The Association of Vehicle Importers and Distributors Inc. (AVID) said
that consolidated sales of its members grew in October compared to the
previous month. AVID sales grew 16.3 percent in October, capping the
month with 2,589 units sold from the 2,227 units delivered in September.
Year-to-date sales also reflected an increase, with sales during the
first 10 months of the year reaching 25,374 units versus the 24,004
units recorded during the same period last year. AVID President Ma. Fe
Perez-Agudo said that the group hopes to remain resilient while the
country recovers from the effects caused by Super Typhoon Yolanda.
source: Manila Times
17 February 2014
13 February 2014
JFC backs bill amending law on foreign investments
It noted that there are 47 laws governing the practice of specific
professions, and 42 contain reciprocity provisions allowing foreigners
to practice their profession in the Philippines, provided their
countries of origin also allow Filipinos to practice these.
The Philippine Star
The Philippine Star
Failure in job creation
In a Cabinet meeting Tuesday, President Aquino asked his Cabinet to
explain what went wrong that resulted in the number of unemployed,
increasing 6% to 27.5%, totalling 12.1 million jobless Filipinos.
P-Noy asked the Cabinet for an action plan on poverty reduction. It appears that the main program to combat poverty is the conditional cash transfer (CCT) program, which has now ballooned to P62 billion.
Analysts have expressed the view that the CCT has not been effective in alleviating poverty. The ‘cash for work’ programs of the Department of Social Welfare and Development (DSWD) have been too small, and are benefitting only a few thousand of the 12.5 million unemployed.
The infrastructure spending has focused on big ticket projects and not in job intensive projects like farm-to-market roads and small communal irrigation systems.
Communications Secretary Herminio Coloma said the Aquino administration is focusing on job creation in manufacturing and more highly remunerative sectors. He gave no further details.
Economics professors Victor Abola and Benjamin Diokno expressed the view that the 7.2% gross domestic product (GDP) growth did not translate in the hiring of more workers.
Diokno said that even the multibillion-peso school-building program
has been awarded to big-time contractors, instead of the thousands of
small contractors that used to do the job.
Other economists also said that we need to attain a 9% GDP growth to create jobs. The projection of GDP in 2014 by the National Economic and Development Authority (NEDA) is still at 6.5-7.5% GDP growth.
The bottom line — “The Aquino administration has failed to create jobs.”
(The Philippine Star)
P-Noy asked the Cabinet for an action plan on poverty reduction. It appears that the main program to combat poverty is the conditional cash transfer (CCT) program, which has now ballooned to P62 billion.
Analysts have expressed the view that the CCT has not been effective in alleviating poverty. The ‘cash for work’ programs of the Department of Social Welfare and Development (DSWD) have been too small, and are benefitting only a few thousand of the 12.5 million unemployed.
The infrastructure spending has focused on big ticket projects and not in job intensive projects like farm-to-market roads and small communal irrigation systems.
Communications Secretary Herminio Coloma said the Aquino administration is focusing on job creation in manufacturing and more highly remunerative sectors. He gave no further details.
Economics professors Victor Abola and Benjamin Diokno expressed the view that the 7.2% gross domestic product (GDP) growth did not translate in the hiring of more workers.
Other economists also said that we need to attain a 9% GDP growth to create jobs. The projection of GDP in 2014 by the National Economic and Development Authority (NEDA) is still at 6.5-7.5% GDP growth.
The bottom line — “The Aquino administration has failed to create jobs.”
(The Philippine Star)
Crucify the wealthy?
LAST month nonprofit
organization Oxfam International released a report titled “Working for a
Few,” which said the world’s 85 richest people have as much as the
poorest 3.5 billion. According to a summary of the report, “the wealth
of the top 1 percent of the world’s richest people amounts to $110
trillion. That’s 65 times the total wealth of the bottom half of the
world’s population.” The media lapped up the report, quoting Oxfam as
saying that “rigged rules mean economic growth for rich elites all over
world.”
Oxfam, founded by a
group of Quakers in England in 1942, was first known as the Oxford
Committee for Famine Relief. Now it is considered as a “social activist”
organization.
You would think that
Oxfam was talking only about dictators like North Korean leader Kim Jong
Un, global arms dealer Adnan Khashoggi (once one of the world’s
richest), or maybe a crooked (Filipino) customs official no one has ever
heard of. But Oxfam’s list of the world’s 10 wealthiest people features
those who own and run legitimate, tax-paying businesses. Most of them
started their businesses from the ground up and are rich only because of
the value of the businesses they own, not because they have been
stealing from the poor.
