Without rein or reason

Malacañang has spoken, or rather, one of the many PR people in Malacañang has spoken: Our leader Benigno Simeon (a.k.a. BS) finds no reason to fire Customs Commissioner Rozzano Rufino Biazon.

Perhaps the latest bombshell called fuel smuggling was not reason enough to our leader BS. It was dropped last week by corporate executive Ramon Ang, vice chair of San Miguel, the biggest conglomerate in the country today, who also happens to be CEO of Petron which, in turn, is the biggest oil company in the country. Ang revealed that the Bureau of Customs, our beloved BOC, has been failing to collect roughly P30 billion a year in revenue from oil imports due to smuggling.

Here is the garish fact from that figure: Smuggling accounts for about one third of the total volume of fuel sold in this country. That is one-third! And our leader BS still finds no reason to fire his boy, Rozzano Rufino?

Perhaps Biazon himself can shed light on the issue. His own website shows he has a valid excuse. And that is, all others before him who held the reins at the BOC also faced the same problem.

Let me see—since nobody could solve the problem of massive smuggling before his time, nobody should be made accountable for the persistent plague to business—is that it? Well and good. Perhaps it just did not occur to our dear BOC chief Rozzano Rufino that, precisely, those BOC bosses before him did not remain customs commissioners.

Malacañang also forgot that the smuggling problem already killed a number of industries in this country. Well, rice farmers complained of massive smuggling of rice, which already discouraged a lot of farmers from planting the staple, due to the drop in prices caused by rice smuggling.

There goes the boast of the Aquino (Part II) administration that this country should achieve rice “self-sufficiency” during the term of our leader BS.

Before we forget, boss, the livestock sector has been complaining of massive smuggling of pork and poultry products—both fresh and canned. The problem did not stop there: electronics, cosmetics, groceries, textile and garments are also the favorite items of smuggling syndicates.

Former Cabinet member Ben Diokno, the UP economics professor, had a simple observation on massive smuggling: it even showed in the economic figures. Well, the GDP grew by 8.7 percent last year, but imports expanded by a measly 2.6 percent. To think, ours has always been an import-dependent economy. No importation, no economic growth, period!

To Diokno, only one thing could explain the GDP growth: massive smuggling.

Business group FPI, or the Federation of Philippine Industries, estimated that massive smuggling denied the government revenue of some P70 billion a year.

FPI based its estimates on actual figures from the IMF, or the International Monetary Fund, which actually compared the figures of exports of other countries to the Philippines with the value declared to the BOC. There was a difference of about $32 billion a year. At 12 percent VAT, that should mean some P70 billion a year in revenue lost due  to smuggling.

The failure of the BOC under our dear Ruzzano Rufino has been glaring enough that even administration-candidate Sen. Chiz Escudero claimed that the massive smuggling of petroleum products was possible only with the conspiracy of BOC officials. Escudero called it the “massive failure” of the bureau.

And then Sen. Panfilo M. Lacson openly attacked the BOC, noting that nobody in BOC had ever been made accountable for the smuggling problem. Look, boss, nobody has ever been relieved in the bureau.

By the way, the med-tech graduate Ruzzano Rufino claimed to the media that he had been doing all he could in his position at the BOC. And yet he could not solve the problem of massive smuggling—you know, complete with the BOC’s appalling record of missed revenues at P70 billion a year.

That the Palace insisted that our leader BS should keep him in the underperforming BOC now leads to the biggest question of all: Why?

I thought the Aquino (Part II) administration vowed to shun politics. I thought the BOC would never be made to contribute to some campaign kitties of some politicos running under the administration banner.

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We received—through e-mail—a reaction from Jose Bernas, the lawyer of PGMC, or Pacific Gaming Management Corp., which has filed cases against the Philippine Charity Sweepstakes Office, or the PCSO, over their contract on lotto operations.

“The PCSO has been crowing about saving money with the “cooperation” of Pacific Online. The issue here is not savings. They are avoiding the real issue, which is about a contract being awarded without any bidding by PCSO to Pacific Online—not just once but twice in less than 12 months. These are violations of existing laws, particularly that on government procurement.

“PCSO allowed Pacific Online to install lotto terminals in Luzon last June. This violates our exclusivity over Luzon as confirmed by the OGCC in 2004. But even assuming there is no exclusivity, PCSO could not have awarded a new contract to Pacific Online without any bidding.

“On top of non-bidding and violation of our exclusivity, PCSO also reduced from 100 meters to 50 meters the distance between terminals/agents. This allowed Pacific Online to rapidly roll out more than 700 terminals in a matter of months.

“Then PCSO gave Pacific Online a new contract—to replace the one that was to expire on March 31, 2013—last week for two years.

“We want a copy of these contracts to find out their legality. We have been asking for the June contract in vain. Now we also want to get a copy of the extension. We need the copies so we know how to protect our interests. Why is PCSO hiding these? Is there anything to hide?

“Regarding charity fund, PCSO makes a big fuss about saving P9M through its “illegal” contract with Pacific Online and adding this P9M to its charity fund. This is a piddling amount and a limp diversionary tactic compared to COA’s 2011 findings.

“The P92.4 million in charity fund PCSO spent for the medical benefits of its employees should have been charged to PCSO’s operating funds.

“The P1.07 billion used for advertising, or 72 percent of PCSO’s maintenance and operating expenses, was an unnecessary expense since PCSO has no competitor and the money better used to help the poor.

“Besides, is saving P9 million, or any amount for that matter, enough to justify violating existing laws on government procurement?

“Instead of penny savings, PCSO should, like any business, look at raising revenues. The present PCSO administration has failed miserably in this sector. Under the present management, sales increases are modest if not flat.

“PCSO has ignored PGMC proposals to make Luzon lotto bigger and better. As a result, PCSO has no new games that could raise revenues.

“It should have bid out the VisMin contract of Pacific Online which could have resulted in even better fees and a new company that would make VisMin more profitable for PCSO than Pacific Online.

“Regarding savings, PGMC has been willing to negotiate with PCSO but PCSO has been as unfair to PGMC as it has been generous with Pacific Online. Last year, PCSO demanded that we, although our contract is still valid until 2015, reduce our rates to 6.5 percent and shoulder the cost of thermal paper and betting slips, which is equivalent to 1.5 percent. In effect, PCSO wanted to halve our rental rate from 10 percent to 5 percent.

“On the other hand, Pacific Online was allowed to reduce its rate from 10 percent to only 9.85 percent.”