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Customs reforms in doldrums: Philippines business groups concerned over backtracking

MANILA: With progress stalled, local business groups have expressed concern about possible signs of backtracking by the government that would undermine the country’s customs reform process and ultimately result in lower revenue collections and proliferation of smuggling.

According to several business groups, the proposal would  have eliminate delays being witnessed at the country’s main ports because cargoes would have been inspected and sealed by the approved inspectors before they are shipped into the country.

The proposed reform program on pre-shipment inspection of all containerized cargoes has been put on hold by the Bureau of Customs (BOC) due to port congestion.

BOC commissioner Sonny Sevilla earlier released a draft Customs Administrative Order (CA) announcing the return of pre-shipment inspection of all imports beginning June 1 this year.  The program, however, was postponed by two months as the details were still being firmed up.

Former Customs commissioner Ruffy Biazon has been pushing for the immediate inspection of all containerized cargo shipments, which comprise 35 percent of dutiable goods entering the country to curb smuggling which has cost the government P200 billion in foregone revenue.

There was a pending administrative order signed by the Customs commissioner Biazon and endorsed to Finance Secretary Cesar Purisima for approval last July 26, 2013.

Based on data from the International Monetary Fund (IMF), the value of goods shipped to the Philippines from 2002 to 2007 reached $284.7 billion.  The BOC, however, reported only $195.01 billion worth of imports over the same period, suggesting an annual average of $14.95 billion worth of goods sold in the Philippines that were not taxed.

“Are the pronouncements regarding Customs reforms and stamping over the smuggling problem nothing but lip service? Shortly after the assumption of Customs commissioner to his current position, he stated in a TV interview that “the new commissioner and the BOC will not be judged by its pronouncements but by its execution of real reform programs”.  Where is the execution of reform programs,” a local business group said.