Microsoft founder Bill
Gates is on the list because of the company that he created in 1975,
which changed the world for the rest of us; Microsoft directly employs
over 100,000 people. So is Larry Ellison, who founded Oracle Corp.,
which has 125,000 employees. Also on the list are Amancio Ortega and
Rosalía Mera, who founded the Spanish clothing company Zara in 1974.
Zara now has 1,800 stores worldwide.
Some of these
companies have been around for many decades. Another member of the elite
group who apparently took advantage of the “rigged rules” is Lilian
Bettencourt. She is the 91-year-old daughter of the founder of the
personal-care company L’Oreal, which was founded in 1909 and employs
over 90,000.
Frenchman Bernard
Arnault convinced his father to sell their family’s construction company
in 1976 and used the money to buy a number of luxury-goods companies,
including Louis Vuitton (founded in 1854) and Moët & Chandon
champagne (formed in 1743). Arnault’s group employs 90,000.
While it could be true
that “behind every great fortune, there is a great crime,” as French
novelist Honoré de Balzac once said, what Oxfam might better concentrate
on is income disparity. But then again, maybe you cannot make
sensational headlines with these facts:
Did you know that you
might very easily be in the top 1 percent of all 7 billion people on
earth in terms of income? According to World Bank economist Branko
Milanovic, you are in the global top 1 percent if your annual income
(converted to pesos at 45 to $1) is P1.53 million. Even P225,000 makes
you a member of the top 20 percent and P540,000 puts you in the top 10
percent. Incredibly, an annual income of P3.15 million a year puts you
in the top 0.01 percent of all global income earners. We wonder how much
Oxfam Executive Director Winnie Byanyima earns each year.
Wealth is not a single
pizza with limited slices, where if you take too many, someone else
does not eat. Wealth creation is milling flour, growing tomatoes,
building pizza ovens and baking more and more pizzas so that everyone
has plenty to eat. Wealth is not created by stealing from your local
pizza chain.
source: Businessworld
03 February 2014
Aquino claims classroom lack now erased
PRESIDENT Benigno S. C. Aquino III yesterday claimed his administration has filled the classroom shortages in public schools left by his predecessor, former President Gloria Macapagal-Arroyo.
“Today (yesterday), we witnessed the ceremonial turn-over of
66,813 new classrooms which also erased the backlog we inherited from
the past administration,” Mr. Aquino said in a speech at the Carmona
National High School in Cavite.
Mr. Aquino said the Arroyo administration left a backlog of 66,800 classrooms, each costing an estimated at P800,000. His government’s public-private partnership program, the president added, had helped address part of the need.
Two groups -- the Citicore-Megawide and BF Corp.-Riverbanks Development Corp. consortiums -- won the P16.42 billion PPP for School Infrastructure Project Phase 1 (PSIP-I), involving around 9,300 classrooms, in 2012.
An update is expected to be released today.
The second phase, portions of which were awarded last year, involves the construction of an additional 4,370 classrooms.
Communications Secretary Herminio B. Coloma, Jr. said the Department of Education (DepEd) has also added over 62 million textbooks to address backlogs. He claimed the government saved as much as 40% as the materials were purchased a lower price.
The DepEd has also addressed a school chair shortage of 2.5 million and added 103,000 teachers, he said.
“We can see here that DepEd has made meaningful accomplishments and this serves as basis in the social development program of our government,” Mr. Coloma said.
Asked to comment, Kabataan party-list representative James Mark Terry L. Ridon said: “I am certain that the President has been misled” with regard to the classroom backlog having been addressed.
“All it takes is to go around the schools to determine that our kids still have no adequate classrooms over their heads,” the legislator said.
Mr. Aquino said the Arroyo administration left a backlog of 66,800 classrooms, each costing an estimated at P800,000. His government’s public-private partnership program, the president added, had helped address part of the need.
Two groups -- the Citicore-Megawide and BF Corp.-Riverbanks Development Corp. consortiums -- won the P16.42 billion PPP for School Infrastructure Project Phase 1 (PSIP-I), involving around 9,300 classrooms, in 2012.
An update is expected to be released today.
The second phase, portions of which were awarded last year, involves the construction of an additional 4,370 classrooms.
