Plug import loopholes

THE PHILIPPINES’ porous borders have not only been a headache to the Bureau of Customs in terms of curbing rampant smuggling. They have also become a public menace as illicit drugs find their way here hidden among containers legally entering the various ports.

Last week, agents of the Philippine Drug Enforcement Agency and the Anti-Illegal Drugs Group of the Philippine National Police seized some P180 million worth of suspected shabu (methamphetamine hydrochloride) in Valenzuela City from alleged members of an international drug network based either in China or Taiwan. Law enforcers also raided the warehouse where the illegal drugs were believed to have been hidden in crates containing heavy-duty turret drilling machines. In effect, the drug syndicate legally shipped the machines to the Philippines last Jan. 3 through the Port of Manila; these were claimed by its consignee on Jan. 9 and brought to the warehouse until last week’s police raid which was based on a tip.

This is not a unique case. Last year, former PDEA head Dionisio Santiago testified at the Senate that much of the illegal drugs entering the Philippines was smuggled through cargo containers lawfully entering the various ports. At one point, former BOC chief Ruffy Biazon also reported the interception of three containers with the needed components to build a shabu laboratory. This could be the reason for the country’s big drug problem. According to PDEA statistics, illegal drugs are prevalent in 92 percent of Metro Manila barangays.

The BOC has a big role to play if the government is to firmly confront the drug problem. A big help is the crafting of a program to modernize BOC control of containerized cargo. The ports handled 1.69 million 20-foot import containers in 2014, or an average of 4,600 inbound containers a day. Former BOC chief John Sevilla has reportedly admitted that due to limited resources, Customs personnel were able to inspect only a small percentage of those containers.

A possible solution has been languishing in Congress for almost a decade: the proposed Customs Modernization and Tariff Act (CMTA), which will overhaul the outdated 1978 Tariff and Customs Code of the Philippines and “help the country transform the Bureau of Customs into a modern and efficient organization [at] par with global standards.”

Sen. Juan Edgardo Angara, who sponsored the CMTA in the Senate, said it would simplify, modernize and align Customs procedures with global best practices. The proposed measure will amend the Tariff and Customs Code to comply with the Revised Kyoto Convention, a blueprint for modern and efficient customs procedures of the World Customs Organization, to which the Philippines has been a signatory since 2010.

“We want to overhaul and modernize the bureau, which has long been perceived as one of the most corrupt and underperforming government agencies in the country,” Angara said. The CMTA, which has gained support from the Joint Foreign Chambers (a coalition of the American, Australian-New Zealand, Canadian, European, Japanese, and Korean business chambers), will simplify and clarify customs procedures, including import clearances and valuations, making the release of goods much faster. What is important is that the bill mandates the use of information and communications technology that will speed up customs operations. This includes the installation of X-ray machines and the deployment of sufficient numbers of personnel in all ports nationwide.

Sadly, approval of the important bill was stalled again last year, when a provision was inserted in the House-approved version that directly contradicted its very essence. A new chapter was added, requiring preshipment inspection, or for import shipments to undergo inspection at the place of origin, at the expense of the shipper, thus raising the cost of imports.

In today’s fast-changing global economy, the foreign business community has emphasized that the Philippines can ill afford not to modernize its customs administration to keep up with changing international standards, to make customs valuation and inspection procedures more transparent and predictable, and to implement automated procedures. Technology and upgrading will not only curb the drug menace. It will also address the smuggling of other goods.

The Philippines is estimated to be losing anywhere between P200 billion and P1 trillion to smuggling yearly. This is no small amount.