Domestic manufacturers have renewed their calls to classify smuggling of industrial products as economic sabotage, making this economic crime a non-bailable offense.
This is similar to a current proposal that seeks to qualify smuggling of agricultural products as economic sabotage, according to Jesus Arranza, chairman of the Federation of Philippine Industries (FPI).
Arranza bared this at the First National Anti-Illicit Trade Summit last July 25 at the Manila Hotel.
Jesus Montemayor said smuggling and illicit trade “are not just economic crimes but also social menaces” that need to be curbed immediately to protect legitimate businesses and the economy.
Smuggling, Arranza said, has displaced local manufacturers, workers, and farmers.
For instance, he said, the local automotive tire industry used to have six local manufacturers. Now, there is only one company that is producing tires locally. In the case of textiles, the country used to have 1.5 million spindles that can hire up to 35 people on a 24-hour shift.
Now, the number has dropped to a little over, due mainly to the flooding of cheap, smuggled, substandard, and used clothing or ukay-ukay in the market.
The FPI asked the regulators to update local manufacturers on their current initiatives against illicit trade and lay down how they plan to intensify their campaigns.
In response, undersecretary Charlito Martin Mendoza said the Department of Finance is committed to work closely with the local industries in launching more effective campaigns against smugglers and illicit traders via the Bureau of Customs and Bureau of Internal Revenue.
Fhillip Sawali, director of the Fair trade Enforcement Bureau, informed the domestic industry leaders that the Department of Trade and Industry has created Task Force Kalasag, which is now actively pursuing violators of the Consumer Act and Standards Law, particularly traders of uncertified and substandards products, in partnership with the National Bureau of Investigation and Philippine National Police.
Despite the bad weather and widespread flooding, the Summit was attended by leaders of the industry and government regulators, including DTI-Fair trade Enforcement Bureau Director Atty. Fhillip D. Sawali, Agriculture Assistant Secretary Carlos C. Carag, Bureau of Customs (BOC) Intellectual Property Rights Division (IPRD) Chief Paul Oliver Pacunayen, and National Bureau of Investigation (NBI) Senior Agent John Bacho.
Representatives from the Environment Management Bureau, Food and Drug Administration, Intellectual Property Office have been invited but failed to attend.
The FPI asked the regulators to update local manufacturers on their current initiatives against illicit trade and lay down how they plan to intensify their campaigns in support of President Marcos’s pronouncements during the Summit.
Arranza said a study they commissioned showed that the government is losing around P250 billion in value-added tax (VAT) due to smuggling. Since VAT is 12 percent of the value of imported goods, Arranza said around P2.3 trillion worth of smuggled products are unfairly competing against locally produced products in the domestic market annually.
This, he said, is why Mendoza, in his address, committed to work closely with the local industries in launching more effective campaigns against smugglers and illicit traders via the Bureau of Customs and Bureau of Internal Revenue.
The FPI is also asking the regulators to destroy all confiscated goods, whether they are substandard or conforming with Philippine standards. This will prevent the possibility of these confiscated products still landing in the domestic market and unfairly competing with locally manufactured goods. An exception is if the products confiscated fall under those that are not being produced locally in sufficient quantity.