Communications Secretary Herminio B. Coloma, Jr. said the Department of Education (DepEd) has also added over 62 million textbooks to address backlogs. He claimed the government saved as much as 40% as the materials were purchased a lower price.
The DepEd has also addressed a school chair shortage of 2.5 million and added 103,000 teachers, he said.
“We can see here that DepEd has made meaningful accomplishments and this serves as basis in the social development program of our government,” Mr. Coloma said.
Asked to comment, Kabataan party-list representative James Mark Terry L. Ridon said: “I am certain that the President has been misled” with regard to the classroom backlog having been addressed.
“All it takes is to go around the schools to determine that our kids still have no adequate classrooms over their heads,” the legislator said.
source: Businessworld
PDI Editorial: ‘Inclusive business’
Editorial
‘Inclusive business’
“Inclusive growth” has become the buzz phrase in the Aquino administration with the noticeable lack of impact of the stellar economic expansion in the past two years on alleviating poverty. Inclusive growth simply means making the fruits of economic progress trickle down to the poor, or those who have less—or even none—in life.One sure way of making growth inclusive is by generating as many jobs as possible. This can be done by investing in economic activities that have a big multiplier effect—for example, construction, which requires many workers and, at the same time, gives businesses to allied industries producing cement, steel, wood and lumber, electrical equipment and other building materials. The increased demand for their products will, in theory, lead them to expand production and, in the process, hire more workers for their factories.
Why then did the stellar economic growth in the past two years fail to curb poverty? It’s because investments—both by the public and private sectors—in manufacturing, industry and infrastructure did not grow as much. Economists point out that services, and not the labor-intensive industrial and public infrastructure sectors, have been the main growth driver of the economy.
The government has blamed lack of financing for its rather limited investments in public infrastructure projects like airports, roads and bridges. This has prompted the Aquino administration to tap private investments by embarking on its flagship Public-Private Partnership program, which has sadly been hindered by unnecessary delays as well.
That being so, the private sector should then rise to the challenge of helping fight poverty. For starters, it should take some risk in investing in areas where economic and employment conditions are not perfect. It should not expect the government to make investing risk-free for them. Last week, Cabinet Secretary Jose Rene Almendras told the Management Association of the Philippines that the government could do only so much in making the economy work, and that the private sector should join the state by adopting the concept of “inclusive business.”
He
said the private sector could help reduce poverty by investing in the
least developed regions, which include Quezon province and the Mimaropa
(the provinces of Oriental and Occidental Mindoro, Marinduque, Romblon
and Palawan). He pointed out that while the daily salary rate in Quezon
is only P201, the province provides investment opportunities in retail
and services, and that Mimaropa (Region 4-B) has a salary rate of P205 a
day and yet provides business opportunities in the nonagriculture
sector. Even the provinces of Cavite, Laguna, Batangas and Rizal, where
the average salary rate is P208 a day, provide investment opportunities
in small-scale ventures.
Genson suggested that a financing scheme be crafted to meet the needs of small and medium enterprises, pointing out that it is impossible for small borrowers like farmers to meet the bank’s requirement of audited financial statements for the past two or three years. Big local banks should step up to this challenge of financing the needs of the regions that need money the most.
Inclusive business is a global movement spearheaded by the World Business Council for Sustainable Development, a CEO-led organization of companies that is prodding the global business community to create a sustainable future for business, society and the environment. It was founded on the eve of the 1992 Rio Earth Summit by Swiss entrepreneur and philanthropist Stephan Schmidheiny, who believes that business has an inescapable role to play in sustainable development by making significant contributions to the creation of a sustainable society.
The Philippine corporate sector should heed his call.
source: Philippine Daily Inquirer
51 years of smuggling cost $410B
MANILA, Philippines—“Illicit funds,” estimated
at $410.5 billion, flowed into and out of the Philippines between 1960
and 2011, a significant portion of which occurred through smuggling,
said a report published Tuesday by a Washington-based research and
advocacy group.
The illicit flow of funds through trade reduced domestic savings, drove the underground economy and facilitated crime, according to the Global Financial Integrity (GFI) group.
“There’s a crisis in this country, as far as the amount of illicit money flowing into and out of the country through the use of trade,” GFI managing director Tom Cardamone told the Inquirer in an interview on Monday. “And that comes down to the ability or inability of the customs department to get on top of this issue.”
