Around P905 billion worth of products were smuggled into the Philippines from 2011 to 2015, according to the latest study of Federation of Philippine Industries’ (FPI) Fight Illicit Trade (IT) Movement.
The study, done by the Center for Research and Communication Foundation, Inc. (CRCFI) of the University of Asia and Pacific (UAP), found smuggling rampant in the petroleum, steel, resins, wood, cigarettes, sugar, palm oil, and automotive battery industries.
The value of smuggled goods was derived by computing the difference of the exports value from the host countries and the import value recorded in the Philippine Statistics Authority (PSA), according to UA&P Professor Rolando Dy.
The largest amount was recorded in petroleum industry, totaling P680 billion from 2013 to 2015.
This was followed by steel industry, with smuggled goods valued at P106.1 billion; resin, P42.9 billion; palm oil, P30.9 billion; wood, P24.8 billion; cigarettes, P9.8 billion; sugar, P9.3 billion; and automotive batteries, P750 million, from 2011 to 2015.
The impact and multiplier effects of the smuggled goods resulted in a P495.5-billion loss in country’s gross domestic product (GDP), a P1.1-trillion loss in gross output, PHP77.2 billion in household income, and the displacement of 291,070 workers.
“Smuggling weaves a vicious network of negative economic repercussions. Its devastating effects on government revenues and industries spawn vicious circles of economic problems,” the study said.
“Smuggling stirs up negative multiplier effects on gross domestic product, household income, and employment,” it added.
Dy noted that aside from these eight industries, meat and rice smuggling was also rampant.
FPI Chairman Jesus Arranza said in a press briefing on Friday that the Bureau of Customs (BOC) should publish all reference values to strengthen transparency, cut red tape, and fight smuggling.
The study also noted that the Customs Modernization and Tariff Act and the Anti-Agricultural Smuggling, among other government issuances, should be strictly implemented to deter illicit trade.
The implementation of these laws should be coupled with the presence of dynamic, progressive, and vigilant industry associations.
“There is a huge opportunity to plug leakages from illicit trade which can complement the tax reform efforts of the Duterte administration in its Build, Build, Build agenda,” Arranza said.