Data on China’s exports to the Philippines don’t match with shipment volumes reported by importers, the Finance department said on Thursday.
A “massive gap” — actual figures were not disclosed — was discovered during ongoing efforts to reform the Bureau of Customs, the department said in a statement.
Customs Commissioner Isidro Lapeña, who reported the discrepancy to Finance Secretary Carlos Dominguez 3rd, said it was likely due to gross misdeclaration or undervaluation and the possible use of consignees for hire.
The latter, in particular, allows the importer to evade the scrutiny of the Bureau of Internal Revenue, Lapeña said.
In both instances—misdeclaration or undervaluation and the use of consignees for hire—benchmarking and the submission of fake documents allow traders to get off scot-free, he added.
Lapeña told Dominguez that he would be going to China later this month to check on records of exports to the Philippines.
Dominguez instructed the Customs chief to meet with his Chinese counterpart and discuss ways to address the discrepancy.
Lapeña said he was gradually doing away with the practice of benchmarking, which allows traders to expedite the processing of imports without the required inspections, so that correct valuations are determined.
At the bureau’s national office in Manila, customs officers have been directed to ensure that processing is completed in five days instead of one to two months.
Last year, Dominguez said that Finance department efforts improve the efficiency of the tax and customs systems revealed discrepancies totaling P1.8 trillion between import reports and figures recorded by exporting countries.
This led to lost revenues of some P231 billion or around 2 percent of gross domestic product.
A P1.8-trillion gap was also seen in 2014 based the United Nations Comtrade database but Dominguez said this could be the result of timing issues and the exclusion/inclusion of particular goods in reporting.