GTEB probes irregularities in use of RP garment quota

The Garments and Textile Exports Board is looking into reports that the Philippines’ quota allocation is being used by other countries to peddle their goods to Europe following an abnormal rise in the country’s exports of pants to the European Union in the past two months

Trade and Industry Secretary and GTEB chairman Manuel A. Roxas II said preliminary investigation showed that several Philippine apparel manufacturers had no production. He said some companies also failed to show the goods that were supposed to be shipped to EU countries.

GTEB records showed that shipments for the period February to March 2003 surged by 125 percent to $54.97 million from $24.39 million the previous level.

"This abnormal rise in export transactions greatly alarmed us that our garments board immediately conducted a thorough investigation of the companies that reflected unusually high quantities and values of exports of pants to EU," Roxas said.

Roxas said this led to the conclusion that these foreign companies were actually engaged in transhipment activities, which is considered illegal. It happens when a Philippine exporter makes it appear that it is exporting goods made in the Philippines using the Philippine quota, when in fact, these goods are actually produced in other countries.

This activity is usually instigated or orchestrated by unscrupulous brokers who encourage companies to fabricate documents.

"These illegal activities are not favorable for the country because it automatically lessens the work and income opportunities for Filipinos," Roxas said.

GTEB’s counterparts in the EU also reported that other countries are experiencing increased incidence of fraud and export irregularities due to possible transshipments.

In its report, the EU said: "Certain groups are taking advantage of the quota system to make money illegally that prompted regulatory agencies around the world to work together in stopping these activities."