JFC: Smuggling ‘rampant’
March 5, 2013 at 18:07
THE government must immediately focus on plugging what former Finance Secretary Roberto de Ocampo described as a gaping “smuggling hole” estimated at $20 billion annually if it wants to preserve the gains it has made in the manufacturing sector, foreign businessmen and economic experts said on Tuesday.
In an annual assessment of progress made by the Philippines on economic reforms, The Arangkada Philippines Project (TAPP) of the Joint Foreign Chambers (JFC) rated efforts of the government to fight smuggling as “backward/[in] regression.”
“There is a strong perception that smuggling continues to be rampant and widespread,” the second annual assessment of Arangkada Philippines read.
While the private sector, particularly the agro-commodities sector and the Federation of Philippine Industries (FPI), continue to pressure the government, the assessment noted that announcements of seizures of smuggled items tend to reinforce perception that smuggling is “getting worse.”
The economic experts have warned that smuggled goods would threaten the country’s manufacturing and farm sectors since these are not slapped requisite duties and taxes and compete with local products.
The manufacturing sector, de Ocampo noted, is a generator of jobs. If left unchecked, smuggling could also pose a threat to efforts of the Philippine government to create more jobs.
Based on figures released by the National Statistical Coordination Board (NSCB), the industry sector grew 7.6 percent year-on-year, faster than the 7.5-percent posted by the services sector in the third quarter of 212. In the last quarter of 2012, the industry sector again recorded faster growth at 7.5 percent, compared to the 6.9 percent notched by the services sector.
During a panel discussion, industry representatives and experts pushed for the creation of an oversight committee that would monitor the activities of the Bureau of Customs (BOC).
“Compared to the other metrics [in the Arangkada Philippines] annual assessment, we did worst in smuggling. [We do need] an oversight committee [that] will monitor the BOC’s activities,“ said Roberto Batungbacal, president of the Samahan sa Pilipinas ng mga Industriyang Kimika and director of FPI.
Rolando Dy, executive director of University of Asia and the Pacific’s Center for Food and Agribusiness, cited a study made by the center that examined the magnitude of smuggling in the Philippines in 2011.
“In 2011, 500,000 metric tons (MT) of palm oil left Malaysia as palm olein [but] some 350,000 tons arrived in the Philippines under a different value-added tax (VAT) classification. There has to be a serious oversight on the informal trade of farm products,” Dy said.
Arangkada Philippines is a comprehensive advocacy paper intended to share recommendations leading to the creation of $75 billion in new foreign investment, 10 million jobs and over P1 trillion in revenue for the Philippine economy within this decade.
The JFC estimates that to achieve these results, the Philippines must focus on more rapid development of the “7 Big Winner Sectors” and “move twice as fast.”
Based on Arangkada Philippines’s assessment, around 65 percent of its recommendations or 290 are already in various stages of implementations.
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