MANILA, Philippines - The Bureau of Customs stands to lose as much as P40 billion a year due to the continued decline of oil prices as a result of global oversupply.
Customs commissioner John Sevilla said the agency expects collections from oil to decline in peso terms compared to last year with no end to dropping crude prices in sight.
Oil prices fell to its lowest in almost six years as a a result of high output clashing with tepid demand, especially in Europe, which is hobbled by severe cash-flow problems and in Asia, where China’s growth is easing and Japan is struggling to overcome recession.
Sevilla said 22 percent of the agency’s collections in 2014 came from oil imports.
He noted that the low oil prices already made an impact on the agency’s collections last
“Compared to this time last year, we’re below 50 percent in terms of price,” Sevilla said.
Sevilla said the BOC most likely generated P370 billion in revenues last year based on preliminary data. The amount is 20 percent higher than the collections made in 2013 but below the agency’s target of P408.1 billion.
Nevertheless, Sevilla remains confident that the BOC would sustain its double-digit growth this year, mainly due to its aggressive campaign to go after unscrupulous importers/brokers.
The Cabinet-level Development Budget Coordination Committee has set a P456-billion revenue goal for the BOC for 2015, which Sevilla said is unrealistic given the continued slide of crude prices.
Sevilla said while the agency missed its collection goal last year, it made “major headway” in curbing smuggling in the country, noting the record amounts of seized rice and smuggled fuel.
The BOC chief said he remains committed to implementing reforms in the agency to improve the efficiency of processes. For one, he intends to cut the processing of imports to within four days.
The agency also intends to further improve its system for monitoring valuation as well a roll out the National Single Window that will make all transactions with importers electronic.
The use of electronic transactions is part of the BOC’s efforts to improve its image and boost collections.