The report put the Bureau of Customs (BOC) in its cross hairs, pointing to massive technical smuggling as the main cause of the illicit flow of funds.
Crime, corruption
Over the 51-year period, the Philippines suffered $132.9 billion in illicit financial outflows from crime, corruption and tax evasion.
Conversely, $277.6 billion was illegally transferred into the country “predominantly through the misinvoicing of trade transactions,” said the report titled “Illicit Financial Flows to and from the Philippines: A Study in Dynamic Situation, 1960-2011.”
Underdeclaration
Misinvoicing is more commonly known locally as “technical smuggling,” or the underdeclaration of imported goods’ value, quantity or quality in order to reduce customs duties.
Since 1990, it is estimated that misinvoicing has cost the Philippine government at least $23 billion in lost tax revenues.
GFI’s report, funded by Ford Foundation, coincides with the current drive of the Aquino administration to reform the BOC, which ranks as one of the most corrupt agencies in various perception surveys.
On the average, one fourth of the value of all goods imported into the country is underreported to customs officials, the study found.
Of all the illicit inflows into the country, 96 percent were due to outright or technical smuggling.
“Ninety-six percent of these illicit inflows are due to the misinvoicing of trade,” Cardamone said.
“By misinvoicing, we’re talking about misreporting the price, quality or quantity of goods. Customs fraud is another way to discuss it. That’s what it is. It’s essentially misrepresenting what’s in these containers.”
Negative impact
In terms of the illicit outflows, 72 percent of the estimated amount was due to the misinvoicing of goods, while 28 percent was due to corruption. “That’s money coming out of government coffers, basically,” Cardamone said.
The GFI managing director rejected the argument that smuggled goods—which are often sold on the market cheaper than legally imported goods or locally produced goods—were beneficial to price-conscious consumers.
“The problem is that illicit flows facilitate illegal activity,” he said. “It’s used to perpetuate the illegal activities of the underground economy. That’s why it’s a negative to the economy.”
Asked why GFI decided to come up with the report on the Philippines at this time, the official of the research and advocacy group said the country perennially stood out as one jurisdiction with a significant problem in the illicit trade of goods.
“Over the last several years, we’ve done studies on Mexico, Russia and India. For geographic diversity, we picked a nation in the Pacific of Southeast Asia,” Cardamone said.
“In our annual study, the Philippines kept coming up year after year after year in the top 10 or top 12 or top 14. So we said, that’s a good one [to study].”
On behalf of disenfranchised
GFI, he said, was acting on behalf of the country’s underprivileged.
“We feel that the people whose interests are being furthered are the poor people of the Philippines, who are basically disenfranchised because of their economic status and lack of political power, and their inability to ‘game the system’ as so many others do,” Cardamone said.
As for the Aquino administration’s drive to address smuggling, the GFI official said there was “no way to tell” whether recent reform efforts had met with success because the latest data on smuggling the group used were from 2011.
It would take at least two more years to assess the administration’s efforts to combat smuggling, Cardamone said.
Political will
“What has this government done to address the problem? Rhetorically, it seems that they’re doing quite a bit,” he said, but added that it was
“unclear if there is a political will” within the customs bureau to implement the planned reforms.
“But with the President’s statement during the State of the [Nation] Address last July, specifically about the customs department, political will seems to be changing for the better to really address this problem in a significant way,” he said.
South Korea experience
The GFI official said the country should draw inspiration from South Korea, which started, more or less, at par with the country in the 1960s in terms of corruption and smuggling levels.
Since then, however, South Korea has shown a downward trajectory in terms of corruption, which corresponded with a decline in smuggling activities. The Philippines, on the other hand, exhibited the opposite.
Too early to tell
“Political will is great. Research is great. Informing institutions is great. But it has to be sustained over the long haul, or it looks just like window-dressing,” Cardamone said.
“From where I sit, it’s still too early to tell whether the government has what it takes to reform the bureaucracy to be able to sustain these reforms over the longer period, 5, 10, 20, 30 years, which is what it’s going to take to make the Philippines look like South Korea,” he added.
source: Philippine Daily Inquirer
The illicit flow of funds through trade reduced domestic savings, drove the underground economy and facilitated crime, according to the Global Financial Integrity (GFI) group.
