THE BUREAU OF Customs is puzzled — and worried as to why revenue collections have declined in October alongside lower imports.
It’s actually a no-brainer. The largest factor behind a dipping collection is the proliferation of smuggling, which deprives the coffers of much-needed revenues for growth and development.
Worse, the biggest items being imported and smuggled into the country are agricultural products, particularly rice, whose importation has been halted from September 1 until the end of the year.
The government’s alibi — to support local harvest and planting.
Next to rice are vegetables (principally onions, potatoes and carrots) followed by fisheries products (mostly coming from our waters but brought back to us by our Asian neighbors fishing inside the 200-nautical mile Philippine exclusive economic zone).
Then meat and poultry–which because of nagging avian flu and African Swine Fever are still being controlled and managed by the Department of Agriculture for possible contamination of the local farm animal population.
MOUNTING PRESSURE
The BoC flagged a growing pressure on revenues as import volumes had weakened in October, even as it posted modest growth in collections.
Import volumes had slipped by 3 percent in October. Consumption-driven imports, which typically account for a large share of dutiable goods, fell by around 20 percent.
The import slowdown was compounded by the rice import ban, which BOC Commissioner Ariel Nepomuceno claimed had already wiped out an estimated P3 billion in potential revenues in over 60 days, given the drop in global rice prices, the Inquirer reported.
With the ban to last until December 31, foregone collections from rice alone could reach P6 billion, assuming that current market prices remain stable, Nepomuceno said.
“It’s hard to speculate why it dropped,” he said. “We’re trying to be more creative. We’re trying to squeeze some more.”
BULLISH PROSPECTS
Despite the slump, the BOC said its 22-day collections in October had still gone up by 1.9 percent compared with the figure in the same period last year.
Also, the disrupted working days caused by typhoons also caused the slip in import volume.
Interestingly, Nepomuceno remains bullish on meeting the full-year BOC revenue target of P958.7 billion, even as officials anticipate lower collections amid a slowdown in the economy.
“We’re not yet giving up because if we concede already, it might worsen. We’re trying to check if other sources can compensate,” Inquirer quoted him.
From January to September, the BOC collected P701.67 billion, up 1.59 percent from last year’s collection of P690.67 billion. This is about 73 percent of the full-year revenue target.
The BoC has yet to release its official data covering the previous month.