Customs cuts number of bonded warehouses

The Bureau of Customs (BOC) said yesterday it will slash the number of Customs bonded warehouses (CBWs) to 400 or 40 percent of the existing number as it shifts to industry-specific licensing in efforts to eliminate technical smuggling done through Customs bonded warehouses.

At present, the BOC operates around 1,000 CBWs.

The BOC also announced that it is removing the automatic 20 percent reduction in the floor price of its auctioned goods in cases of failed bids, saying that it is shifting to negotiated sale of confiscated goods being sold to the public.

Customs Commissioner Antonio Bernardo said the shift in the BOC’s licensing policy for CBWs would inevitably reduce the number of authorized warehouses through which exporters could import duty-free raw materials.

Earlier, the Philippine Chamber of Commerce and Industry (PCCI) said the present number of Customs bonded warehouses should be pared down to around 30 which exporters said reflected the actual requirement of the export industry.

According to Bernardo, however, the BOC did not want to reduce the number drastically to the point where it could impede trade.

"I think 30 might be too small but its likely that the ideal number would be about half of the existing Customs bonded warehouses," he said.

Bernardo said this would reduce the amount of non-dutiable imports going through the warehouses.

Non-dutiable imports have been increasing steadily over the last few months.

Bernardo said the bureau is still finding out if the increase corresponded with the actual improvement in the raw material requirement of the export industry.

"It’s true that electronic companies account for the bulk of non-dutiable imports, but we want to find out if there is a significant discrepancy between the demand increase and the volume of non-dutiable imports coming in," he said.

In 2002, non-dutiable imports accounted for 58 percent of total imports. This assumed that around half of imported goods are being used as raw materials for exported goods at a time when exports are expected to increase by only six to nine percent.

Bernardo also said the BOC is removing the automatic reduction of the floor price for confiscated goods being sold to the public, saying that failed bids would now be resolved through negotiated sale.

He explained that at present, the bureau automatically reduces the floor price of confiscated goods being sold to the public, supposedly to facilitate the sale of these products.