Phl, China make progress in resolving trade discrepancy

The discrepancy in trade figures between China and the Philippines has been declining in recent years but remains substantial, the Department of Finance (DOF) said yesterday.

Finance Secretary Carlos Dominguez III said the estimated discrepancy between registered Chinese exports to the Philippines as compared to the registered Philippine imports from China has narrowed to 48 percent in the first seven months of the year, below the 48.6 percent recorded in the same period in 2016, and 60 percent posted back in 2010.

“It is going down but it’s still large,” Dominguez told Bureau of Customs (BOC) officials during a recent executive committee meeting at the DOF.

Citing official trade data, Dominguez said Chinese exports to the Philippines registered at $17.77 billion from January to July 2017.

However, data from the Philippine Statistics Authority (PSA) showed reported imports from China during the same period only totaled $9.24 billion, 48 percent or $8.53 billion below the Chinese figure.

Compared to the same seven-month period in 2016, the trade gap between Manila and Beijing was posted at 48.6 percent, with China’s exports to the country recorded at $17.10 billion, while PSA data on Chinese imports only stood at $8.79 billion.

In 2010, the DOF said registered Chinese exports to the country was at $11.56 billion, while Philippine import figures was only at $4.63 billion, resulting in a trade discrepancy of 60 percent.

In response to the disparity between the trade records of the two governments, Dominguez reiterated his order to Customs commissioner Isidro Lapeña to meet right away with his Chinese counterpart to check and possibly reconcile the figures.

“These numbers, we’re not sure if they’re apples to apples. The definitive figure will come out from Lapeña’s meeting with his counterpart and working it out,” Dominguez said in a separate interview with reporters.

Last month, Lapeña told the finance chief the wide inconsistency between China’s records and the Philippines’ may be due to the gross misdeclaration or undervaluation of goods in terms of volume or weight, and possibly the use of “consignees for hire,” where goods are released to “hidden” traders instead of the consignees on record.

Lapeña said these schemes allow the practice of benchmarking and submission of fake documents. The latter, he said, also gives importers the chance to evade the scrutiny of the Bureau of Internal Revenue (BIR).

According to the Customs chief, efforts to review and reconcile the export volumes recorded by other countries and the shipment data officially recorded by importers in the country are part of the measures initiated by the bureau to reform the agency, run after smugglers and improve revenue collections.