“There’s a crisis in this country, as far as the amount of illicit money flowing into and out of the country through the use of trade,” GFI managing director Tom Cardamone told the Inquirer in an interview on Monday. “And that comes down to the ability or inability of the customs department to get on top of this issue.”
The report put the Bureau of Customs (BOC) in its cross hairs, pointing to massive technical smuggling as the main cause of the illicit flow of funds.
Crime, corruption
Over the 51-year period, the Philippines suffered $132.9 billion in illicit financial outflows from crime, corruption and tax evasion.
Conversely, $277.6 billion was illegally transferred into the country “predominantly through the misinvoicing of trade transactions,” said the report titled “Illicit Financial Flows to and from the Philippines: A Study in Dynamic Situation, 1960-2011.”
Underdeclaration
Misinvoicing is more commonly known locally as “technical smuggling,” or the underdeclaration of imported goods’ value, quantity or quality in order to reduce customs duties.
Since 1990, it is estimated that misinvoicing has cost the Philippine government at least $23 billion in lost tax revenues.
GFI’s report, funded by Ford Foundation, coincides with the current drive of the Aquino administration to reform the BOC, which ranks as one of the most corrupt agencies in various perception surveys.
On the average, one fourth of the value of all goods imported into the country is underreported to customs officials, the study found.
Of all the illicit inflows into the country, 96 percent were due to outright or technical smuggling.
“Ninety-six percent of these illicit inflows are due to the misinvoicing of trade,” Cardamone said.
“By misinvoicing, we’re talking about misreporting the price, quality or quantity of goods. Customs fraud is another way to discuss it. That’s what it is. It’s essentially misrepresenting what’s in these containers.”
Negative impact
In terms of the illicit outflows, 72 percent of the estimated amount was due to the misinvoicing of goods, while 28 percent was due to corruption. “That’s money coming out of government coffers, basically,” Cardamone said.
The GFI managing director rejected the argument that smuggled goods—which are often sold on the market cheaper than legally imported goods or locally produced goods—were beneficial to price-conscious consumers.
“The problem is that illicit flows facilitate illegal activity,” he said. “It’s used to perpetuate the illegal activities of the underground economy. That’s why it’s a negative to the economy.”
“For
the sake of argument, let’s say that [smuggling] keeps prices down. But
what you don’t see there—what the consumer doesn’t see—is the tax loss
to the government and the [resulting] lack of government services that
they might also benefit from,” Cardamone said.
Perennial standout
Asked why GFI decided to come up with the report on the Philippines at this time, the official of the research and advocacy group said the country perennially stood out as one jurisdiction with a significant problem in the illicit trade of goods.
“Over the last several years, we’ve done studies on Mexico, Russia and India. For geographic diversity, we picked a nation in the Pacific of Southeast Asia,” Cardamone said.
“In our annual study, the Philippines kept coming up year after year after year in the top 10 or top 12 or top 14. So we said, that’s a good one [to study].”
On behalf of disenfranchised
GFI, he said, was acting on behalf of the country’s underprivileged.
“We feel that the people whose interests are being furthered are the poor people of the Philippines, who are basically disenfranchised because of their economic status and lack of political power, and their inability to ‘game the system’ as so many others do,” Cardamone said.
As for the Aquino administration’s drive to address smuggling, the GFI official said there was “no way to tell” whether recent reform efforts had met with success because the latest data on smuggling the group used were from 2011.
It would take at least two more years to assess the administration’s efforts to combat smuggling, Cardamone said.
Political will
“What has this government done to address the problem? Rhetorically, it seems that they’re doing quite a bit,” he said, but added that it was
“unclear if there is a political will” within the customs bureau to implement the planned reforms.
“But with the President’s statement during the State of the [Nation] Address last July, specifically about the customs department, political will seems to be changing for the better to really address this problem in a significant way,” he said.
South Korea experience
The GFI official said the country should draw inspiration from South Korea, which started, more or less, at par with the country in the 1960s in terms of corruption and smuggling levels.
Since then, however, South Korea has shown a downward trajectory in terms of corruption, which corresponded with a decline in smuggling activities. The Philippines, on the other hand, exhibited the opposite.
Too early to tell
“Political will is great. Research is great. Informing institutions is great. But it has to be sustained over the long haul, or it looks just like window-dressing,” Cardamone said.
