By Brian James Lu

Senate’s push for an anti-smuggling court

Due to the failure of courts, our senators are now pushing for the creation of special courts to exclusively try smuggling cases that are worth billions of pesos. For business owners whose operations have consistently suffered from goods smuggling, this is a welcome development.

For so long, smugglers have wreaked havoc on our economy. Aside from the loss of revenue for the government due to uncollected tariffs and duties, smuggling also destroys the livelihood of farmers since smuggled agricultural products are much cheaper than those locally produced. Import liberalization has already caused the near collapse of several Philippine industries, and smuggling may be the death knell of those that still exist.

The proposal to create special courts stems from the fact that while authorities were able to apprehend smuggled goods worth hundreds of millions of pesos over the years, not one was convicted of the crime. In March this year, authorities were able to seize PHP120 million worth of smuggled goods in several warehouses and cold storage facilities in Navotas. The operatives discovered poultry products such as chicken drumsticks and chicken feet.

It is lamentable, however, that while the Senate has conducted various investigations into the rampant smuggling in the country, smuggling continues unabated. Former Senate President Tito Sotto was also able to come out with a list of suspected smugglers, but it did not make a dent in smuggling activities.

A Senate bill filed by former Senator Sergio Osmeña in 2004 defined two acts of smuggling: direct or outright smuggling and technical smuggling. Direct or outright smuggling refers to the act of bringing into the Philippines goods or products without the corresponding documents, permits, and licenses required by laws, rules, and regulations. On the other hand, technical smuggling refers to the act of importing or bringing into the Philippines goods or products through fraudulent, falsified, or erroneous declarations to evade payment of applicable duties and taxes.

In his Inquirer column on September 2017, former Secretary of Presidential Flagship Programs and Projects Ernesto Ordoñez stated that it is technical smuggling that harms agriculture, and not outright smuggling. Technical smuggling is committed when goods and articles are classified incorrectly, often undervalued, as to their nature, quality, or value.

In her article Smuggling 101, published on Business Mirror, Atty. Filamer Miguel said that technical smuggling is done through the connivance of importers, brokers and even officials and personnel of the Bureau of Customs.

The enactment of Republic Act 10845, or the Anti-Agricultural Smuggling Act of 2016, did not deter smuggling. Smugglers, ironically, have become more daring in their activities, which is why smuggling continues to proliferate nationwide.

Aside from the anti-smuggling courts, the Senate is pushing for the inclusion of hoarding, price manipulation, and cartels as economic sabotage that is non-bailable. This is a welcome development since the recent onion crisis is a result of hoarding, price manipulation, and cartels. It is unconscionable to think that the production cost of onion is PHP25 per kilogram, yet it is sold at PHP600–P700 per kilogram. A special court to prosecute smuggling and hoarding, price manipulation, and cartels may hopefully put an end to, if not dampen, such activities.

Smuggling imperils the country’s food security. When all countries in the world are addressing food security as a principal concern due to climate change, the Philippines is contending against import liberalization and rampant smuggling of agricultural products. The Philippines is currently an exporter of almost all agricultural products, such as rice, coffee, and almost all kinds of vegetables. Since their governments subsidize agricultural production, imported agricultural products are in direct competition with locally produced goods and are much cheaper.

Many rice farmers have converted to planting onions and other alternative vegetables since the price of palay dropped to its lowest level when the Rice Tariffication Law was enacted. Last year, the Philippines imported 3.7 million metric tons (MMT) of rice, making our country the world’s second largest rice importer. This is unbelievable since the Philippines is an agricultural country and rice is the main staple for Filipinos.

The best that the government can do is develop the country’s rice production. Since the Arroyo administration, efforts have been made to arrest the decline in rice production by launching the rice self-sufficiency program. The program may have hit a snag since the country continues to import rice at a staggering rate. We should rise from our dependency on imported agricultural products and ensure our food security by developing the capacity of farmers to produce food for the population.

It is also alarming that the average age of Filipino farmers is 55 to 59 years old. This shows that the farmers no longer want their children to till their farms since it is not profitable. Many farmers engage in odd jobs to earn an income. They send their children to the cities or abroad to earn more money. Farmers are generally poor. The Philippine Statistics Authority places the poverty incidence of farmers at 31.6 percent. Fisherfolk, who are considered part of the agriculture sector, make up 26.2 percent of the poor.

A sound agricultural program that alleviates the plight of the farmers would drastically reduce the poverty being felt in rural areas. This will also have a good impact on food security if farmers are assisted in production and marketing. We do not want to repeatedly see tons of tomatoes and other food crops being thrown away just because they are not being bought while they are much needed in other provinces.

Editor’s note: The opinions expressed in the foregoing article are solely the author’s and do not reflect the opinions and beliefs of the Philippine News Agency (PNA) or any other office under the Presidential Communications Office.


About the Columnist

Image of Brian James Lu

BRIAN JAMES J. LU, MMgt, is an entrepreneur, business adviser, government consultant, and is deeply involve in civil society organizations. He advocates good governance, ethical business practices, and social responsibilities. He is the President of the National Economic Protectionism Association (NEPA) and Chairman of the Foundation for National Development (Fonad). His broad experiences in the private and public sectors give him a unique perspective to advance his advocacies.