We are the tragic victims of smuggling (1)

PRESIDENT Rodrigo Duterte recently named five active or retired police officers as protectors of the country’s illegal drug trade. Following this revelation, Philippine National Police (PNP) chief Director General Ronald “Bato” dela Rosa revealed that much of the country’s drug supply is smuggled through seaports and airports in Central Luzon.

But the smuggling of illegal drugs is only a small part of a much larger problem. Illegally imported consumer goods threaten to destroy whole industries that drive employment and economic growth.

The Department of Finance (DOF) estimates that nearly 1200 billion in tax revenues are lost each year to smuggling. This number might seem mere statistics until you realize that 1200 billion could have paid for about 10,000 schools or a million houses for the poor. It also could have wiped out the budget deficit, reported at 1121.7 billion in 2015.

Between the 1990s and the mid2000s, our textile, ceramic, petrochemical, and shoe industries were devastated by the dumping of goods smuggled from countries like China. Now we are seeing this happening in agriculture, and the dumping of cheap farm produce can, in large part, be blamed for the 4.4 percent contraction of the sector this year after it stagnated in 2015.

The next victim could very well be the construction and manufacturing sectors.

Long considered important components of national development, the manufacturing of steel and cement not only supports our bid to close our wide infrastructure gap. These provide jobs to tens of thousands of Filipinos as well.

Reports have surfaced that threefourths of the cement imported in the first quarter of 2016 was either undervalued or mis-declared. This is a form of technical smuggling that may not be as glamorous as outright smuggling but just as dangerous. And the problem is growing to unmanageable proportions.

Meanwhile in April this year, 5,000 metric tons of reinforcing steel bars brought in from China were found to be defective and lacking proper documentation. These materials are then sold for very low prices in the local market, placing immense pressure on local steel bar manufacturers. Deprived of honest revenues, these businesses are forced to scale back.

(To be continued)