A warning to smugglers

Smuggling, alongside the government’s response to it, received special attention during President Marcos’ State of the Nation Address (Sona) last July 24. It was the most applauded and cheered part of the speech.

In a warning to smugglers, the President said: “Isa sa mga dahilan ng pagtaas ng presyo ay ang mga smugglers. Napapahamak hindi lang ang mga magsasaka, kundi tayong mga mamimili. Bilang na ang mga araw ng smugglers.”

Smuggling also results in government taxes lost, producers losing their livelihoods to cheaper albeit illegal products, and investors being discouraged from unfair competition.

Using United Nations Comtrade statistics, smuggling in the Philippines almost tripled from P500 billion in 2019 to P1.3 trillion in 2021.

Attached is a table which compares the exports reported by four countries and what we report we receive. Although there are some exceptions, the underreported amount is attributed to either outright or technical smuggling (i.e., undervaluation, misclassification or misdeclaration). These countries should get priority attention.

Prevention foremost

Prevention is better than cure. While it is important to penalize smugglers (albeit little seen so far), we must concentrate on preventing smuggling. Key here is the Philippine News Agency report last Jan. 14: “President Ferdinand Marcos, Jr. has sought the assistance of the private sector to intensify the fight against smuggling in the country. He said the present system is not working.”

We have seen rampant smuggling throughout the years, although we saw twice in the past significant success against it when the private sector was asked to be involved through a government-led structure. This came in the form of an oversight antismuggling committee that counted as members five officials from the government (departments of finance, agriculture, trade, justice and local government) and two from the private sector (one from agriculture, the other from industry).

The committee helped reduce the smuggling rate by 25 percent and 31 percent during the administrations of President Gloria Macapagal-Arroyo and Benigno Aquino III, respectively.

After it was abolished, there was no longer an effective check-and-balance system, let alone minimum transparency. In short, smuggling flourished anew.

At the start of the current administration, the legislated public-private Philippine Council of Agriculture and Fisheries’ antismuggling committee requested to meet with the new Bureau of Customs (BOC) commissioner so they could contribute to antismuggling efforts. Alas, he said he could not talk with them on orders “from the higher-ups.”

In a new development, the second and current commissioner is now arranging such a meeting for Aug. 15. It has taken over a year for such a meeting to take place.

Meeting the BOC

In this proposed meeting with the BOC, the private sector members will seek help on specific issues where little action was done, including the death threats received by Cordillera farmers after reporting about smuggling.

They will also recommend various actions, such as a third-party pre-inspection of imports, which is currently being done in 20 countries. Qualified third-party surveyors help ensure that imports conform to a country’s national standards without cost to the government since expenses are already paid for by the exporter.

Based on the table, the private sector will also propose ways of identifying which products from a specific country should be properly monitored.

The private sector will also ask the BOC to recognize that private sector participation in an oversight antismuggling committee was officially approved by the Senate as an important conditionality for the ratification of the Regional Comprehensive Economic Partnership.

The issue of smuggling can’t be significant only when it is mentioned in a speech. The direction mentioned in the Sona must immediately be implemented—alongside transparency and private sector involvement.

The author is Agriwatch chair, former secretary of presidential flagship programs and projects, and former undersecretary of the Department of Agriculture and the Department of Trade and Industry.

Contact is agriwatch_phil@yahoo.