With the country's termination of its pre-shipment inspection and advance clearing contract with Societe General de Surveillance (SGS) last March 31, senators vowed to closely monitor the collections of the Bureau of Customs (BOC) starting this April.
"We will ask the Senate committee on ways and means to keep a close watch on the BOC's monthly collections," Sen. Loren Legarda, chairwoman of the Senate committee on economic affairs, stated in a press statement.
There were fears that smugglers will become bolder with the lapse of the Philippine government's contract with the SGS, a global import pre-shipment inspection firm, which did business in the country for 14 years. The SGS claims it had curbed smuggling and corruption among BOC personnel.
With pre-shipment inspection, the value of the imports and the duties collectible therefrom were determined by the SGS before the shipments left their port of origin.
A number of lawmakers have claimed that the scheme actually helped put in check revenue leakages due to corruption since BOC personnel no longer had any say in the valuation of goods.
Legarda, for her part, said only time would tell whether or not the government made the right decision in terminating its contract with SGS.
"The bottomline is improved collections. Since the SGS is already out, it is now up to the BOC to prove that it can cope with the loss of pre-shipment inspection and achieve even higher collections," Legarda stressed.
According to her, the BOC collections account for 20 percent of government's annual tax revenue take. "A drop in BOC's collections will surely worsen the budget deficit," Legarda warned.
Legarda pointed out that the BOC collections for this month and the months after "will somehow indicate whether or not there's an unusual resurgence of smuggling activities."
Finance Secretary Jose Pardo had announced that the function of monitoring shipments would be taken over by a new electronic clearance system allowing "ship-to-truck" clearance by imported cargo.
The new imports program called "Super Green Lane" would initially cover top 118 importers in the Philippines, according to Pardo.
The BOC is using the green lane to replace the inspection service used to be done by the SGS. The Super Green Lane fasttracks the release of goods imported by qualified importers selected based on the taxes and duties paid in 1999 and those with good track record or importers with no pending assessment or cases.
Advance processing and clearance of importation is done through electronic processing such that the shipment are already cleared by the time of arrival and released immediately from the carrying vessel directly to the waiting truck for delivery to consignees.
The scheme was met with support by the business community saying clearance of goods is fast and hassle-free.
Meanwhile, industrialist Raul Concepcion earlier said the private sector is apprehensive that chaos may ensue due to the BOC's inability to handle the cargo clearing and valuation. "This will be a good day for smugglers," Concepcion had said.
Fearing rampant smuggling. Concepcion sought for the turnover by the SGS of infrastructure and database it has built in the past 14 years to the BOC to pave the way for the smooth operations of the BOC even without pre-inspection.
According to a Reuters report, SGS Holding SA announced that it plans to base a global data processing center in the Philippines with 150 to 200 employees.
SGS was quoted in Geneva as saying that it is continuing to draw the potential provision of new and innovative services with appropriate parties in the Philippines.
The BOC's collection target this year was originally set at P95 billion. In January, it was reduced to P91.9 billion.
"It would be good if the BOC can achieve the original target, instead of the adjusted target," Legarda said.