Transparency vs smuggling

It is transparency that is key in winning the fight against smuggling. This must be emphasized now, given the scandalous shabu smuggling case currently hogging headlines. Smuggling exposes our people to the dangers of drugs.

Smuggling also jeopardizes another key objective of President Duterte: Poverty reduction. Present jobs are lost and potential jobs disappear because of unfair competition from cheap and substandard smuggled goods.

In fact, smuggling packs a triple whammy. First, substandard products endanger consumer safety. Second, jobs are lost because of unfair competition. Third, much government revenue is lost because of unpaid taxes. This money could have been used for government projects such as education, health and the “Build, Build, Build” program.

Smuggling cost the government P243 billion in badly needed revenues in 2014. This is 243 times the annual loss from the alleged Napoles scam, which averaged P1 billion a year for 10 years.

Why not reinvent a successful wheel in combating smuggling? This was last seen in 2005, having been abolished only after a year because “big fishes” have already been caught.

I am referring to the Cabinet Oversight Committee on Anti-Smuggling (Cocas). It had a check and balance system that was readily available to critical stakeholders in both the government and private sectors. It decreased the smuggling rate to 6 percent in 2005 from 8 percent in 2004.

Cocas met every two weeks to monitor and guide the Bureau of Customs (BOC) in its activities. It was chaired by a Secretary (then Department of Interior and Local Government chief Angelo Reyes) and composed of undersecretaries from key departments concerned with the issue of smuggling: The Department of Trade and Industry for industrial goods; the Department of Agriculture for agricultural products; the Department of Justice for enforcement; and the Department of Finance for BOC supervision.

Two private sector representatives consistently participated: one from the Federation of Philippine Industries for industry and the other from Alyansa Agrikultura for agriculture.

Because of the very high level government-private sector participation, the BOC Commissioner was always present. The Secretary and the BOC were held responsible and accountable for issues arising during these meetings. Prior to the Cocas, the BOC would generally give little attention to private sector complaints.

Like the Mona Lisa song, these complaints would be laid at the BOC doorstep, where “they just lie there, and they die there.”

Any BOC negligence did not happen when Cocas was existing. The BOC would have no choice but to act on complaints and recommendations.

After the Cocas was abolished, smuggling rate increased to 36 percent in 2014 from 6 percent in 2005.

In 2015, however, the rate went down to 30 percent. This was because the National Competitiveness Council’s anti-smuggling committee started holding its meetings right inside the BOC.

Yet, this committee had relatively little clout compared to Cocas. Since the start of the new administration, members met only twice in the last 13 months.

Even as BOC senior management has made great strides, the BOC lower levels have been largely responsible for the declining tax collection efficiency as a percentage of imports: 12.7 percent in 2015, 10.3 percent in 2016, and 9.6 percent in 2017.

Senator Panfilo Lacson had alleged that bribery at the BOC amounted to an estimated P270 million a day.

To fight smuggling successfully, we need transparency. Why not revive a mechanism like Cocas?