Smuggling and the New Year

2017 can be a landmark year in winning the fight against smuggling.

This is if we formulate and implement a strategy that will rely more on an effective IT-based transparent information system rather than solely on a few good people.

Just as President Duterte has placed high priority on combating drugs, he should also prioritize saving the government more than P200 billion in annual lost revenue from rampant  smuggling. This money can be better used to address the basic needs of our poor. It will additionally save the jobs lost because of unfair competition, as well as provide a better investment climate for additional jobs.

There is bad news and good news. The bad news is that revenue losses amounted to P203 billion in 2015, resulting from a 30 percent smuggling rate.

The good news is that this is a decrease from the 2014 smuggling rate of 36 percent, when we lost P243 billion. More good news is that we have seen very successful antismuggling raids under Customs Commissioner Nicanor Faeldon. From 2009-2015, BOC always missed its collection target. But following BOC’s 12 percent November  collection increase, Faeldon said last week that BOC will exceed its P409 billion target for 2016.

The Department of Agriculture (DA) has also engaged in antismuggling efforts never seen before. Last Nov. 22,  Agriculture Secretary Emmanuel Pinol issued a total  recall of import permits for meat and poultry products because of the proliferation of recycled permits. For the first time in three years, DA finally sent an official representative to the Anti-Smuggling Committee of the National Competitiveness Council (NCC), which reports to the Office of the President.

 Data system

This year, we should implement an antismuggling strategy that will rely also on a system, rather than solely on people. The system will automatically compel those in the bureaucracy to address the antismuggling issues. If committed people like Faeldon and Pinol go, smuggling might again rise. We must therefore rely on a system to prevent this from happening.

It is in this light that we cite a system proposal of United Broiler Raisers Association President Elias Jose Inciong. This was submitted to the DA last Dec. 28.

Three of the six capabilities of the proposed DA trade information and intelligence data system, which is mandated by law, are: 1) Analyze and publish data relevant to safeguard measures on import surges (RA 8800); 2) Obtain data on volume and values of exports of trading partners from sources such as UNCOMTRADE to monitor outright smuggling, undervaluation and misdeclaration; and 3) Automatically reconcile and publish data on minimum access volume, actual import arrivals (including those under the Customs Bonded Warehouse system) and Special Safeguard (SSG) duties payments.

On this third capability, Inciong states: “For the longest time, this is a basic function which the DA, in one of its most blatant and glaring displays of obtuse behavior, does not seem to be interested in performing.”

Such a trade information system as proposed by UBRA must be backed by a unit within DA specifically focused on imports. While the Department of Trade and Industry has the Bureau of Import Services with more than 30 people, the DA has no such body, not even a small division.

Conclusion

While we are grateful for the government’s recent commendable achievements in its antismuggling drive, the current strategy is still reliant mainly on a few good top officials. Today, smuggling remains rampant. A system is sorely needed to supplement the good work done so far. This system will automatically expose smuggling activities. With the new information technology advances, this can be done electronically. Human discretion and corruption opportunities will be minimized.

With this electronic data available to the public, the resulting transparency will be a compelling force in preventing the corruption that goes hand in hand with smuggling.

If this happens, 2017 can then be known as the year the current administration finally succeeded in the fight against smuggling, recovering more than P200 billion in lost annual revenues, and most importantly, saving the jobs of thousands of our countrymen who are now mired in poverty.