, however, is that once these raw materials get out of the bonded warehouse, it will be sold to local manufacturers and will never be made into a finish product or exported back out of the country. In short, the importers of these raw materials do not pay a single centavo in customs duties and taxes, according to my source.

    He added that it would greatly help if Biazon and Lim would study the operations of Red Flower and the Monaco Yarn so they would have an idea of bonded warehousing.

    My source finally said that if all of the three areas of concern, such as the oil and rice importations and bonded warehousing, will be addressed immediately, customs tax collection targets will never be a problem again.



    Please follow our commenting guidelines.

    1 Comment

    1. edison a. calauor on

      The only solution the BOC could take to its aged problem is to enhance its management system. Integrate quality in all its functions and processes by way of including its functional structure a “Service Quality Assurance”.

      Have this “Service Quality Assurance” Headed by one of the Three Kings aided by newly retired BOC personnel to undertake the service quality assurance works. Before 2016, this slippage will be “0”.

      Better still, implement EO 605 on governmental quality management system and have it certifed. Its sure hit, i mean the “0” slippage by 2016.