BOC revenue shortfall due to unabated smuggling – COA

MANILA, Philippines – For eight straight years, the Bureau of Customs (BOC) has failed to attain its annual revenue target due to unabated smuggling.

In a report released yesterday, the Commission on Audit (COA) said the BOC’s total income increased by P64.392 billion, from P304.898 billion in 2013 to P369.290 billion in 2014.

“But this was not enough to hit the target of P408.097 billion. The shortfall amounted to P38.807 billion or 9.5 percent,” state auditors said.

Analyzing the trend in the BOC’s performance since 2005, the audit team noted that this is the eighth year the agency missed its target.

“We highlighted in the 2013 audit report that one of the causes of this off-target collection is the failure of the bureau to effectively address smuggling,” state auditors said.

The COA report reminded the BOC that based on the US-based Global Financial Integrity’s study, “Illicit Financial Flows to and from the Philippines: A Study in Dynamic Simulation,” the Philippines loses P65 billion annually to smuggling.

State auditors emphasized that the shortfall in revenue bears on the fiscal operations of the government as evidenced by how the Fiscal Statistics Handbook of 2004-2013 published by the Development Budget Coordination Committee showed that the government’s deficit/net borrowings from 2009-2013 averaged P243.527 billion and reached P95.914 billion in the first half of 2014.

The COA said the BOC should study and employ new strategies in the collection of revenues to increase and meet its target income.

State auditors advised the agency to enhance its intelligence capability and run after individuals or groups violating the Tariff and Customs Code of the Philippines.

The agency should sanction BOC officials and employees who were not able to achieve their targets and reward those who did their job well, the audit team said.