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In-depth probe into oil smuggling sought

Kabataan Party-list Rep. Terry Ridon has called for an inquiry into the rampant oil
smuggling and widespread black market activity in the country.
He formally filed House Resolution !" #urging the $ommittee on %ays and
&eans to conduct an in-depth investigation' in aid of legislation' on the rampant
petroleum smuggling in the country' particularly in our seas and ma(or ports' and inquiry
on the status of technical smuggling cases filed by different government instrumentalities
against erring oil companies in the past years.)
#*ssues pertaining to the oil industry have pervasive and far-reaching impacts on our
nation+s economy') Ridon stressed.
,oting data from the -epartment of .nergy' Ridon said oil demand in /0 stood at
0!.1 million barrels' but the 2ureau of $ustoms said that oil importation for that year
only amounted to !3.! million barrels' which only showed that at least 41.4 million barrels
were sourced from smuggling.
#-espite the 5quino government+s claim that #enough measures are in place) to
curb oil smuggling' ma(or oil industry players themselves suspect a rise in petroleum
smuggling starting from the third quarter of /04 to the present') the lawmaker pointed
Ridon recalled a statement issued to media last 6ebruary /0" by Pilipinas 7hell
Petroleum $orporation $ountry $hairman .dgar $hua which said that while a marked
improvement in the oil smuggling situation was observed in the first half of last year 8 a
direct result of the intensified anti-smuggling campaign of the -epartment of 6inance and
the 29$ in early /04 8 a resurgence in oil smuggling has been noted starting in the third
quarter of /04 to the present' with 7hell e:periencing #sharp decline in sales) in recent
months that $hu partly attributes to intensified oil smuggling activities.
#*n one of the public hearings of the House committee on Transportation this &ay
/0"' it was revealed that there are recent reports of intensified oil smuggling in our
archipelagic waters' particularly in the waters of 7amar and ;eyte') Ridon cited in HR
9il smuggling' Ridon said' results to grave economic ramifications' noting that oil
companies estimate that government loses around <=00 million or P/0-40 billion annually
due to smuggling' an estimate that the -96 itself confirmed.
#This amount is almost at par with the annual budget allotted for the country+s 0
NR # 3491B
JUNE 8, 2014
state universities and colleges' and could have been allotted instead to basic social services
such as health and housing') he lamented.
Ridon cited at least three known modus operandi for oil smuggling>
?@ 7muggling petroleum products in special economic Aones as those in 7ubic and
2ataan which en(oy certain ta: e:emptions' then selling the products ta:-free
outside the AonesB
?/@ Technical smuggling or the gross understating of the volume and value of oil
products entering the country+s ma(or ports' which result to lower ta:
evaluationsB and
?4@ 9il smuggling via sea' which works by having a large ship loaded with imported
petroleum floating some distance out at sea' which in turn loads small local
feeder vessels that would eventually deliver the smuggled oil into the country'
making it close to impossible for customs authorities to question the source of
the petroleum products.
5ccording to a latest study published last 6ebruary by the Clobal 6inancial *ntegrity
?C6*@' a non-profit %ashington -$-based research and advocacy organiAation that focuses
on illicit financial flows' smuggling or #trade misinvoicing) is so widespread in the
Philippines that over the past decade' #/= percent of the value of all goods imported into
the Philippines 8 or one ?@ out of " dollars 8 goes unreported to customs officials') states
HR !".
The C6* report' Ridon said that since 110' the Philippine government has lost at
least <1.4-billion or over PD00 billion in ta: revenue due to customs duties evasion
through smuggling alone.
#The said amount is almost equivalent to the total budget allotted for the whole
social services sector ?including education' health' employment' and social services@ for
fiscal year /0"') Ridon concluded. ?40@ dpt