Can govt stop smuggling in PHL?

The smuggling of agricultural goods is a scourge that the Philippines can't seem to eliminate, despite efforts of policymakers to put in place laws aimed at punishing offenders. This illegal activity continues to plague the local agricultural sector and has been cited as one of the major factors behind the decline in the productivity of local farms. This is because smuggled goods are cheaper, as the economic saboteurs who illegally brought the products into the Philippines did not pay duties and taxes.

Citing United Nations Commodity Trade Data, the Presidential Communications Office ( PCO) noted that there was a 20.48- percent discrepancy in the reported values of agricultural products that were imported by the country from 2010 to 2021. The PCO noted that the discrepancy for swine meat ( fresh, chilled or frozen) was higher at 41.89 percent compared to that of edible vegetables, roots and tubers at 34.74 percent ( See “PBBM eyes pre- shipment inspection of agricultural goods,” Businessmirror, May 25, 2023). These discrepancies, the President said, have resulted in revenue losses for the government.

What’s lamentable is that the state has yet to put anyone in jail for smuggling farm products. While it is true that the government is able to apprehend shipments smuggled goods, people who are responsible for the entry of these products have yet to be unmasked and subsequently punished.

The government’s plan to inspect the quality and the sanitary and phytosanitary ( SPS) permits of Philippine- bound agricultural products could strengthen the government’s campaign against smuggling. Aside from ensuring that shipments contain the products that are indicated in the SPS permits, the proposal will also help prevent the spread of diseases that could threaten local crops and the domestic animal population. The Philippines is currently grappling with the African swine fever, which continues to threaten local hog farms. We cannot afford a new outbreak of another animal disease that could put pressure on livestock output.

The pre- inspection of Philippine- bound shipments could increase the prices of imported agricultural products as Swiss firm Société Générale de Surveillance SA (SGS) had recommended that exporters shoulder the cost of inspection. This cost could be passed on to importers, who will be forced to let consumers pay for the additional expense, particularly if it is too large for them to absorb. Unfortunately, the Philippines purchases a lot of food items in huge quantities, some of which are considered staples.

Still, the SGS proposal is worth considering as checking shipments at the port of origin would provide a boost to the efforts of the government to fight technical smuggling. According to a Senate bill filed by former Senator Sergio Osmeña in 2004, technical smuggling refers to the act of importing goods into the Philippines through fraudulent, falsified or erroneous declarations to evade payment of applicable duties and taxes. Inspecting shipments at the port of origin will discourage traders from misdeclaring goods or falsifying documents.

However, outright smuggling— or the act of importing goods into the country without the corresponding documents, permits or licenses— would require a different approach. Pre- inspection would not help plug leakages caused by outright smuggling. We hope policymakers will be able to devise other ways to stop smugglers that are killing the country’s economy.