Illicit trade, a bane to Philippine economic growth
Let me start my column this week by thanking Japan tobacco International for sponsoring the recent Global Anti-illicit trade Summit at Bonifacio Global City’s (BGC) Shangrila Hotel. However, I was surprised when the Summit host stopped me, as one of the resource speakers, from reading the findings of a research study about the impact of the over P900 billion worth of eight illicitly traded goods on the Philippine economy and local businesses.
Granting that time constraint, as the host mentioned, was his reason for preventing me from sharing the research to the summit participants, I think it would have been fair to the summit participants and to myself, if the host got back at me for the important data after he gave the other resource speakers all the time to share their thoughts on illicit trade and to answer his questions during our session. After all, I followed the discussion sequence indicated in the copy of the program provided to us by the summit organizer.
For whatever reasons the summit host may have had in preventing me from sharing the recent study about the impact of illicit trade on the country’s economy, I find the over P900 billion worth of illicitly traded commodities an alarming figure, knowing that illicitly traded products displace the legitimate goods in the market. Illicit trade, after all, creates an unfair environment for legitimate businesses.
Imagine the huge amount of revenues
Imagine the huge amount of revenues the government is losing from the over P900 billion worth of illicitly traded commodities in the country’s petroleum, steel, resin, wood, cigarette, sugar, palm oil and automotive battery industries. Worse, there are millions of Filipino workers losing their jobs because of these illegal business activities.
the government is losing from the over P900 billion worth of illicitly traded commodities in the country’s petroleum, steel, resin, wood, cigarette, sugar, palm oil and automotive battery industries. Worse, there are millions of Filipino workers losing their jobs because of these illegal business activities.
With illicit trade not only being done through smuggling but also including cartels, hoarding, price manipulation, or any business activity that is anti-competitive and violates the Philippine Competition Law (R A 10667), it’s really time for the Filipino nation to be aware of the extent of illicit trade happening in our country today and its adverse impact on the economy and our daily lives.
The government is losing billions of pesos in much needed revenues in duties and taxes from illicit trade. And because many smuggled goods brought into the country by smugglers are sub-standard, this form of illicit trade also threatens the lives of consumers who are not aware of the risks they put themselves into when they buy and use sub-standard products. Thus, while explaining the ails of illicit trade to a Filipino who may have lost his job because of this illegal activity would be the hard part, the government should take the cue and seriously try to solve the problem of smuggling and all forms of illicit trade.
I am hopeful, though, that with the President’s sensitivity to illicit trade issues and his determination to stop smuggling, these concerns would be appropriately addressed in due time.
Dr. Jesus Lim Arranza is the chairman of the Federation of Philippine Industries and Fight Illicit Trade; a broad-based, multisectoral movement intended to protect consumers, safeguard government revenues and shield legitimate industries from the ill effects of smuggling.