Biazon-Purisima management legacy

The Biazon-Purisima (BP) tandem can leave a management legacy that can make the blood pressure (BP) of Philippine smugglers shoot up. With them, the smugglers’ days will be numbered. Forgone annual revenues of at least P110 billion will be recovered, and thousands of lost livelihoods will hopefully be restored.

If management addresses the root problem, many of the other problems will easily be solved. Smuggling’s root problem is that there is no transparency when it comes to imports. All imports are listed on the Inward Foreign Manifest (IFM). The IFM identifies the imported product, volume, country of origin, shipping vessel and date of arrival.

To avoid transparency, the Bureau of Customs (BoC) refuses to give this list to any other government agency. For agricultural products, it should give this list to the Department of Agriculture (DA).

If this happens, all DA has to do is compare the imported shipments with the DA’s list of those with import permits. Shipments without these permits can be automatically confiscated upon arrival and the smugglers charged.

But BoC refuses to give this list to DA, though it used to do this under a Memorandum of Agreement (MoA) between the Department of Finance (DoF) and DA signed in January 2007. This was stopped because too many big smugglers were getting caught.

Last April 10, due in large part to a “pork and poultry holiday” protesting rampant smuggling, Agriculture Secretary Proceso Alcala wrote Purisima for the restoration of the automatic IFM transmittal to DA. On May 7, Biazon, in the presence of DoF Undersecretary Carlo Carag, committed to farmer leaders that this would be done.

On May 22, Biazon told the Livestock Committee of the National Agricultural Fisheries Council (NAFC) that this had not yet happened. He said that this still had to pass the DoF.

The NAFC Committee unanimously passed a resolution requesting BoC and DoF to act within seven days so that this root problem of no transparency could be finally solved.

Critical few

The management principle of “critical few” has similar variations, such as the 80-20 principle (where 80 percent of the results are accounted for by 20 percent of the players) and management by exception (where focusing on the exceptional “critical few” will achieve optimal results).

In the pork sector, where 20 percent of the backyard raisers have lost their livelihood from smuggling during the last two years, a main reason given is the misdeclaration of prime pork cuts as offal. These cuts are then undervalued at P21 a kilo with a 5 percent (instead of 30-40 percent for prime cuts) tariff rate. How can our backyard raisers compete with such an unfairly low price?

Abono Chair Rosendo So gave the Alyansa Agrikultura evidence that 63 million kilos were misdeclared as offal in 2011. He recommends that the daily average of 20 containers declared as offal, out of a total of approximately 1000 containers, be inspected in the Customs area.

But a senior BoC official said all containers should be treated the same way. It was claimed that this would delay the release of all the imports.

The BP team should reject this argument. It should instead apply the “critical few” management by exception. Implementing So’s recommendation of inspecting only 2 percent of the containers will not obviously change the flow of all imported products.

Follow-up

At the Agriculture Fisheries 2025 (AF 2025) Conference in February 2011, a recommendation was made to purge the BoC-accredited list of importers with obviously questionable backgrounds.

Last week, the Alyansa got the 2011 list of the top 10 pork importers, ranging from purchases of P218 million to P721 million each. One importer had an address of a sari-sari store, another a condominium, and at least one had equity of less than P100,000. Before the pork holiday, there was no follow-up to the February 2011 recommendation of cleaning up the BoC-accredited importers’ list. Finally, last May 7, Biazon assigned this task to Deputy Commissioner Danilo Lim. It is this kind of follow-up (or “expect-inspect” management system, as former Secretary Jose Concepcion used to say) that we need.

The BP tandem is very competent in applying management principles to curb smuggling. Unfortunately, some unscrupulous BoC employees are withholding or even distorting the import information that should reach them.

If this is corrected, the BP team can leave a lasting legacy of applying management principles, especially those addressing the root problem, focusing on the “critical few,” and systematically following up action on key recommendations. This will undoubtedly raise the BP of smugglers and put an end to the smuggling that is slowly but surely eroding our nation. If anyone can do it, the BP (especially with Purisima’s management skills) team can!

(The author is chairman of Agriwatch, former secretary for presidential flagship programs and projects, and former undersecretary for Agriculture, and Trade and Industry. For inquiries and suggestions, e-mail [email protected] or telefax (02) 8522112.)