FPI urges BOC to curb smuggling

MANILA, Philippines - Manufacturers are urging the Bureau of Customs to curb the smuggling of substandard finished products and commodities that hurt subsectors in the industry.

In a briefing yesterday, The Philippine Federation of Industries (FPI) said the rampant smuggling of faulty consumer goods and commodities would discourage investments in the sector.

“Smuggling is badly hurting us. For the government, this is P200 billion in revenues lost to smuggling every year,” said FPI chairman Jesus Arranza.

FPI chairman emeritus Meneleo Carlos Jr. said the manufacturing subsectors most affected by smuggling are agriculture because of illegal entry of onions and rice; garments because of the proliferation of ‘ukay-ukay’; steel because of smuggled steel angle bars; plastic products and tin cans because of under declaration of goods; electrical products because of entry of substandard items and factory surplus; and substandard plywood.

Carlos said most of the smuggled items were found to have originated from China.

“Customs really has to crack down on smuggling,” he said. “Investors would like to do business in the country but would be discouraged.”

Oil smuggling, FPI said, continues to be a big concern as diesel barges unload barrels in various ports, the Subic freeport being one of them.

Oil entering freeport zones are tax-free making it difficult for Customs to tighten control on shipments.

The Finance department has said that the country loses some $500 million in revenues to oil smuggling each year.

Citing United Nations trade statistics, FPI member Ernesto Ordonez said the rate of under-reporting of the value of goods with Customs has risen from eight percent in 2004 to 30 percent in 2011, with the value of under-reported goods valued at $6 billion in 2004 to $24 billion in 2011.

The manufacturing industry currently has a 21- percent share in the country’s gross domestic product (GDP).

FPI will hold the 3rd Philippine Manufacturers and Producers Summit on Nov. 14 at the Hotel Intercontinental in Makati.

To be taken up during the summit are various concerns surrounding the industry as well as maximizing the available human capital in the country.

“The manufacturing sector has the highest potential to generate decent and value-adding employment in the Philippines,” said Carlos.