Customs sets more stringent import valuations to stem revenue decline

MANILA, Philippines – The Bureau of Customs will implement a rigorous valuation system for goods imported into the country to arrest the decline in its monthly collections.

In a statement, the bureau said it was undertaking a stringent valuation method for certain imported products such as oil, rice and steel amid the continued downward trend in import prices globally. Low prices result into low valuations.

The BOC has consistently missed its monthly collection targets this year. In September, the agency, which accounts for a fifth of state revenues, collected P32.65 billion, down 0.8 percent from last year’s P32.9 billion. It also fell more than a fifth its monthly goal of P41.11 billion.

This brought total collections for January to September to P268.23 billion, up 0.9 percent year on year.  The amount, however, was way below the bureau’s P314.17 billion target for the nine-month period.

Customs Commissioner Alberto Lina said the bureau would ask for a lower collection target for 2016, which is currently set at P498.7 billion. “It is too high,” he said.

In particular, the bureau has lost roughly P50 billion this year to the sharp decline in global oil prices. Prices of oil, which accounts for 30 percent of Customs revenues, have nearly halved for the past 12 months.

Prices of  Dubai crude – the benchmark for the Philippines – amounted to $46.14 a barrel as of Sept. 30, down from $96.99 a year ago.

“The price has consistently gone down from $70 to $50 and then now $45. Our assumption is $70 a barrel this year. That’s a lot of losses,” Lina said.

“Strict implementation of valuation rules” will also be applied to balikbayan boxes as they are expected to significantly increase during Christmas season.

Lina, meawhile, insisted that balikbayan boxes are used by smugglers to  evade payment of taxes.

“Sometimes you can see parts of a motorcycle or even guns inside being smuggled in,” he said.

Earlier plans to personally examine balikbayan boxes were dropped after a public outcry resulted into a legislative inquiry.

President Aquino ordered the BOC to refrain from undertaking arbitrary physical inspection of balikbayan boxes except in case where there are derogatory findings.  Instead, all containers of balikbayan boxes would undergo X-ray or K-9 examination.

The good news is the controversy has not resulted into lower balik-

bayan shipments. “There is no decrease in volume of balikbayan boxes being sent in,” the bureau said.