Victory ‍vs smuggling

If the government supports a public-private fight against smuggling, we can score a significant victory. But in the two instances that the Alyansa Agrikultura engaged in this fight, the tide toward victory was reversed because of government’s inaction.

Here is a case of rice smuggling where the private sector catalyzed by the Federation of Free Farmers (FFF) is doing its part. Lower levels of government have helped, but senior government officials have done the opposite.

FFF national manager Raul Montemayor’s June 23 letter to the Department of Finance (DOF) has calculated losses at P2.8 billion due to rice smuggling alone. We itemize this in the table above right.

Much more disappointing is the government’s response to this P2.8-billion loss. This issue was brought up in a Senate agriculture committee hearing on Aug. 28, almost a year ago. Montemayor said: “A top BOC (Bureau of Customs) official promised to look into our findings, but we have not heard of any investigation into the matter.”

Montemayor continues, “Our eva­luation of rice imports in 2020 indicates that most of the anomalies that we reported in 2019 have continued unaba­ted. Very little has been done to rectify deficiencies, check undervaluation and misdeclaration, and retrieve the uncolle­cted tariffs from importers.”

Alyansa Agrikultura, an agri-fisheries coalition of 32 federations and organizations, helped reduce the smuggling rate by 25 percent in 2006. A public-private Cabinet oversight committee was formed against smuggling led by a Cabinet secretary, with four undersecretaries from the Department of Agriculture (DA), Department of Trade and Industry (DTI), DOF and Department of Justice (DOJ). They were supported by an industry (Federation of Philippine Industries) and agriculture (Alyansa Agrikultura) representative. Monthly meetings were held with the BOC. But after a congressman and a son of a Cabinet secretary were identified as possible smugglers, the Cabinet committee was hastily dissolved. With no more transparency and accountability, the smuggling rate inevitably increased yearly.

Many years later, when the smuggling rate increased beyond 30 percent, a lower level public-private committee against smuggling was formed. Alyansa Agrikultura cochaired this with the DOF. The monthly meetings with the BOC were participated in by the DOF, DTI, DA, DOJ and the private sector.

The smuggling rates subsequently decreased as follow: 2014, 36 percent; 2015, 31 percent; and 2016, 19 percent. The drop to 19 percent may have been a result of Alyansa Agrikultura’s recommendation that the meetings be held in the conference room of the BOC commissioner. Unfortunately, a new commissioner refused to meet this committee. Alyansa Agrikultura then took the initiative of having a memorandum of agreement (MOA) with the BOC signed so that the information flow could conti­nue. Three days after BOC Deputy Commissioner Arturo Lachica signed the MOA, he was killed. An Alyansa Agrikultura representative was threatened three times. But since the government terminated the MOA, the death threats were not carried out. With no more transparency and accountability, the smuggling continues.

It is therefore high time we establish once again the public-private committee against smuggling. Led by a Cabinet secretary like in 2006, it should have monthly meetings with the BOC until the smuggling is put under control. Participating will be the same formula for success: DOF, DA, DTI, DOJ and one private sector representative each from agriculture and industry.

We may then not only get the missing P2.8 billion from rice smuggling reported here, but the more than P50 billion in lost annual government revenue from other products. Especially during this pandemic, we should save the revenue and jobs lost because of rampant smuggling made possible because of no transparency, no accountability and a sad lack of government resolve.

The author is Agriwatch chair, former secretary of Presidential Programs and Projects and former undersecretary of Agriculture and Trade and Industry. Contact him via [email protected]