The stolen economy: Of shenanigans and smugglers
EYES WIDE OPEN - Iris Gonzales (The Philippine Star) - October 29, 2020 - 12:00am

If one were to trace the labyrinthine trail of smuggling in this country, one will often find a powerful person somewhere along the way a coddler who may be from the echelons of power, perhaps oligarchs or politicos in their sleek Brionis and signature ties.

This is what I learned when I was covering the Bureau of Customs some years back. Every commissioner knows that when his people come across shipments of smuggled goods, he is sure to get a phone call from some high official or personality asking him to look the other way.

Lawmakers are among the most common coddlers. Ironic isn’t it? The people making laws are the first ones to break them or are godfathers to those who do.

Almost anything and everything can be smuggled in and out of the country – from cigarettes, oil and pangolins, and even our own people.

Smuggling is a crime and it is utterly odious. Smugglers get away with not paying taxes, while we ordinary Filipinos have to endure automatic tax cuts in our paychecks. Smuggling deprives the government of much-needed revenue, especially now when the country needs every peso to recover from the COVID-19 crisis.

They would rather pay off the whole chain, a complex network of shenanigans and syndicates in the smuggling trail, which may include Customs officials, local police, their politico-coddlers and other authorities.

Smuggling of the top three imports are particularly rampant – luxury vehicles, oil and cigarettes.

The yearly losses from smuggling could be anywhere from P50 billion to P80 billion, according to the government, although there’s no way to accurately estimate the figure.

“The cumulative amount of lost revenues from smuggling could have enabled the government to ramp up spending on infrastructure and social services much sooner than we had planned. Our economic development might have taken a much preferable course. Our people might be more prosperous than they are now,” Finance Secretary Carlos Dominguez said in a 2018 speech.

Luxury vehicles

Customs estimates that the revenue loss from smuggled vehicles alone is about P20 billion. The modus operandi includes misdeclaration, misclassification, or undervaluation.

Oil smuggling

About one in every three liters of gasoline or diesel fuel sold in the country is smuggled, tycoon Ramon Ang, president and CEO of Petron Corp., once said.

Partly because of rampant oil smuggling, some oil refiners have opted to close their refineries; Caltex was first, followed by Pilipinas Shell and now Ang said Petron might do that, too.

The Department of Finance estimates that P27 billion is lost to oil smuggling every year. Imagine how many public hospitals that amount of money can build.

Cigarette smuggling

Like oil smuggling, cigarette smuggling remains a headache for authorities, too, more so now because the COVID-19 lockdowns have made it difficult for the legitimate trade to flourish.

Some cigarette smugglers are so big that law enforcers found interlocking ties – common shareholders – among companies that were subject of recent raids. This shows that they are operating as full-time shenanigans, a syndicate of sorts.

This was what authorities discovered in their raids on GB-BEM Cigarette Company and GB Global Exprez, Inc., both operating in Pampanga.

Cigarette smuggling is estimated to cost the government around P16 billion to P20 billion in yearly revenues.

Consumers

Consumers should join the fight against smuggling. We should not patronize these goods because, in the end, the foregone revenue would mean less social services for us.

They’re also not safe. Imagine using smuggled oil for your car. Note that additives in fuel, which branded gasoline has, provide value to consumers.

Quit smoking

As for cigarettes, the best alternative really is to quit smoking, but even cigarette companies know that’s not easy, especially in the Philippines.

There are still 16 million Filipino smokers, says PMFTC president Denis Gorkun at the recent DigiCon Omni 2020 virtual conference.

Philip Morris International (PMI), Gorkun shared, wants to deliver a smoke-free future with better alternatives to replace cigarettes. PMFTC is the local affiliate of PMI.

“We are doing so much more than just evolving from an agriculture and consumer goods company to a technology company. We are a company that needs to transform in order to be successful in the new smoke-free reality,” Gorkun says.

But still, he adds, PMI’s smoke-free alternatives are not risk-free and the best thing for smokers really is still to quit and for non-smokers to never start at all.

Coddlers

At the end of the day, whether it’s cigarettes, oil or luxury vehicles, or other goods, authorities always find a common and bigger problem as to why smuggling remains rampant in our country.

It’s simply because smugglers have big-time and powerful coddlers. And as long as they exist, the cat-and-mouse game between smugglers and authorities will remain an endless roundabout.

(On behalf of The STAR’s Property Report PH, I would like to invite you to a webinar today at 11 a.m. This is organized by The STAR and Rockwell and it will feature renowned finance experts Francis Kong and Rose Fres-Fausto who will talk about investing in property. Register here: www.virnew.com/property-report-moving-forward/. )

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