Decline in PH smuggling rate seen

FOR THE first time since 2005, the smuggling rate is expected to have gone down to about 30-31 percent last year, as both the government and the private sector continued to implement tighter measures to curb smuggling, the Federation of Philippine Industries (FPI) said Tuesday.

This smuggling rate was approximated by calculating the underreporting rate or the difference between the value reported by exporting countries to the Philippines, and the value recorded by the Bureau of Customs (BOC). A smaller smuggling rate or underreporting rate meant that a country is able to narrow the difference between the reported values, indicating improvements in efforts to curb smuggling.

Speaking at the press briefing Tuesday, FPI member Ernesto M. Ordoñez expressed confidence that the 2014 smuggling rate, which will be released in September this year, will mark a reversal of the increasing smuggling trend in the country today.

In 2005, the underreporting rate stood at only 6 percent, and has continued to rise to 35 percent in 2013.

The 2013 rate was equivalent to a $30.9-billion difference in the values reported by exporters and by the BOC. At this level, revenue losses incurred by the Philippine government were projected to have reached P231 billion.

To help ensure the reversal of the rising smuggling rate in the country, the FPI launched Tuesday the Fight Illicit Trade Movement (Fight IT), touted as the biggest movement ever established in the country that is aimed at stopping smuggling, protecting consumers, and safeguarding the revenues of both the businesses and the government.

“The growing incidence of illicit trade and its damaging effects on industries and the consumers, not to mention its impact on government revenue owing to foregone customs duties and excise taxes, are concerns that prompted us to take a more encompassing campaign to involve local industries and the public,” explained FPI chair Jesus Arranza.

Fight IT brings together major players from industries with some of the most commonly smuggled goods or products such as rice, sugar, corn, palm oil, tobacco, steel, cement, ceramic tiles, among others.

While the FPI had long been at the forefront of fight against smuggling, the launch of Fight IT is expected to cover a wider range of measures that will help the government clamp down on illicit trade.