Philippines underperforms vs illicit trade – survey

Worst in customs corruption

MANILA, Philippines - The Philippines lacks the capability to verify eligible traders, making corruption in its borders rampant and helping proliferate illicit trade that take away revenues, a new survey found.

According to the latest Illicit Trade Environment Index, the country scored 50.4 out of 100, below the average of 57 for 17 countries surveyed by The Economist Intelligence Unit.

It ranked 12th in the list, which uses four gauges namely intellectual property, transparency in trade, customs environment and supply and demand.

Under customs environment, the country scored zero-– which means “worst” – in terms of customs corruption and having a trusted trader and client accreditation program.

On the flip side, customs clearance and inspection got a high 83.3, while automation efforts were graded 48.4.

“Besides posing a threat to public health, the environment, innovation and tax revenues, the trade provides funds for transnational crime networks and terrorist organisations,” the report released last Oct. 12 stated.

“A shipment of fake goods doesn’t just take away money from a company or government – it feeds a cycle of criminality that threatens the health and security of nations across the world,” it added.

Customs commissioner Nicanor Faeldon did not reply to request for comment. Finance Secretary Carlos Dominguez however earlier commended the Bureau of Customs for its successive drug bust operations at airports.

Aside from the Philippines, Vietnam, Indonesia, Cambodia, Laos and Myanmar all scored zero in customs corruption. The five countries also lagged behind the Philippines in over-all ranking.

Australia topped the list with a score of 85.2.

According to the EIU report, countries like the Philippines will have to rely from outside help to fix its customs problems.

It said enough investments in automation are needed to facilitate good customs environment at a time Southeast Asia is integrating.

“The economies at the bottom of the category—Philippines, Cambodia, Myanmar and Laos—are poorer and thus face the kind of budgetary constraints that the

economies at the top do not,” the report said.

“Without outside assistance, it could be years, if not decades, before any of these economies can begin to build a sufficient customs apparatus,” it explained.

Among the four sub-indices, the Philippines got its highest score of 77.5 in transparency in trade, which combines governance of free trade zones (50), tracking and tracing of cargoes (60), adoption of Kyoto Convention (100) and government cooperation (100).

This was followed by a 52.8 in supply and demand, summing up quality of state institutions (33.3), labor market regulations (75) and tax burden (50).

The country scored 40 out of 100 in intellectual property protection, the report said.

Over the past two weeks, finance chief Dominguez had lauded Customs for foiling three successive attempts by foreign nationals to smuggle cocaine in the country amid the Duterte administration’s anti-drug war.

The first one was through two Chinese and a Russian last Oct. 5, the second involved a Brazilian national last Oct. 15, and the third and last was from a Venezuelan last Oct. 16.

“We commend the Bureau of Customs under the able leadership of Commissioner Faeldon for remaining highly vigilant against attempts by narco traffickers to smuggle in illegal drugs into the country,” Dominguez was quoted as saying in a statement.