Customs probing men in ‘ukay-ukay’ smuggling

MANILA, Philippines–Several Bureau of Customs (BOC) personnel are under investigation by the agency for alleged involvement in a syndicate that diverts to the local market smuggled ukay-ukay (used clothes) worth millions of pesos seized by bureau operatives.

The erring customs employees include members of the bureau’s police force and Anti-Organized Crime Group, as well as staffers at the Office of the Commissioner and the customs collection district in San Fernando City, La Union.


A BOC official privy to the investigation identified the personnel under probe but asked the Inquirer not to reveal their names pending the filing of administrative charges against them.

Customs ‘freezer’


The source, who sought anonymity for lack of authority to speak to media, said the investigation was stalled due to the sudden transfer of Leonardo Peralta—who was leading the probe—to the Customs Policy Research Office (CPRO), the so-called “freezer” at the Department of Finance head office, on the signed order of Commissioner Alberto Lina.

The BOC is a DOF-attached agency.

Customs Deputy Commissioner for Intelligence Group Jessie Dellosa questioned Peralta’s transfer, which he said “caught the IG by surprise as no prior consultation or comment was sought” from his office by Lina.

“As such, this office was not able to foresee the need for the proper transition of cases, especially (since) attorney Peralta is the chief of the Investigation Division which has direct involvement and supervision over several ongoing cases of the Bureau of Customs,” he said.

Another customs official, who also sought anonymity, said Peralta had “turned down bribe offers from a Laguna-based trading firm” engaged in illegal ukay-ukay importation.

‘Connect the dots’

“The company is believed to have friends in the right places, allegedly including a DOF undersecretary… so just connect the dots and you will find out the truth,” said the source.


Lina had said that a DOF panel had recommended Peralta’s transfer to the CPRO.

He said he did “not condone corrupt practices” at the BOC, adding that he would “look into the low pay scale of customs personnel, which is probably one of the reasons some engage in corruption, and make the necessary recommendations to the higher-ups.”

Nine other customs “players” or traders are said to be involved in the illegal importation of used clothing.

Ukay-ukay imports are usually misdeclared as general merchandise and other items due to the ban on the importation of used clothes under both Republic Act No. 4653 and the Tariff and Customs Code of the Philippines.

5-20 scheme

Early this year, the Inquirer reported that the government continued to lose millions of pesos in much-needed revenue to the “cinco huli, lusot veinte” or 5-20 ukay-ukay scheme at the bureau.

That is, for every 25 shipments of imported used clothing, five are seized by the agency while 20 are released to the consignees upon payment of “tara” (grease money).

Customs personnel interviewed for this story referred to the “continued proliferation of ukay-ukay stores not just in Baguio City but in other cities nationwide” as proof of the bureau’s failure to stop ukay-ukay smuggling.

Between 2002 and 2011, the government lost more than P1.33 trillion in revenue to smuggling through the ports, according to the Federation of Philippine Industries (FPI).

In a study, the FPI said lost revenue from 2002 to 2008 totaled nearly P890 billion, with further losses of P119.65 billion in 2009 and P326.75 billion in 2010 and 2011.

Losing P200B

President Aquino earlier said the government had been losing at least P200 billion in revenue each year due to smuggling at the ports.

In another development, the BOC’s Intelligence and Investigation Services (CIIS) has ordered an “in depth” inquiry into the anomalous release on May 7 of a shipment of allegedly fake food supplements and other health care products from a customs-bonded warehouse at the Ninoy Aquino International Airport.

Joel Pinawin, CIIS officer in charge at Naia, on Monday called for an “in depth investigation of the incident to determine the liabilities of all persons involved in the release of the shipment” which had airway bill No. 217-5288-6024.

An initial BOC inquiry showed that the imported items, consigned to Jenelyn Higbok of BF Homes, Parañaque City, and composed of 12 packages of food supplements from Karachi, Pakistan, arrived at the Naia on May 1.

The shipment, the subject of an alert order issued by the bureau on suspicion that it contained fake products, was “transferred under guard from the Pair Cargo Warehouse to the nearby TMW Warehouse where it was eventually released” to undisclosed persons, said the CIIS report.

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TAGS: Bureau of Customs, Syndicates, Ukay-ukay
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