Running after smugglers

Faced with a looming fiscal deficit due to higher spending amid economic slowdown this year, the 20th Congress will start to look into “revenue leakages” in the government, whether due to corruption or weak enforcement of the laws of the land. As the originating body of tax and other revenue-raising laws, the House of Representatives vows to take these initiatives to support the P6.793-trillion budget that they in the 20th Congress approved for this year. Signed into law by President Ferdinand “Bongbong” Marcos Jr. (PBBM), the 2026 General Appropriations Act (GAA) will have about P1 trillion to be partly funded by new borrowings.

And perhaps new revenue-raising measures but not imposing new taxes, Marikina City Rep. Miro Quimbo, chairman of the House committee on ways and means, reassured the public during our Kapihan sa Manila Bay news forum last Wednesday. The primary job of Congress, Quimbo stressed, is not only to pass the budget but also to look for sources to finance the National Expenditure Program (NEP) contained in the annual GAA.

In fact, he cited, 70 percent of the national budget is sourced from the Bureau of Internal Revenue (BIR) and the rest are from the Bureau of Customs (BOC) and others. “When deficit increases, our borrowings also increase. When borrowings increase, we are having difficulties in financing our programs,” he pointed out. As such, the country’s national budget is highly dependent on tax and duty collections of the government and foreign borrowings.

“But more significantly, what happens is when the country has huge increase in borrowings, the interest rates also rise. When the cost of borrowings of the government increases, the borrowings of the ordinary citizens also rise. This means the borrowings for cars, for credit cards, all of that will also increase. So, it is important that we fix our (fiscal) deficit,” Quimbo explained.

“Today, we are managing it well. But there is a relative growth of our country’s GDP (gross domestic product). So, we really need to increase (tax) collection to decrease the deficit,” he warned.

Quimbo announced the initial targets that they in Congress would look into – rampant smuggling of imported agricultural products, including the lucrative illicit cigarette trade. Quimbo particularly vowed to conduct full-blown investigation into the alleged involvement of not just “members of security forces” but also local politicians behind the multibillion-peso cigarette smuggling in the country.

A lawyer by profession, Quimbo believes these reported cigarette smuggling will not thrive with impunity without the knowledge of politicians, especially at the level of local government units (LGUs) like the governors and mayors.

“Cigarette smuggling is really run by syndicates. News that we received showed that there are politicians involved and that is what we are going to know. I do believe that it will not happen without the knowledge of the politician in their area,” Quimbo deplored.

Based on the calculations of both the BIR and the Bureau of Customs, Quimbo cited as much as P44.8-billion loses in revenues collected from the Sin Tax Law last year due to the rampant cigarette smuggling across the country. Quimbo noted with concern the high incidence of cigarette smuggling is not only being done in the so-called “back door” in southern Philippines.

“These (smuggling activities) are happening even in our country’s front door,” Quimbo rued.

“We are seeing local government involvement here because based on intelligence reports, they are the ones in full control of their areas,” he charged.

Towards this end, Quimbo filed a House Resolution (HR) 636 seeking to check if there is need to amend the Sin Tax Law to plug loopholes causing such heavy revenue leakages. Submitted last Jan. 8, HR 636 seeks to conduct an inquiry in aid of legislation into the reported “large-scale tobacco smuggling, with the end in view of protecting public health and safeguarding government revenues.”

At the same time, Quimbo underscored the need to check also apparent “weak” enforcement of the laws, which might be part of the problem.

Following Quimbo’s House resolution, the Philippine National Police-Highway Patrol Group (PNP-HPG) admitted last Monday certain high-ranking members of the security forces might be allegedly behind the illicit cigarette trade. The PNP-HPG made the public confession after the arrest of seven Chinese nationals and the seizure of P129.06 million worth of illegal cigarettes in Quezon City and Valenzuela City.

The suspects arrested on Jan. 14 are “big players” but not the top financiers behind the operation, HPG director Brig. Gen. Hansel Marantan announced at a press briefing earlier in the week at the PNP Headquarters in Camp Crame, Quezon City. According to Marantan, the HPG seized 1,434 master cases of alleged illegal cigarettes and two delivery trucks during the operation based on “verified intelligence” from tips they received.

“Within the next two weeks, we will have a full blown investigation into this matter. We will see if there is a need to change, is it a legislative issue or is it purely an enforcement issue. That is what we are going to determine. We should not forget that smuggling tobacco is now part of the overall anti-agriculture smuggling,” he added.

“And I feel very strongly about this and even our administration feels very strongly about it because it is not like the smuggling of rice. In rice smuggling the farmers are being hit, but there is no devastation on the health of the people,” he noted.

But I hastened to add that hunger and low income cause health problems too for rice farmers.

Under the amended Anti-Agricultural Smuggling Act, Quimbo cited, smuggling now carries a penalty of life imprisonment up to a certain amount involved and is non-bailable.

Quimbo, who now belongs to the ruling Lakas-CMD pro-administration majority bloc, can find support from colleagues in the 20th Congress. The Senate committee on agriculture headed by Sen. Francis “Kiko” Pangilinan dreams of being able to send to jail rice smugglers and other enemies of our country’s agriculture.

But running after smugglers should go beyond political party lines.