Lina: Government losing up to P5 B through balikbayan smuggling

By Prinz Magtulis and Christina Mendez (The Philippine Star), Sep. 4, 2015

MANILA, Philippines – The government is losing about P3 billion to P5 billion a year from smuggling using balikbayan boxes, although the Bureau of Customs (BOC) has only made 38 such seizures over the past six years, valued at P12.3 million.

Customs commissioner Alberto Lina told the Senate committee hearing yesterday a tighter inspection of balikbayan boxes should have been implemented to prevent further revenue loss for the government.

Lina reluctantly apologized before the Senate over the brouhaha caused by the planned opening and inspection of balikbayan boxes in an effort to curb smuggling.

Senate President Pro-Tempore Ralph Recto expressed concern over the planned increase of charges for a container of balikbayan boxes from P80,000 to P120,000, and even up to P180,000 this October.

“This will be passed on to senders of these boxes. If this second round of increases will materialize, the additional charge per box will be P150,” Recto said.

In short, the two increases will force overseas Filipinos to pay an additional P250 per box.

Senate ways and means committee chairman Sen. Juan Edgardo Angara said he hopes to clarify the tax exemptions and additional charges as the Senate continues to work on improving the proposed Customs Modernization Tariff Act (CMTA).

Figures obtained by The STAR showed 38 confiscations of balikbayan boxes by the BOC in the Ports of Cebu and Manila, the Ninoy Aquino International Airport and the Manila International Container Port (MICP), the country’s largest.

From 2009 to 2012, 20 seizures of shipments costing P12.3 million have been recorded. Most of the shipments were declared to contain “personal effects” or items not for sale, only to be found otherwise.

The rest of the shipments were recorded from January to June this year, although no amount has been specified for them. Most of the items were shipped from the US, Canada, China, Saudi Arabia and Hong Kong.

In yesterday’s Senate hearing, Customs Deputy Commissioner Jessie Dellosa was asked by Sen. Ferdinand Marcos Jr. if the BOC has an estimate of the number of cases of contraband sent through balikbayan boxes.

Dellosa said “there was none,” but Lina later clarified there were indeed such cases.

Sen. Cynthia Villar noted that Filipinos abroad send into the country about $47 million a year, taking into account that half of the amount comes from informal remittances.

‘I am so sorry’

Customs recently drew the ire of more than 10 million overseas Filipino workers (OFWs) when it said it will begin conducting physical examination and opening of balikbayan boxes, some of which are believed to be packed with smuggled goods and drugs.

The policy has since been shelved upon orders of President Aquino, prompting Customs to issue a revised memorandum placing all balikbayan boxes under X-ray examination.

Only when an “alert order” has been issued will there be a physical check of the boxes in the presence of a representative from the Overseas Workers Welfare Administration.

During the Senate hearing, Lina was forced to apologize for the change of policy, which he ordered implemented during his term.

“It bleeds me hearing this. They are not the target of this… I bleed for them. I am so sorry about that,” Lina told the senators.

He said the BOC is not particularly running after the OFWs, but pointed out that under the Tariff and Customs Code of the Philippines (TCCP), anything worth more than P10,000 that enters the country is taxable.

Customs Deputy Commissioner Agaton Uvero said the law has not been revised since the 1930s and that P10,000 is “already too small,” adding the BOC usually exercises “discretion” in screening the items for valuation.

Uvero said Congress can increase the amount of exempted goods to P150,000.

“We need to balance the concern of our OFWs with revenue generation for the government,” Angara said.

Uvero also explained that the BOC would be putting in place measures to reassure the public that packages sent from abroad would be treated with care.

Angara welcomed Lina’s move, but called on the BOC to be more sensitive to the plight of OFWs.

“They will be more happy if the BOC will make good its promise on a complaints desk, green box and clearer policy on the inspection of balikbayan boxes,” Angara added.

Bills revising the TCCP are pending before Congress and are among the priority legislation of the Aquino administration.

In the first semester, the BOC, which accounts for a fifth of state revenues, collected a total of P178.357 billion, up five percent from last year but 11.8 percent off its P202.185-billion target for the period.

The bureau is tasked to collect P436.59 billion this year.

Lina expressed hope that the cooperation between forwarders and the BOC regarding the processing of documents, such as the bill of lading, will help the agency in deterring smuggling.

Lina said he is supportive of proposals to increase the exemption value of goods to P150,000 from the current P10,000.

The BOC also recognized the need to amend the Customs laws, which were created in the late 1950s. –