Fire trucks importation just ‘tip of the iceberg’?

THIS IS in reaction to the news report titled “DILG execs face plunder raps in fire trucks deal” (Front Page, 9/19/16).

The reported “undervaluation” of fire trucks imported by the Philippines (PH) from the People’s Republic of China (PROC) in 2015 is no longer a surprise. The shipment’s “declared value” of P306.9 million ($6.9 million) is just 12 percent of the P2.6 billion ($58 million) “contract price,” meaning the Bureau of Customs (BOC) lost “P78 million as only P100 million in duties and taxes were paid.”

A bit of digression. That the “P2.57 billion”—reportedly “the tax on the shipment if valued correctly”—represented the alleged contract price of the 469 fire trucks is perplexing. Why? The P2.57 billion is twice the value of PROC-to-PH exports in China’s records, and 11 times the value of PH-from-PROC imports in Philippine records, as reported by United Nations-Comtrade. Bank records on the payments should settle the issue of whether or not the units were “overpriced.”

Significantly, trade statistics on fire trucks and diesel powered trucks of various tonnages (5-20 tons, less than 5 tons, and more than 20 tons) show that the combined PROC-to-PH exports in 2015 totaled $176.8 million (P7.9 billion) against the PH-from-PROC imports’ $30.7 million (P1.4 billion), a huge variance of 83 percent.

Fire truck imports from PROC in 2015 accounted for less than a fifth of the $176.8 million worth of  PROC-to-PH truck exports—a  tip of the iceberg. Based on the BOC’s tariff benchmarks, the government lost half a billion pesos in the fire trucks importation. Not only that, the PROC-to-PH pork meat and offal exports in 2015 reached $24.2 million versus the $2.5 million reported PH-from-PROC importation of the same products, or just 10 percent.

The combined PROC-to-PH exports for all commodities in 2015 reached $26.8 billion against the $11.8 billion PH-from-PROC imports, a variance of $15 billion.

How much has the country lost due to “underdeclaration and misdeclaration”? The BOC has traced “irregularities in fire truck imports” with the Bureau of Fire Protection as consignee. Why not include other importations made by the private sector as well? To be sure, if government does this, its revenues will zoom.

—MANUEL Q BONDAD, Makati City