Revenue leakages from smuggling agricultural products are estimated at around ₱150 billion this year, according to the Department of Finance (DOF).

“The estimate of the leakage for the year will roughly be ₱150 billion,” Finance Secretary Ralph G. Recto told reporters on the sidelines of the Development Budget Coordination Committee (DBCC) briefing at the Senate finance committee on Tuesday, Sept. 2.

Recto noted that this figure only covers losses incurred by the Bureau of Customs (BOC). Smuggled commodities include general merchandise and oil products, such as gasoline, diesel, kerosene, liquefied petroleum gas (LPG), and other refined fuel products.

According to Recto, the last time the DOF met with BOC Commissioner Ariel F. Nepomuceno, “they presented us the catch-up plan and we presented to them our catch-up plan that I think they should do.”

Meanwhile, the BOC is expected to incur losses of ₱4 billion by the end of the two-month period, or approximately ₱2 billion per month.

Losses always exist, Recto said, but argued that lower rice prices translate to slower inflation, which creates room to reduce borrowing costs that will benefit 150 million Filipinos.

Recto, who holds one vote on the seven-member policy-setting Monetary Board (MB), told reporters that he is in favor of further reducing the recently trimmed key lending rate to 4.75 percent from its current level of five percent.

Last year, the BOC confiscated illicit goods, including agricultural items, valued at ₱85.2 billion following 2,116 operations aimed at curbing various forms of smuggling across the country.

Based on records, counterfeit goods topped the list of seized items by value, with an estimated ₱34.7 billion, followed by assorted items (₱33.4 billion), cigarettes, tobacco, and vape products (₱9.3 billion), vehicles, accessories, and vessels (₱4.2 billion), and illegal drugs (₱1.9 billion).

Finance Undersecretary Charlito Martin R. Mendoza, who oversees the operations of the Bureau of Internal Revenue (BIR) and the BOC, told reporters that Customs revenue will “definitely” grow only by single digit.

“Definitely single-digit, because BOC is flat in terms of growth. Their growth for the first half is just around 1.2 percent,” Mendoza said.

However, Mendoza said revenue losses from illicit trade are expected to decline in the coming years on the back of intensified measures against smugglers.