Senate told 50K tons of rice smuggled into PH weekly

MANILA, Philippines—Some 2,000 container vans with 50,000 metric tons of rice were smuggled into the country weekly in 2013 (or 2.6 metric million tons annually), a customs official told the Senate ways and means committee.

At the hearing initiated by Sen. Juan Edgardo Angara to reform the graft-ridden Bureau of Customs (BOC), Deputy Customs Commissioner Agaton Uvero said that this massive smuggling of rice was reportedly stopped last October, when the new leadership appointed by President Aquino began to assume the helm of the bureau.

Angara is the chair of the Senate ways and means committee.

Uvero, the new deputy customs commissioner for assessment and operations coordinating group, made the revelation while being quizzed by Senate Minority Leader Juan Ponce Enrile.

“Roughly … 50,000 tons a week … at its height,” Uvero said, citing “anecdotal accounts” and government data.

Uvero said the favorite “landing sites” for smuggled rice were the ports in Davao, Cebu and Manila.

This practice, however, has been stopped “based on data,” he said.

“I don’t have data right now,” Uvero later told reporters. He said he was not “authorized to talk.”

Angara was appalled by the magnitude of rice smuggling, telling reporters in an interview after the hearing that revenue that could have been collected by the BOC would have gone to rehabilitating areas hit by

Super Typhoon “Yolanda.”

Angara said it was “too early to wave the white flag. We [in the government] should do what we can. [The new leadership] should do things differently.”

He said the new BOC leadership was still going through the learning curve. “So let’s give them a chance [to do their job].”

Angara conducted the hearing to seek the inputs of industry players and concerned government officials on the measures filed in the Senate seeking to reform the BOC—Senate Bill Nos. 168 (the proposed Customs and Tariff Modernization Act), 442 (a proposed Act Amending Certain Provisions of Presidential Decree No. 1464 or the Tariff and Customs Code of the Philippines), 456 (a proposed Act Instituting Reforms in the Bureau of Customs, Increasing Penalties for Smuggling), 741 and 882 (a proposed Act Amending Certain Provisions of Presidential Decree No. 1464).

Running out of time?

At the hearing, Enrile doubted whether the Aquino administration was on track to eliminating smuggling.

“You have only two years of administration and I hope you will stay there forever … once this administration exits. What can you do in two years?” Enrile asked Uvero.

The senator asked if the BOC could reform the BOC in the remaining years of Aquino’s presidency.

“Why don’t you [just] implement the law? Forget reformation,” Enrile said. “We have a basic problem of management [at the BOC].”

Noting that Uvero and the new set of officials led by Customs Commissioner John Philip Sevilla were just four months on the job, Enrile said: “You have my sympathies, best … of success.”

Uvero represented Sevilla at the hearing.

Bucket full of holes

Sevilla was appointed last December, but Aquino named the five deputy commissioners in October of 2013.

“It’s really rooted in the old system,” Uvero said, explaining the underlying reason for the inefficiencies that continued to plague the BOC despite the computerization of the collection system.

Enrile noted that “smuggling is worsening” under the present administration.

“It has grown now. The level is 30 percent of the imports, of the market, [are] smuggled products,” Enrile said. “Why is it you’re groping in the dark? It seems to me anyway.”

To which Uvero responded: “I believe the priorities of previous administrations have been different. We’re talking of reforms [now],” he added.

Uvero likened the BOC to a bucket full of holes. “You remove people. If the system is still there, there’s still smuggling.”

He said the BOC was looking at systemic solutions using regulations, legislation and manpower solutions.

One such measure was to drastically bring down the number of employees from 6,200 to 3,500, and yet he noted that lately the volume of (import) shipment had improved “tremendously.”

Work of entire government

Enrile told Uvero that it was difficult to cleanse the BOC without the full backing of Malacañang.

“You can’t stop smuggling without the participation of Malacañang. And I’m talking from experience. I succeeded somehow during my time not because of myself but because I had the full backing of the Palace. I’m sure the President is interested (in reforming the BOC),” said Enrile, who once headed the BOC.

Enrile said defeating smuggling was the work of “the entire government, not just one agency,” and this would include the Coast Guard, Navy and police.

“You’re absolutely right. As already indicated, [this] has been an interagency effort to curb smuggling in the country,” Uvero responded.

“We have the full backing of Malacañang,” said Uvero, who was an international trade expert before his appointment to the BOC.

Uvero said that just in the last two weeks, the BOC had caught a lot of incidents of misdeclaration of imported items that passed through X-rays, which were purchased by the government at a cost of $140 million.

“We have been able to reorganize people in Customs in December. We’re moving people around,” he said.

But Enrile was unconvinced. “By doing that, I know that your revenue went down, and it will continue to go down. Moving people in the BOC will not mean anything to us, to me anyway.”

Uvero disagreed, saying revenue actually went up in January.

“The November-December (2013 revenue) showed a 19-percent increase, compared to year on year, month on month,” he said.

He said the 19 percent was way better than the 6-percent increase in BOC revenue for the whole 2013.

Accreditation ‘payoff’

Asked by Enrile if the BOC was already meeting its target, Uvero said: “Not yet. But we have very good numbers.”

At the same hearing, Jesus Arranza, the Federation of Philippine Industries (FPI) chair, disclosed the alleged “payoff in the accreditation” of importers.

“I have nothing against the broker but I have a friend who is not working now. He put up his own company. So the first time he would like to import, he called a broker,” Arranza said.

The broker then presented a list of 10 companies.

“[The broker] told him, ‘Here are the 10 companies. They are already registered, accredited in Customs. Just choose what you want to use,’” Arranza said.

He then proposed to the committee that the accreditation of importers or companies be done by the Department of Finance.

It was FPI that earlier disclosed that the government had lost more than P1.33 trillion in revenue in nine years, from 2002 to 2011, due to technical smuggling in the country’s ports.

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