BOC told to trace $7 billion worth of unaccounted for imports

Customs officials from Manila and Beijing are to meet soon to try to reconcile trade data showing imported goods worth some $7 billion reported by Chinese officials in 2010 alone could not be accounted for based on data captured by the Bureau of Customs (BOC).

The 60-percent discrepancy in trade data reported by the Philippine Statistics Authority (PSA)  in 2010, while significantly diminished under more recent data, is still huge, according to Finance Secretary Carlos G. Dominguez III.

He gave instructions for Customs chief Isidro S. Lapeña to meet with his Chinese counterpart as soon as possible to uncover the reason for the discrepancy and address possible structural or policy issues, if any,  and put a stop to the anomaly.

Dominguez told Lapeña’s deputy, Edward Dy-Buco, that his boss must address the matter of the inexplicable trade gap no matter that such discrepancy has diminished over the past several years.

“Just remind the commissioner that he should invite the Chinese bureau of customs chief here. You have to reconcile your figures on the import-export data. Anyway, the difference is not anymore 60 percent. It’s only 48 percent now, but that’s still large,” Dominguez said.

According to Dominguez, official trade data show the estimated discrepancy between registered Chinese exports to the Philippines and registered Philippine imports from China as continuing to fall but still very large.

From a reported gap of 60 percent in 2010, the imbalance fell to 57 percent in 2015, then 48.7 percent in 2016 and only 48 percent in the January-to-July period this year.

In 2010 registered Chinese exports to the Philippines was at $11.56 billion, but Philippine imports from China as reported by the PSA totaled only to $4.628 billion, or a trade discrepancy of 60 percent equal to $6.936 billion.

In the same period, Chinese exports to the Philippines totaled $17.77 billion, while the PSA reported imports from China of only $9.24 billion or a discrepancy of 48 percent or $8.53 billion.

For the same period in 2016, China’s exports to the Philippines was at $17.10 billion, while the PSA reported imports from China of only $8.79 billion, or a discrepancy of 48.6 percent, or $8.31 billion.

“It is going down, but it’s still large. We’re not sure if they’re apples to apples. The definitive figure will come out from Lapeña sitting down with his counterpart and working it out,” he said.

Earlier, Lapeña told Dominguez the discrepancy between China’s exports and imports to the Philippines may be attributed to the gross misdeclaration or undervaluation of goods in either volume or weight.

Such could also result from the possible use of “consignees for hire,” which leads to goods released to hidden traders and not to the consignees on record.

The practice allows the importer to evade the scrutiny of the Bureau of Internal Revenue (BIR), according to Lapeña.

Last year the finance chief said heightened Department of Finance efforts to improve the efficiency of the tax and customs systems uncovered alarming discrepancies totaling P1.8 trillion between the volume of imports reported here and actual figures recorded by countries exporting to the Philippines.

The value gap translates into foregone revenues estimated at around P231 billion, representing 2 percent of the country’s GDP.