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Drilon bats for SGS pre-shipment inspection of imports bound for PH

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By Mario Casayuran 

Senate Minority Leader Franklin M. Drilon is pushing for the tapping of a foreign third party to conduct pre-shipment inspection of imports bound for the Philippines to bolster revenue collection and minimize the current rampant smuggling, particularly of illegal drugs.

Sen. Franklin Drilon (Senate of the Philippines / MANILA BULLETIN)

Sen. Franklin Drilon
(Senate of the Philippines / MANILA BULLETIN FILE PHOTO)

Drilon stressed the importance to the Philippine economy of the help of the third party, identified as Societe General de Surveillance (SGS) of Switzerland, during a recent budget hearing conducted by Senator Panfilo M. Lacson.

But the services of SGS were terminated in March 2000 during the Estrada administration although the pre-shipment system was working resulting in sufficient revenue collection, he pointed out.

He said the reason is laughable in that the Bureau of Customs made the mistake of imposing tax on a single item that came through the Manila port.

The cessation of SGS‘s services was ‘’motivated by reasons other than the public good,’’ he added.

The national government was then ready to pay P800 million due to SGS in the late 70s when the appropriation was deleted in the national budget, he pointed out.

With SGS, Customs would inspect all imported products and goods. The pre-shipment inspections are undertaken by SGS prior to shipment from the country of the exporters.

Past customs anomalies showed that some crooked customs officials violate standing orders that shipments exclusively coming from China must pass through customs x-ray equipment.

After citing the positive points supporting the restoration of the SGS services by Senators Drilon and Juan Edgardo M. Angara, Department of Finance (DOF) Secretary Carlos Dominguez III promised that he would take a close look at the Drilon position.

Under the SGS contract, the BOC was collecting faster and better, Drilon said.

Bureau of Customs (BOC) Commissioner Rey Leonardo Guerrero told the Senate that he has submitted his position favoring a pre-shipment inspection of Philippine-bound cargoes.

In 2007, the BOC said it would need the approval of Congress to be able to tap the services of SGS.

At present, SGS continues as bulk and break-bulk accredited surveyor for the Philippines.

Guerrero said it is easier to monitor the entry of bulk or break-bulk cargoes such as grains compared to containerized vans where smugglers can mix contraband in their declared shipments.

Angara emphasized to Guerrero that the Customs Modernization and Tariff Act (CMTA) that he authored does not prevent the DOF secretary and BOC commissioner from allowing a compulsory checking of imports.

Guerrero said his predecessors have submitted a position paper favoring a pre-shipment inspection of imports at ports of origin.

He said he also submitted a similar position to the office of Secretary Dominguez.

Dominguez told Drilon that he would take a closer look at the pre-shipment proposal and would soon be submitting his position on the issue.

At the start of the hearing, Dominguez said his department is not seriously considering a pre-inspection system.

On the matter of an imbalance in the higher record of imports coming from Chinese arriving in the country than what the Philippines was actually receiving, Dominguez said this could be explained by the Chinese shipments being destined for other countries, likeAustralia, but passes through the Philippines.

China counts it as exports to the Philippines although the country was only used as transshipment route, Dominguez explained.

‘’We are looking at these issues and clean up the definition of what they count as exports and what we count as imports,’’ he added.

Lacson earlier pointed out that the Philippines could be losing billions of pesos in revenues because of this irregularity.

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