“From where I sit, it’s still too early to tell whether the government has what it takes to reform the bureaucracy to be able to sustain these reforms over the longer period, 5, 10, 20, 30 years, which is what it’s going to take to make the Philippines look like South Korea,” he added.
source: Philippine Daily Inquirer
Commentary
Bureau of Customs’ crucial role in inclusive growth
By Ernesto M. Ordoñez, 24 December 2013
Will farmers and fisherfolk have a merry Christmas? Only if BOC exercises its role in inclusive growth.
President Aquino wants our impressive growth to be more inclusive. The trickle down approach benefiting the poor in the long run is not good enough.
The rural sector, composed mostly of farmers and fisherfolk, is both the largest and the poorest. Their situation has not kept pace with our economic growth. For those victimized by smuggling, their situation has become even worse.
This is actually the opposite of inclusive growth. An example of smuggling’s curse is that 20 percent of our small backyard hog raisers lost their livelihoods over a two-year period according to the Department of Agriculture’s Bureau of Agricultural Statistics.
Landmark case
Today, there is a landmark case on rice smuggling that deserves immediate attention. This is the Dec. 13, 2013 order of Judge Emmanuel Carpio of the Regional Trial Court in Davao City.
A large shipment of rice without the necessary import permit from the National Food Authority (NFA) was recently seized in Davao by the Bureau of Customs (BOC). The plaintiff argued that no smuggling occurred because NFA import permits were no longer required to import rice.
In the court order, Judge Carpio stated: “The plaintiff has the right to cause the release of the rice shipments and take possession and custody thereof…It is clear that WTO special treatment for rice was the only source of the Philippines’ right imposed on quantitative restrictions by way of import permits/import quotas in importation of rice.” However, this treatment “expired on June 30, 2012.”
The critical question is whether this treatment has indeed expired or not. In the court order, the following was recorded:
Court: But you acknowledge… that the right of the NFA to issue permit already expired based on the records?
NFA lawyer: Well, based on the records shown by the plaintiff in his complaint, your honor. We have also read it in the paper, your honor, that it has expired but there was no… (interrupted).
Court: No extension of their right to…
Analysis
Assuming the NFA lawyer was not quoted out of context, it is extremely disappointing that what he knows is only from “the papers.” In addition, he said he had no legal opinion at the time of the hearing.
From another perspective, the plaintiff’s lawyer is mistaken when he says that the only interest of BOC is revenue collection. The four other elements of the BOC mission, as stated in the BOC website (www.customs.gov.ph), are: “To provide quality service to stakeholders with professionalism and integrity; to facilitate trade in a secured manner; to effectively curb smuggling; and to be compliant to international best practices and standards”.
To collect revenue in violation of the law is to violate the four other BOC mission elements. The court order releasing the allegedly smuggled rice appears logical. But the premise of no more required import permits is contradicted by interviews I conducted with senior DA and NFA officials.
As a current member of the International Trade Committee of the public-private sector National Agriculture and Fisheries Council (NAFC) and as a former vice president for Asia of the United Nations Council for Trade and Development (UNCTAD), I can confidently say that the DA and NFA position that there are still quantitative restrictions is valid. It is unfortunate that the NFA lawyer did not argue this case with the necessary facts.
If no strong case for reconsideration is given and the rice shipment is released, it will signal the similar releases of all the other apprehended rice shipments that arrived after June 30, 2012. This is ironic, since it is only lately that we have seen successes in confiscating smuggled rice.
Next move
We commend the many successes of the newly-reformed BOC under the supervision of Finance Secretary Cesar Purisima. But the mistaken release of this landmark rice shipment may reverse the increasing confidence farmers and fisherfolk have in the government’s efforts to protect their livelihoods from smuggling. If the alleged Napoles scam is a setback to inclusive growth of P10 billion in 10 years, the smuggling scam quantified by PNoy in his Sona address of P200 billion in one year is 200 times worse.
The BOC must move swiftly with help from the DA and NFA with a strong case for reconsideration to prevent this rice shipment release. This is necessary if the BOC is to fulfill the four other elements in its stated mission. Only then can the BOC exercise properly its important role in inclusive growth, especially as it relates to the small farmers and fisherfolk who are the perennial victims of smuggling.
(The author is chair of Agriwatch, former Secretary for Presidential Flagship Programs and Projects, and former Undersecretary for Agriculture, Trade and Industry. For inquiries and suggestions, e-mail agriwatch_phil@yahoo.com or telefax (02) 8522112).
source: Philippine Daily Inquirer
President Aquino wants our impressive growth to be more inclusive. The trickle down approach benefiting the poor in the long run is not good enough.
