EDITORIAL

Many industries get away with rampant smuggling

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Without diverting into a discussion of the smuggling of billions of pesos worth of illegal drugs through the Customs bureau, we want to draw attention today to the smuggling carried out in various industries, which is also costing the government billions in lost revenues.

It is deplorable that despite the passage of the Customs Modernization and Tariff Act and the Anti-Agricultural Smuggling Act, the country continues to suffer miserably from the ill effects of illicit trade and smuggling.

Our problem is not the lack of laws or policy, but the lack of implementation of existing laws and policies.

We, in The Manila Times, are troubled by the findings of a study conducted for the Federation of Philippine Industries (FPI), which reports that products worth a total of P905 billion were smuggled into the Philippines from 2011 to 2015.


Conducted by the Center for Research and Communication Foundation Inc. (CRCFI) of the University of Asia and the Pacific (UA&P), the study found that smuggling has been rampant in many industries, notably petroleum, steel, resins, wood, cigarettes, sugar, palm oil and automotive battery industries. They are too many in our count.

The value of smuggled goods was determined by computing the difference between the exports value from the host countries and the import value recorded by the Philippine Statistics Authority (PSA).

You don’t have to be an accountant to realize that there is dishonesty at the root of this discrepancy.

The CRCFI estimated that the impact and multiplier effects of the smuggled goods resulted in a P495.5 billion loss in terms of the country’s gross domestic product (GDP), as well as a P1.1 trillion loss in gross output, P72.2 billion in household income, as well as the displacement of 291,070 workers.

The biggest source of smuggling was the petroleum industry, which accounted for P680 billion worth of smuggled products.

It was followed by steel, with P106 billion worth of smuggled goods.

The smuggling issue is especially important at this time, when the government is anxiously striving to increase tax revenues and expand the tax base through tax reform, because of the huge revenue requirements of the ambitious Philippine infrastructure development plan.

Smuggling short-changes the government of highly important funds; at the same time it hampers the productivity and efficiency of affected industries.

As in the past, the key to improvement in fighting smuggling is better administration, more transparency and less red tape.

We are also mindful of the contribution that dynamic and vigilant industry associations can make toward improving performance in fighting smuggling. The more government and industry work together in this area, the better we will fare in fighting smuggling in the country.

Of course, worrying about smuggling in individual industries will not count for very much until the national leadership finds the will to overhaul the customs authority root and branch. The recent P6.4 billion drug smuggling scandal is only the tip of the iceberg.

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