Estrada’s closure of duty-free shops confirms smuggling – solon

DAGUPAN CITY – Fourth District Rep. Benjamin Lim said President Estrada’s order to Interior Secretary Alfredo Lim to close Duty Free Philippines (DFP) provincial outlets confirmed reports that they are being used for smuggling.

Lim, former DFP general manager during the Ramos administration from 1992-97, said he had denounced the granting of Duty Free provincial operations franchises in Laoag, Davao, Clark and Cebu to the private corporation headed by Lucio Lao Co even before the President had given the closure order to Lim early this week.

When Co’s name came out several times as a suspected smuggler, Lim said he came out in the open questioning the process by which franchises to operate DFP provincial outlets were granted to Co, who is also known as one of the campaign financiers of Estrada.

"When I was still the general manager, the stores were operated by us in the DFP. But the claim of the new management is that it is losing money which could be true. But what I resented was the manner by which it was given to the private sector without a process of selection," Lim lamented.

Lim said there’s an ongoing hearing by the House Good Government Committee regarding the questionable granting of franchises. The committee is supposed to end its investigation at the end of the year.

During the initial hearings, Lim said it came out that there was no bidding done and the franchise was given to Co upon the instructions of Tourism Secretary Gemma Cruz-Araneta.

"But where did Secretary Araneta get her power?," Lim asked.

During Lim’s term, he said he was able to remit to the Department of Tourism no less than P 4 billion. But he lamented the report that for the past two years, its management claimed that they were losing and remitted only P70 million.

"That’s a very big gap. One thing I suspect is that they deliberately allowed DFP to lose money so they can have it fully privatized," Lim theorized.

Lim admits, however, that prior to resigning his DFP post in Dec. 1997, the Asian crisis had affected their sales too.

Lim said Estrada’s closure order was welcome news as it would benefit local producers.

He said this is because the system of granting franchises to DFP provincial operations enables anyone, without having to travel abroad, to buy items sold at these stores.

He added this is detrimental to local retailers in the area. "Since there’s no management control over the franchise, this results in abuse of their franchise as they even resort to bringing in prohibited items like rice, sugar and chicken," he added.

Lim further said that there is also abuse in making people special citizens by allowing them purchases of up to $200 worth of imported goods.

Enterprising businessmen hand a few pesos to the people in exchange for their privilege and sell the items bought at the DFP to other outlets.

This deprives the government of taxes and duties, Lim said.

But Lim said the closure order should spare DFP outlets in airports because they serve their real purpose which is to enable travelling Filipinos from other countries or other people going to the Philippines to buy pasalubong right at the airport.

Lim, meanwhile, said the committee tasked to investigate the questionable grant of franchise is trying to get from the Bureau of Customs and DFP the list of all the importations made by Puregold, owned by Co, which operates the provincial outlets.

But until now, he said, these agencies could not give them the list.