January 10th, 2023
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) says estimates that revenue losses could be as high as P53 billion. His committee’s calculations of “obvious undervaluation” of agricultural imports through Subic Port alone indicates that the country could be losing at least P5bn every year in revenues from undervaluation alone among key agricultural products.
“Based on our own calculations of average per kg prices of commodities imported through Subic, we could be losing as much as P4.992 billion in tax revenues from undervaluation of agricultural products alone.”
“And I think the number is much higher since our calculation is based on official figures only. We are not yet counting figures that were not reported for some reason.”
Salceda used 2022 data of import arrivals of pork, beef, chicken, and other agricultural products arriving in Subic and compared them with global trading benchmark prices.
Apart from vegetables, among meats Salceda says that the undervaluation appears to be most evident in beef products, where average per kg prices among Subic import arrivals is just 32% of global trading prices.
“With these numbers from official data alone, the Subic Port officials shouldn’t be saying they are nonchalant. It’s obvious from paper data alone that something’s very wrong.”
Salceda adds that he has credible reports suggesting that some commodities are undervalued to as low as 1/8 the actual commodity price. This means, Salceda says, that “a container van with duties that should be P800,000 pays just P100,000.”
Salceda says that derivations from official data led him “to observe that at least 35% of total commodity value of reported arrivals is understated.”
But, Salceda says, “if the reports of undervaluation to as low as 1/8 are true, actual revenue losses could be as high as P53 billion for agricultural commodities alone.”
Salceda adds that the estimate does not yet include “actual smuggling.”
“This is just technical smuggling or undervaluation. I’m not yet talking about actual smuggling or passing through the port without being reported.”
“That could be bigger. We will investigate to get a sense of the size of actual smuggling on top of technical smuggling.”
“There’s also the issue of misclassification, or products that are not reported according to their real category. We can’t get a sense of the revenue loss due to that practice yet.”
“In any case I find it unacceptable that the Subic Port management would release statements essentially telling Congress that they don’t care enough about the issue”
“There are also commentators affiliated or associated with key management personnel of the Port who have made abrasive statements and personal attacks on me, telling me both that my accusations are unfounded and at the same time warning me who I might be up against.”
“That’s a contradiction in terms. Why would be up against somebody if my committee’s investigation will not hurt anybody’s illicit operations?”
Salceda says that after the investigation into food smuggling, the House tax panel will proceed with investigations into petroleum and other smuggled commodities.
“There will be policy changes. And if things don’t change, I will not be surprised to see personnel changes, too.”