‘Change’ should begin at BOC–manufacturers
FOR the manufacturing sector, “change”—as promised by President-elect Rodrigo R. Duterte—must begin at the Bureau of Customs (BOC).
The Federation of Philippine Industries ( FPI) said the incoming administration should make good on its promise to rid the ranks of the BOC of corrupt personnel if he expects to see a significant growth and more economic contribution from domestic manufacturers.
Jesus L. Arranza, FPI chairman, said that, given the pledge of the incoming president to level the playing field between foreign and local investors, he expects Duterte to keep customs authorities in line. This is part of the “change is coming” pledge that Duterte’s team has been harping
8.1% The average quarterly growth seen by the manufacturing sector since 2013
since the campaign period.
“After promising a level playing field, we expect stricter rules on monitoring customs. Right now, manufacturing is affected by the influx of 5,000 metric tons of steel rebars. We’re opposing that,” Arranza said, referring to the dilemma of the Philippine Iron and Steel Institute (Pisi) on a recent shipment of rebars.
The Pisi has been butting heads with the Department of Trade and Industry’s Bureau of Product Standards on the issue, alleging that the government agency facilitated the entry of the shipment into the market, sans proper documentation and certification.
The FPI chairman clarified that he is not asking for undue advantage for local manufacturers versus importers, but a tighter watch on the BOC to really level the playing field. “If smuggling, undervaluation or cheating on the standards of a product [food or nonfood] is eliminated, I expect a boost to the local manufacturing,” he added.
Arranza has been saying that the Customs is the economy's first line of defense, so the government must take extra efforts to ensure it is rid of irregularities.
Arranza offered the FPI’s conditional support to the incoming administration, hinged on the crackdown on smuggling.
“We would like to assure that the FPI, as chair of the Fight IT [Fight Illicit Trade] advocacy, we will give full support to the Duterte administration, as what we’ve done before. But we will do it to protect the local industry and local labor by preventing smuggling,” he said.
“We will be around to help; we will not be a fault-finder. But if we find some fault, we will not hesitate to bring that to the attention of the President- elect,” Arranza remarked.
Manufacturing has seen a boom in the last four years, outpacing the growth of services for the first time in a decade.
From 2013 to 2016, the average quarterly growth for manufacturing was at 8.1 percent, while services posted an average of 6.6 percent
Philippine Institute for Development Studies ( PIDS) Senior Research Fellow Adoracion Navarro recently told BUSINESSMIRROR the Duterte administration must implement a comprehensive tax and customs- reform program to increase revenues.
“Implementing a comprehensive tax- and customs-reform program that aims to substantially increase revenues— perhaps, target a revenue of 20 percent of GDP (is needed),” Navarro said.
Ateneo de Manila EagleWatch Senior Fellow Alvin Ang said the next administration must address problems in the BOC, especially since it was identified by the President- elect as among the corrupt agencies in government.
Ang said the main thrust of the reforms must be in the “vigorous and sustained” exercise of political will to ensure that all wrongdoers will be put to jail.
“It’s one of the agencies that he said is corrupt. It’s, therefore, important that Customs delivers on its reforms,” Ang said. “Yes [agency clean up]. Vigorous and sustained. Must put to jail offenders.”
Last year a PIDS study, titled “Furthering the Implementation of AEC Blueprint Measures,” urged the government to pass the Customs Modernization and Tariff Act.
It aims to apply international standards in Customs Operations, as well as making importations faster, predictable, efficient and transparent.
The CMTA was signed into law in May by President Aquino. The law amends the Tariff and Customs Code.