Tuesday, February 4, 2014

How much do we lose due to smuggling?

Smuggling is a far lethal weapon that kills our Nation than say, insurgency. We balk in the way our economy is damaged by war, when, in truth and in fact, we are slowly being killed by smugglers who deprive us, the Filipino People, of billions of dollars worth of revenues, which were supposed to benefit our economy, and our people.

Smugglers are silent killers. Those billions of dollars worth of revenues they deprive the economy of, translates to lost economic opportunities to millions of Filipino families and millions more out of jobs because local industries are being killed by imports entering into the country through smuggling and other illicit means.

The Ford Foundation says US$ 410 billion of illicit inflows created the very environment we are in right now. Trade misinvoicing is being blamed as the cause of these illicit financial flows. Let me quote a portion of the report:

The study finds that between 1960 and 2011, illicit financial outflows from the Philippines totaled $132.9 billion, while illicit inflows amounted to $277.6 billion. Thus, over the 52-year time-span, cumulative illicit financial flows into and out of the Philippines totaled $410.5 billion. 
The vast majority of money flowing illicitly into and out of the Philippines is accomplished through the misinvoicing of trade, rather than through hot money flows such as unrecorded wire transfers. Of the $132.9 billion that flowed illicitly out of the nation, $95.2 billion (or roughly 72 percent) was via trade misinvoicing. 
The dominance of trade misinvoicing as a conduit for illicit flows is even more apparent when examining illicit inflows. Of the $277.6 billion in illicit financial inflows over the years, $267.8 billion (or roughly 96 percent) is attributable to trade misinvoicing. 
Moreover, the report conclusively finds that both illicit inflows and illicit outflows are harmful to the Philippines. Illicit outflows drain money from the domestic Philippine economy, they facilitate income tax and customs duty evasion, and they are found to deplete domestic savings. As such, it is concluded that illicit outflows hamper sustainable economic growth over the long-run. 
Interestingly, illicit financial inflows are perhaps an even bigger drain on the Philippine economy. Most of the $267.8 billion in illicit inflows due to trade misinvoicing is the result of under-invoicing imports. It is so widespread in the Philippines that over the past decade, 25 percent of the value of all goods imported into the Philippines− or 1 out of every 4 dollars− goes unreported to customs officials. 
Import under-invoicing is generally driven by a desire to reduce or eliminate the costs of customs duties and tariffs. As taxes on international trade constitute 22 percent of total taxes in the Philippines, such widespread under-invoicing has a severely damaging effect on government revenues. 
The report finds that the Philippine government has lost at least $19.3 billion since 1990 in tax revenue due to customs duties evasion through import under-invoicing alone. 
Combined with an additional $3.7 billion in tax revenue lost through export under-invoicing, the Philippine government has lost at least $23 billion in customs revenue due to trade misinvoicing since 1990.

Look at the report--it says government lost US$ 23 billion in customs revenues since 1990's. Remember the damage wrought by Typhoon Haiyan? It is equivalent to this amount.

We are slowly being murdered deliberately by these smugglers and the people in governance who support them. They are all murderers of the highest order.

So now, if, as told by a Customs official before a Filipino journalist of the Philippine Daily Inquirer that the culture within the Customs is to blame, since cultural change takes time, what we must do to arrest immediately the slide towards further damage, the New Patriots must deprive these smugglers of their lives.

These people committed grave sins against the Filipino People. It is time for the Filipino People to get back what these smugglers stole from them. 

I call on the New Patriots of the New Generation---execute the People's Justice ! Do your duty to God, Country and Family!

Release the Hawks and the Sparrows will help you.