On smuggling, trade statistics telling

Amid the escalating word war between the Bureau of Customs (BOC) and industry stakeholders over “rampant rice smuggling,” the Department of Finance has prioritized the reconciliation of conflicting statistics relating to trade and commerce between the Philippines and its trading partners.

A case in point is China’s merchandise exports to the Philippines which amount to $32 billion annually, “but our books show it is only $16 billion,” remarked Finance Secretary Cesar Purisima (“Gov’t to probe importers’ tax payments,” Inquirer, 2/9/13).

To raise tariff collection, which as a percentage of the GDP has declined in the last two years, the BOC need not “collaborate”  with international agencies to reconcile trade figures. Why?

A comparison of foreign trade data transmitted by the BOC (and dutifully compiled by the National Statistics Office or NSO) and Vietnam’s General Statistics Office (GSO), confirms a pattern similar to the China-Philippines trade—meaning, China is not an isolated case. And to think the Philippines trades with a hundred nations!

Based on GSO data, from 2008 to 2010, Vietnam’s exports to the Philippines averaged $1.446 billion yearly against our NSO record of $1.634 billion or a deviation by 13 percent. But for the period 2011-2012, the pattern was surprisingly reversed. Vietnam exports to the Philippines in 2011 and October 2012 were at $1.312 billion yearly; Philippine merchandise imports from Vietnam, consisting of some 1,500 items, based on NSO records, were consistently “undervalued” at $900 million yearly or two-thirds of the GSO’s data. Interestingly, while Vietnam rice exports to the Philippines at $1 billion yearly from 2008 to 2010 dropped to $472 million annually in the last two years, Vietnam’s aggregate exports for all items at the height of the Philippines’ 2008-2010 “rice buying spree” (which earned the Philippines the distinction of being the world’s biggest rice importer) were sustained in the last two years (2011-2012), despite losing a big volume of Philippine rice importation.

In an attempt to trace the “shortfall” of $423 million (P18 billion) for all items in 2012, we take note that the “undervaluation” in rice imports reached $128 million “only” and the 70-percent balance of $295 million or P12 billion presumably came from the 1,500 commodity items.

It defies logic that for the period January-April 2012, the price of rice imports was declared at half the international benchmark prices per ton; against the $446/ton benchmark for 5-percent brokens, Vietnam’s was at $277; India, $240; Pakistan, $270; Thailand, $276. In April alone, rice subject to tariff was declared at $279/ton, and for those deemed tax-exempt, $445/ton. In subsequent months landed costs, as reflected in NSO records, were at par with international quotes. In 2010, private sector imports of  5-percent brokens were valued per ton at $489 vs. $420 quotes, while government paid $649 for 25-percent brokens against the benchmark of $360.

As gleaned from the NSO and Secretary Purisima’s marching orders, it’s about time industry stakeholders and the BOC set their sights on other commodities as well.

Merchandise import statistics don’t lie!

—MANUEL Q. BONDAD,

[email protected]