SIMPLY changing the heads of the Bureau of Customs (BOC) will not solve the long-standing operational problems in the government’s second-largest revenue earner, which now strike at the “gut” of the economy, the chief of the Senate Economic Affairs Committee has warned.
Sen. Sherwin Gatchalian acknowledged that the deepening crisis from ports congestion, for example, which is already worsening supply-chain problems and affecting manufacturing and other key economic sectors, may be traced also to serious operational inefficiencies at Customs.
For that reason, Gatchalian said his committee will call for hearings within the fortnight on his resolution to inquire into BOC operations, and determine the solutions to stop smuggling without necessarily paralyzing the flow of commerce.
“I talked to several manufacturers. One reason why our exports performed weakly is our supply-chain failure,” Gatchalian said, stressing that Customs is a key part of that supply chain.
He conceded that smuggling is a serious problem, citing estimates that total annual loss to smuggling is P300 billion at least, but added that his committee’s inquiry will not focus on corruption but on operational problems and inefficiencies.
No less than the National Economic and Development Authority (Neda) had flagged earlier the economic fallout from the ports congestion, of which the BOC is a key factor.
Addressing the port congestion being experienced by truckers and manufacturers in the past few months will take time and could dampen the country’s trade performance this year, according to the Neda and several economists.
Socioeconomic Planning Secretary Ernesto M. Pernia admitted to the BusinessMirror that the port congestion has played a part in the country’s lackluster trade performance in 2018.
Meat Importers and Traders Association (Mita) President Jesus C. Cham also earlier told the BusinessMirror that the port congestion of the past few months was worse since it started in August 2018.
“Port congestion slows down movement of trade, so it’s partly to blame [for the slowdown in trade],” Pernia recently told the BusinessMirror.
University of Asia and the Pacific (UA&P) economist Victor A. Abola also described to the BusinessMirror that what is being experienced is “severe port congestion.”
Abola said because of the effects of port congestion, the Philippines can expect slower export earnings and import bill growth.
Congestion particularly at the Port of Manila has also been cited by German firm Hapag-Lloyd as the reason it has “ceased acceptance for all reefer cargo to Manila, for both North and South Harbor.”
The notice also cited “limited trucking capacity” as another reason for the stoppage of reefer imports to Manila. The notice was posted in its web site on January 23 and was said to be effective immediately.
“Yes, [there was] severe port congestion. Plus street traffic. Container trucks can make [fewer] trips to port and back. Some cargo [are] waiting three weeks in port,” Abola said.
Probe’s focus: Operations, not corruption
The corruption issues at the BOC are being well handled by the Blue Ribbon committee, Gatchalian told the BusinessMirror on Wednesday.
“Definitely, there’s a lot of economic drawback from poor operations at Customs. A simple change in leadership is only a short-term solution. We need long-term, sustainable solutions,” Gatchalian stressed.
His committee inquiry “will focus on economic solutions,” and leave the corruption issues to Blue Ribbon, chaired by Sen. Richard J. Gordon, who he said has been doing a rigorous investigation.
Gatchalian said the long, tedious process at Customs is a factor in the port congestion, but acknowledged that the BOC needs to be helped in arriving at solutions that improve efficiency without risking even more corruption and smuggling, especially of contraband like dangerous drugs.
He cited countries like Singapore and Thailand, as well as Hong Kong, which conduct work in a “very efficient and speedy manner, but hindi nalulusutan [but smugglers can’t get past them].”
The inquiry his committee will conduct will particularly focus on why this cannot be achieved in the Philippines.
With “more stakeholders” he plans to invite—businessmen, academe, long-time customs practitioners, logistics experts—Gatchalian said “we will focus on economic solutions.”