Lapeña: ‘Massive gap’ in Philippine-China trade data caused by smugglers

THE Bureau of Customs zeroed in on gross misdeclaration of goods imported from China as the reason behind a “massive gap” between declared export volumes and actual shipments entering the Philippines.

In a statement, Customs Commissioner Isidro S. Lapeña said China’s import and export records to the Philippines do not match Manila’s official statistics, suggesting large-scale smuggling of goods through “hidden traders” and consignees for hire.

In a report submitted to Finance Secretary Carlos G. Dominguez III, Mr. Lapeña said the “wide discrepancy” may have been done through undervaluation or misdeclared volumes or weight of cargo. Goods which have been released to hidden traders would also allow importers to evade the scrutiny of the Bureau of Internal Revenue for tax payments.

“In both instances — misdeclaration or undervaluation and the use of consignees for hire — benchmarking and the submission of fake documents allow traders to get away with these underhanded schemes,” the statement read.

China is the country’s biggest source of imports, with total shipments valued at $10.573 billion from January-August, according to the Philippine Statistics Authority. This marks a 4.4% increase from the same period in 2016, and currently accounts for 17.9% of total imports.

Mr. Lapeña said he is set to meet with the head of China’s Customs service this month in order to compare Philippine records with China’s. Mr. Dominguez ordered Mr. Lapeña during a recent Executive Committee meeting to close the gaps in the two countries’ trade estimates, in order to plug any revenue holes that may have emerged from the transactions in question.

Mr. Dominguez has said that 2016 trade records show a P1.8-trillion gap between official imports and totals recorded by countries exporting to the Philippines, suggesting P231 billion in foregone revenue.

This estimate is roughly 2% of gross domestic product, Mr. Dominguez has said, although he noted that the disparity could also be due to “timing” issues and decisions to include or exclude particular commodities in the trade reports.

Mr. Lapeña took over as Customs commissioner on Aug. 30 after heading the Philippine Drug Enforcement Agency.