The rural sector, composed mostly of farmers and fisherfolk, is both the largest and the poorest. Their situation has not kept pace with our economic growth. For those victimized by smuggling, their situation has become even worse.
This is actually the opposite of inclusive growth. An example of smuggling’s curse is that 20 percent of our small backyard hog raisers lost their livelihoods over a two-year period according to the Department of Agriculture’s Bureau of Agricultural Statistics.
Landmark case
Today, there is a landmark case on rice smuggling that deserves immediate attention. This is the Dec. 13, 2013 order of Judge Emmanuel Carpio of the Regional Trial Court in Davao City.
A large shipment of rice without the necessary import permit from the National Food Authority (NFA) was recently seized in Davao by the Bureau of Customs (BOC). The plaintiff argued that no smuggling occurred because NFA import permits were no longer required to import rice.
In the court order, Judge Carpio stated: “The plaintiff has the right to cause the release of the rice shipments and take possession and custody thereof…It is clear that WTO special treatment for rice was the only source of the Philippines’ right imposed on quantitative restrictions by way of import permits/import quotas in importation of rice.” However, this treatment “expired on June 30, 2012.”
The critical question is whether this treatment has indeed expired or not. In the court order, the following was recorded:
Court: But you acknowledge… that the right of the NFA to issue permit already expired based on the records?
NFA lawyer: Well, based on the records shown by the plaintiff in his complaint, your honor. We have also read it in the paper, your honor, that it has expired but there was no… (interrupted).
Court: No extension of their right to…
NFA
lawyer: That is what is stated in the papers, your honor. But there is
no exact legal opinion on that, your honor. We are waiting actually for a
legal opinion from our Manila office, your honor.
Plaintiff’s lawyer: Anyway, the government
will not be prejudiced, your honor, because the interest of the BOC is
only the payment of taxes, your honor, duties and tariff.
Analysis
Assuming the NFA lawyer was not quoted out of context, it is extremely disappointing that what he knows is only from “the papers.” In addition, he said he had no legal opinion at the time of the hearing.
From another perspective, the plaintiff’s lawyer is mistaken when he says that the only interest of BOC is revenue collection. The four other elements of the BOC mission, as stated in the BOC website (www.customs.gov.ph), are: “To provide quality service to stakeholders with professionalism and integrity; to facilitate trade in a secured manner; to effectively curb smuggling; and to be compliant to international best practices and standards”.
To collect revenue in violation of the law is to violate the four other BOC mission elements. The court order releasing the allegedly smuggled rice appears logical. But the premise of no more required import permits is contradicted by interviews I conducted with senior DA and NFA officials.
As a current member of the International Trade Committee of the public-private sector National Agriculture and Fisheries Council (NAFC) and as a former vice president for Asia of the United Nations Council for Trade and Development (UNCTAD), I can confidently say that the DA and NFA position that there are still quantitative restrictions is valid. It is unfortunate that the NFA lawyer did not argue this case with the necessary facts.
If no strong case for reconsideration is given and the rice shipment is released, it will signal the similar releases of all the other apprehended rice shipments that arrived after June 30, 2012. This is ironic, since it is only lately that we have seen successes in confiscating smuggled rice.
Next move
We commend the many successes of the newly-reformed BOC under the supervision of Finance Secretary Cesar Purisima. But the mistaken release of this landmark rice shipment may reverse the increasing confidence farmers and fisherfolk have in the government’s efforts to protect their livelihoods from smuggling. If the alleged Napoles scam is a setback to inclusive growth of P10 billion in 10 years, the smuggling scam quantified by PNoy in his Sona address of P200 billion in one year is 200 times worse.
The BOC must move swiftly with help from the DA and NFA with a strong case for reconsideration to prevent this rice shipment release. This is necessary if the BOC is to fulfill the four other elements in its stated mission. Only then can the BOC exercise properly its important role in inclusive growth, especially as it relates to the small farmers and fisherfolk who are the perennial victims of smuggling.
(The author is chair of Agriwatch, former Secretary for Presidential Flagship Programs and Projects, and former Undersecretary for Agriculture, Trade and Industry. For inquiries and suggestions, e-mail agriwatch_phil@yahoo.com or telefax (02) 8522112).
source: Philippine Daily Inquirer
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