Culture in a ‘box’

The low-budgeted  homemade videos, written,  directed, and acted in by the OFWs themselves show them packing mostly ordinary things like canned goods, shirts (even used ones), shoes, vitamins, and perfume. They are funny, but what they say about how they feel is no laughing matter for the OFWs’ family.  For these workers who never get to go home to save on travel money, the balikbayan box, a product of multiple months of savings, is a symbolic sentimental connection with their family. The box is too emotionally precious and private to be opened by anyone, Customs authorities included.  Would the value of the contents of the balikbayan boxes, shown by the OFWs on camera, be more than $500? Yes, or many of those boxes would, in today’s prices.  Are there dutiable items in there as disclosed in the videos by the non-customs expert OFW?  Yes, as some of the items have good value. Only the best for the daughter or son.

Let’s say it, almost every Filipino who travelled and shopped may have smuggled technically, consciously or unconsciously.  The P10,000 value limit for returning residents, or the $500 value limit for balikbayan boxes per Bureau of Customs (BOC) rules are very easy to breach for any travelling shopper or for a non-returning OFW sending a box. The legislative proposals to increase it to current day prices make sense, but making instant changes through issuance of new rules by the BOC, for administrative feasibility, is also a legal and available avenue.

The thing is, even if the limits are increased or updated, that will not impact on the legal authority of the BOC to inspect for dutiable items. Customs searches are, after all, one of the strongest exceptions to the bill of rights protection against unreasonable searches and seizures. In other words, BOC searches can practically be unreasonable and would not be in violation of the law.  It is not, however, a legal issue but a trust issue.

To be sure, violations, big or small are all violations.  But there are indeed persistent questions before harping on the OFW box.  When containers get off loaded from the ship, is it ensured that valuables or critical contents are not removed before the containers are officially scanned or inspected? How does one get escorts when they arrive that allow them to pass through customs undisturbed? When one arrives with a suitcase filled with valuables, or suitcases filled with shopping proceeds, sometimes business inventory, what gives him confidence that the customs officers will turn a blind eye? What level of inspection is implemented in private ports? 

Most of us only get acquainted with second hand information, and it maybe coincidental that second hand information is so consistent. As tax consultants, we make sure we conduct all our dealings above board. As it is a Sunday, I am feeling mixed about sharing one first-hand information I was personally involved with, and I will share this with good intentions of helping the BOC police its ranks, and to warn private entities to be on the guard about brokers they deal with and documents presented to them.

Under a different BOC Commissioner, Company A was assessed for fraud because the BOC official records reflect that Company A undervalued their import entries by 90 percent. Company A, of course was surprised because being a respected multinational, it is their policy to declare and pay what is due.  They also have the documents to show for it, that they declared 100 percent of the transaction value in the import entry declaration. They also paid 100 percent of the duties evidenced by an official receipt (OR) issued by a Customs authorized agent bank. 

It turned out, based on our investigation, that the import entry declaration supplied to Company A by the broker was fake and the authorized agent bank receipt supplied to them was also fake.  Company A made an actual verification with the bank which issued a certification that they do not have an OR with that series nor they issued the OR.  In other words, the broker made it appear that 100 percent of what Company A paid went to the government but actually, only 10 percent of that amount was remitted.  Who benefitted from the missing 90 percent? 

As if the injustice was not enough, during discussions, the customs officer investigating the case said the fraud case will result to an 800 percent surcharge. It does not matter if Company A perpetrated it or not.  I said, last time I checked, the seduced has legal remedies against the seducer and you do not send the rape victim to jail.  It needed the participation of the Commissioner then, who fortunately stepped in to make sense and resolve the case.

Not to justify the behavior, as I think we never can, even formal studies indicate that a very Filipino trait is really the cause of our own undoing.  This is the padrino and pakikisama system.  And it has venue even in private transactions as well.  One example was relayed to me by a friend who previously worked for popular fast food chain.  The customer was following up his take out order of 10 hamburgers.  My friend, working at that morning shift began asking how it could disappear when he saw the burgers were already released from the counter. A fellow crew discretely gave him a hamburger and said “eto, manahimik ka na lang”. Unfortunately, it worked, not because he loves hamburger but because he chose “pakikisama”.

Don’t get me wrong about my stories. We cannot generalize unfortunate situations in any government agency. Employees of private businesses are also predominantly honest and just trying to make an honest living.  Candidly, there is great discomfort on my part sharing the above stories, but my desire to advocate for change overcomes. And awareness is always the first step.

Back to the OFW box, we can empathize with the good feeling of the family members from using imported products as pasalubong and enjoy even for a moment, a lifestyle upgrade somehow. But can we say for now that the sender is more important than the box? And the families of the OFWs care for the safety and health of their hero more than the shampoo or the shoe? OFWs should not stop their remittances in protest.  If at all, they should stop the boxes, and send the cash, earmarked, instead. Then they can explain to their family their new strategy of boxless cash pasalubong,  with flawless smiles and butterfly kisses.

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Alexander B. Cabrera is the chairman and senior partner of Isla Lipana & Co./PwC Philippines. He also chairs the tax committee of the Management Association of the Philippines (MAP). Email your comments and questions to [email protected]. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.