Europe-PH News

The American Chamber of Commerce of the Philippines (AmCham) has joined hands with the European Chamber of Commerce of the Philippines (ECCP) in pressing for stronger action against smuggling to encourage foreign investments.

A day after the ECCP urged the administration to use its new mandate from the people to pursue more vigorously the campaign against smugglers “and their protectors in the government,” the AmCham called on the Court of Appeals to lift the temporary restraining order (TRO) it issued on the filing of smuggling charges against the president and chief executive officer of Phoenix Petroleum Philippines and a Customs broker and allow the case to be tried “expeditiously.”

Delaying the trial of those accused of smuggling, said AmCham President Rhicke Jennings, could have an adverse impact on the country’s economy, as it would discourage foreign investments.

“We are hopeful that the three justices will carefully weigh the negative cost to the economy of further delay and the positive impact against smuggling that an early and highly punitive decision will have on investor confidence,” Jennings added.

In a decision on May 9 that was denounced by the departments of Finance and Justice, which are leading the campaign against smuggling, the appellate court’s 10th Division issued the TRO stopping the DOJ from filing with the Court of Tax Appeals a P5-billion case against Dennis Ang Uy, president of Phoenix Petroleum, and Customs broker Jordan Capin Cabanes for violation of the Tariff and Customs Code.

The chamber noted that “slow judicial action” contributed to the decline of the automotive assembly industry in the Philippines a few years ago.

The group said government actions to enforce an executive order issued in 2002 banning the import of used cars was thwarted by the Regional Trial Court in Olongapo, followed by the Court of Appeals.

The government finally won its case after the Supreme Court denied a motion for reconsideration by the used-car importers in October 2007. In so doing, AmCham said, the Supreme Court enforced the law established by the executive order in 2002.

But in those five years that lapsed, AmCham said, more than 150,000 used cars junked from Japan and South Korea were imported, resulting in the “severe undermining” of investments by major automotive firms in the Philippines. The country, the group added, was left behind by Thailand and Indonesia, which were then able to establish their domestic auto industry and create thousands of jobs for their workers.

“The importance of the case against Phoenix cannot be overestimated and is of equal importance to the case against the used-auto smugglers at Subic, who were never prosecuted. If the accused are successful in delaying justice, other private-sector smugglers and their corrupt accomplices will be encouraged to continue to plunder the economy,” said AmCham Senior Advisor John Forbes.

AmCham Philippines, the oldest American chamber of commerce outside the United States, observed that the scourge of smuggling has plagued the country’s economy for decades and has long given the Bureau of Customs (BOC) the reputation of being the “most corrupt agency” of the government.

This, the group said, was most recently confirmed by the September 2012 enterprise corruption-perception survey of the Social Weather Stations, which revealed the lowest level of satisfaction of any government agency was with the BOC with a 45 percent rating.

While cleaning up the BOC is a noble objective of President Aquino under his administration’s commitment that “kung walang corrupt, walang mahirap [there’s no poverty if there’s no corruption],” AmCham said an equally important objective is to prosecute and punish the big fish among smugglers who are the private-sector partners of corrupt BOC officers.

The group noted that under the Run After the Smugglers campaign of the Department of Finance, numerous cases over the last three years have been brought against businessmen suspected of underpaying proper value-added tax (VAT) and duties on imports.

“The Department of Justice and judicial system should move with determination to investigate all these cases and to initiate actions to prosecute alleged offenders.

Oil smuggling has been an especially pernicious means of economic plunder because of its large volume, estimated to cost the Philippine government for many years as much as P30 billion a year in lost revenue,” AmCham said.

American businessmen noted that oil importers who engage in smuggling conspire and connive with BOC officials at certain ports to underreport the volume of their imports, significantly reducing the 12-percent value-added tax revenue that the BOC should collect on these imports. They then sell the oil in competition with other firms, which pay the legal taxes and duties, creating a “very unlevel” playing field.

AmCham said this severely harms the country’s investment climate and discourages domestic and foreign investors from risking their capital in the country, resulting in fewer jobs available in the Philippines.

Source: Business Mirror; Front Page; 29 March 2013