How the BOC can win the war on smuggling

A proven anti-smuggling structure (it reduced the smuggling rate by 25% and 32% at the time – twice, to be exact – it was operational) must be reinstated immediately. With the expected ratification of the Regional Comprehensive Economic Partnership (RCEP), which will allow more subsidized agricultural products to enter our shores, we must protect our agriculture from unfair trade.

Smuggling, in particular, will further reduce the already low incomes of farmers and increase the level of rural poverty, currently at 31%. This number is already double that of neighboring Asian countries.

On February 11, the Philippine Council for Agriculture and Fisheries Legislated Public-Private Sector International Trade Committee had the anti-smuggling efforts of the Bureau of Customs (BOC) as its main agenda for its meeting.

Bigger picture

Commendable achievements in the fight against smuggling were identified. But the question raised was: what is their relevance to the big picture?

For example, a report showed that 50 million pesos worth of contraband rice had been apprehended. Now compare that to BOC records showing that from March 29 to October 2021, tariffs waived for smuggling have already reached 8.85 billion pesos. It’s all about context. The extent of rice smuggling has not even been thoroughly discussed.

As RCEP nears ratification, increased imports mean smuggling is also likely to get worse.

It is now necessary to take the necessary steps to prepare for the RCEP.

The Department of Agriculture (DA) earlier told the Senate that it saw no threats from RCEP, so no preparatory activity was needed. This was countered by a strong statement from 104 organisations, which called for thorough preparation before the country embarks on the trade deal.

A key action they suggested was to strengthen our anti-smuggling measures.

The Agricultural Smuggling Committee today consists of a Deputy DA Secretary, who leads the DA component with four DA agencies. There is no representative of the private sector. The BOC side, on the other hand, is headed by a Deputy Commissioner. Therefore, there is no one in the DA with a higher rank than the Deputy Commissioner to demand transparency and accountability.

During this February 11 meeting, it was suggested that a structure be re-established with senior officials to the BOC Commissioner to perform oversight and support functions at regular monthly meetings. This structure has succeeded. It reduced the smuggling rate by 25% the first time and 31% the second time. Many have concluded that this structure was abolished twice because it proved to be too effective in controlling smuggling (i.e. ‘big fish’ being caught) and therefore needed end it.

Support needed

This proposed structure was explained during a Senate hearing, which was prompted by a privileged speech by the President of the Senate, Vicente “Tito” Sotto III. There, it was communicated that the BOC should not be alone in the fight against smuggling, that it should get support from other ministries and the private sector.

The first structure was called the Cabinet Oversight Committee on Combating Contraband (Cocas). Its chairman came from the president’s office, with undersecretaries from the departments of agriculture, commerce and industry, finance, and justice. They met with the BOC Commissioner monthly, reviewed and supported BOC activities, and received a full update on anti-smuggling initiatives. Two representatives of the private sector assisted them: Alyansa Agrikultura for agriculture and the Federation of Philippine Industries for industry.

Since the private sector knows some aspects of smuggling even better than the government, their contributions were welcomed by the head of the BOC. He even said their support was effective in countering pressure from powerful individuals and smuggling syndicates.

Unfortunately, after successfully reducing the smuggling rate by 25%, Cocas was abolished.

After that, the BOC was left alone with little guidance and no oversight group. Consequently, smuggling increased significantly.

The second structure was the anti-smuggling committee of the National Competitiveness Council, which reported directly to the president. It worked like Cokes. Unfortunately, after registering a 31% drop in the smuggling rate, it was also abolished.

Today, the BOC does not interact with any committee composed of senior officials from different departments and the private sector.

We now need to re-establish a similar structure, especially with the threats the country faces from ratifying RCEP.

The author is Chairman of Agriwatch, former Secretary of Presidential Programs and Projects and former Undersecretary of the DA and Ministry of Trade and Industry. Contact him at [email protected]

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