Recent developments of allegations of smuggling at the Customs Bureau reveal the staggering amounts which end up in the pockets of corrupt officials, instead of in the coffers of government.
Smuggling is an activity that involves the importation or exportation of goods by unlawful means with the objective of evading the payment of taxes.
Smuggling is an illegal method of conducting business; the principal causes of which are greed for wealth, ignorance, and lack of a sense of nationalism.
In a 2008 report by Raymond Palatino titled The Extent and Impact of Smuggling in the Philippines, it stated that “Smuggling is a serious problem that hurts the country in many ways. It deprives government of revenues from uncollected taxes and customs duties. It affects local industries by distorting prices of commodities. Smuggling causes production slowdown, which leads to mass lay-offs, reduced consumer spending, bankruptcies, and lower tax collection. Smuggling has especially benefited from weak governance and chronic political instability.”
The report further added that when the government reduced the tariff rates on imported articles, many economists and merchants expected a decline in smuggling activities. They believed the tariff reduction would discourage illegal importation of goods since there will be fewer taxes to pay on the part of importers.
But even with reduced tariff rates, smuggling persists up to this day. From used clothing and shoes (ukay-ukay) to luxury cars, agricultural products, ceramic tiles, and jewelries, cheap smuggled contraband continue to flood the local market, wiping out most of the earnings of small honest traders.
The author of the 2008 report compared data that showed the disparity of import-export figures between the Philippines and its trading partners.
In 2000, trading partners reported that they exported $45 billion worth of goods to the Philippines; our government figures registered only $34 billion worth of imports. This means that somewhere along the way, more than $10 billion worth of goods were unaccounted for, undervalued, or misdeclared.
In 2002, China exported 3.9 million square meters of ceramic tiles to the Philippines; only 600,000 square meters were recorded in the Bureau of Customs. The following year, four million square meters of ceramic tiles were exported to the Philippines; only 300,000 square meters were recorded in the BOC. The figures are shocking!
At the end of the day, it doesn’t require a rocket scientist to figure out that smuggling clearly destroys our local economy, and exacerbates poverty levels in the country, as manifested by the closure of local industries, a decline in agricultural production, the existence of uncompetitive agricultural products in the market, loss of jobs, unfair competition, loss of government revenues, heightened corruption in the bureaucracy, and risks in consumer welfare.
It would be interesting to see if President Digong can tokhang (toktok-hangyo) those in the Bureau of Customs who are deeply-entrenched in illegal activities.
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Author’s email: [email protected]
