Report shows decline in BOC collection

MANILA, Philippines - The collection effort of the Bureau of Customs (BOC) has declining in the first half of this year, contrary to reported claims of its officials, a report submitted to the Department of Finance (DOF) showed.

In a seven-page memorandum to Finance Secretary Cesar Purisima, Undersecretary for Revenue Operations and Legal Affairs Group Carlo Carag said that BOC’s collection remained on a steady decline from January to May despite the increase in the average of growth factors such as the tariff rate, foreign exchange and value as compared to the same period last year.

From a negative 14.38 percent growth last January, the total collection went down further to negative 16 percent in May.

“Considering all the growth factors versus the actual percentage growth for January to May 2014 compared to the same period in 2013, there is definitely a decline in the collection effort,” read the memorandum.

Carag also noted that the BOC’s announcements and press releases on increased collection performance have been debunked by various newspaper reports, which noted the agency’s failure to meet its monthly revenue targets since January of this year.

The BOC on Monday issued a press statement stating that the agency has posted revenues of P27.33 billion for the month of June 2014, up by 17.5 percent over the same month last year.

It added that the cash collections – those generated from BOC operations net of the Tax Expenditure Fund (TEF) or paper transactions from government importations – grew 17 percent to P27.28 billion.

The BOC also said that there was an increase in the total collection growth from 11.1 percent in May 2014 to 17.5 percent in June 2014. For the first half of 2014, total revenues reached P173.4 billion, higher by P28.27 billion or 19.5 percent year-on-year.

But records submitted by Carag to Purisima showed a contrary trend. It was found that BOC’s revenue shortfall for the first half of 2014 has reached P25.5 billion.

The report also indicated that the volume of non-dutiable imports increased by 36.3 percent compared to the same period in 2013, while the dutiable imports decreased by 4.5 percent.

“Further study or analysis should be conducted on this date to determine the glaring discrepancy in the volume of dutiable imports vis-a-vis non-dutiable imports,” the report said.

Records showed that from January to March, 6,954 tons of dutiable imports arrived in the country compared to 7,282 tons of dutiable imports recorded in the same period last year.

On the other hand, the BOC recorded 12,631 tons of non-dutiable imports for the same period in 2014 compared to 9,266 tons of non-dutiable imports from January to March last year.

Latest collection reports of the BOC statistical division submitted to the National Treasury showed an average monthly shortfall of 12.8 percent in the first half of this year.

The BOC has failed again to meet its P33.292-billion collection target for June by as much as P6.3 billion when it was only able to collect P26.9 billion, for a collection shortfall of 19 percent.

The National Treasury reports that in January, BOC’s collection showed a 4.9 percent shortfall. This figure rose to 9.2 percent in February, deteriorating further in March by 11.9 percent and 14 percent in April and 17.9 percent in May.