Only 7% of agri goods smuggled, but there‘s an alarming rise – Salceda
Onions are among the most frequently smuggled agricultural products. This photo shows sacks of yellow onions — declared as used clothes — that agents from the Bureau of Customs intercepted this month at the Port of Manila. (Photo from the Bureau of Customs)
MANILA, Philippines — Though only 7% of the agriculture products entering the Philippines are estimated to be underreported or smuggled, figures from recent years show an alarming rise, according to Albay 2nd District Rep. Joey Salceda.
The percentage covers the years 2016 to 2021 when, of the total world exports to the Philippines amounted to $71.70 billion, of which only $5.317 billion were underreported, Salceda explained during the hearing of the House of Representatives Committee on Ways and Means on Monday.
In his presentation, said this was lower than the percentage of items smuggled into the country — for example, 41% for tobacco and 19% for petroleum.
“If you look at it, it doesn’t seem bad. The world exports to the Philippines is 71 billion, but the Philippine imports from the world is 66 [billion], Salceda, the committee chair, said, speaking in Filipino. “The problem is the trend. It’s getting bigger.”
The percentage of agricultural products smuggled in was around 1% in 2019, but it increased to 6% in 2020 and 10% in 2021, he pointed out.
Prices rising despite more smuggled goods
“So supposed to be, we shouldn’t be concerned about rumors of smuggled onions, meat, CLQ [chicken leg quarter] because, after all, it’s only 7%. So we can let that go. But in this case, since the pandemic [started], agricultural smuggling is suspected to have increased following an increase in underreported agricultural trade,” Salceda said.
The bigger problem, he said, is that was no drop in prices despite the increase in smuggled goods. Normally, according to the economic law of supply and demand, an oversupply would lead to lower prices for products.
But prices of goods, particularly onions, still increased, prompting Salceda to conclude that importers were doing cartelized importation or hoarding items and waiting for prices to rise before releasing them into the market.
As a result, Salceda said the onion prices in the Philippines are more expensive by 457% than the prevailing world prices — and by a whopping 1,691% compared to the cheapest onions — P23.70 per kilogram in Bangladesh.
“Actually, you can buy it for P18.82. The cheapest is actually in Paraguay. In Bangladesh, it is P23.70. This is based on FAO [Food and Agriculture Organization]. So 1,700% is the incentive to smuggle onions. But that would go down,” he said.
“The problem in the Philippines is that instead of falling the prices have risen. So this means there’s another element. It’s called a cartelized importation — because if you move supply to the right side [meaning, an increase], prices should go down,” he added.
Anti-smuggling measures
Salceda suggested some practices to help combat the smuggling of agricultural products:
- create an automatic report system that could detect significant differences in the valuation of the same imported goods in different ports
- allow the reexport of items only from freeport zones
Earlier also, Sultan Kudarat Rep. Horacio Suansing Jr. named several individuals and companies said to be involved in smuggling, asking the committee to subpoena them and the people behind the consignees.
The country is currently grappling with smuggling. Just recently, the Bureau of Customs — the primary agency tasked to detect smuggled goods — intercepted several shipments containing agriculture products that were declared to be different items.
Most of the time, the questionable containers contained smuggled agricultural products like vegetables and spices, particularly onions.
