Olongapo SubicBay BatangGapo Newscenter

Friday, January 25, 2008

Senators to bare bigger smuggling exposés

By Angie M. Rosales - Tribune.net With Sherwin C. Olaes and PNA
With the can of smuggling worms opened in the Senate, more cans are vowed to be opened by senators, with the promise of more worms crawling out through a "big exposé" that may even rip open a claimed scam job at the Subic Bay office where import licenses are said to be sold for P1 million each, and where cases of smuggling are claimed to be quickly dropped and dismissed by the Department of Justice.

But there's more than the alleged P12 billion worth of revenues lost due to oil smuggling last year that the Senate recently uncovered during a hearing Wednesday and it is likely that the Senate will be conducting a thorough probe into this anytime soon.

Opposition Sen. Manuel "Mar" Roxas II indicated that he has in his possession alleged damning evidence to expose this illegal smuggling activity, enough to move for a separate probe in the upper chamber.

"For the record, I have information which I will collate and formalize, from the oil companies themselves that show that this is not the case and I will look into that," he said during the proceedings called by the ways and means committee chaired by Sen. Francis Escudero.

Roxas made the statement as Department of Finance (DoF) and Energy (DoE) officials admitted to the ongoing oil smuggling of some four billion liters of oil which were unaccounted for last year even as they tried to wash their hands of on how they overlooked this matter.

Department of Energy Secretary Angelo Reyes himself confessed, during an interview with reporters that oil smuggling is in existence, but also claimed they have no official figures to determine the extent of it, saying that he believes it is "sizable."

He made the statement in the light of revelations made by Escudero, noting the documents submitted by the DoE and DoF on the discrepancy in figures of imported oil accumulated last year, as only over eight billion liters were taxed by the Bureau of Internal Revenue (BIR) while records from the Bureau of Customs showed tariffs imposed amounting to P24 billion.

Reyes himself, when this matter was brought up by both Escudero and Roxas, said there is a need for a technical working group (TWG) of the DoE to confer and reconcile the figures.

"We're comparing those coming in as (oil) importation and the consumption…because there may be some that are not taxed, " an official from the DoF said during the hearing.

"I understand that it's the technicality on how its calculated but from a DoF point of view. It would seem to me that it would be of interest that whether in fact the business of petroleum marketing including refining and distributing, was consistent with what was coming in into the country," said Roxas, adding that there is some unit inside that DoF that would be interested in.
"Their data show they do not monitor how much they should collect (in taxes) and this relates to the P50 billion plus of uncollected taxes (annual) other than the VAT (value-added tax) on oil," he said.

Escudero indicated that his committee is determined to dig deeper into the issue.

Senate Minority Leader Aquilino Pimentel, however, is not convinced that Malacañang can curb rampant oil smuggling. "Under the administration of President Arroyo, there is no hope of solving smuggling, since a lot of her allies are involved. Up to now, they cannot reveal who is the godfather of smuggling in Customs. Why not? Why can't it be stopped? These are indications that this adminsitration can't or won't stop smuggling," he said.

Sen. Panfilo Lacson dared Malacanang and DoF to go all-out against rampant oil smuggling, "particularly in Subic to erase suspicions that there is a big businessman who is very close to the Arroyo couple involved in smuggling and to erase the suspicion that this smuggling has the blessings of the President. Billions of liters of oil products in Subic are being imported but these are not taxed. This has been happening for a long time now.

But Mrs. Arroyo is set to review the performance of Bureau of Customs chief Napoleon Morales whether he would be retained based on the Senate findings that the government lost four billion litters of untaxed oil due to smuggling passing from Subic Bay Free Port, in Pampanga last year, which the President considers as serious.
In a press briefing, presidential deputy spokesperson Lorelie Fajardo said the Chief Executive is already seriously looking into the Senate investigation the other day that grilled officials from the DoF and DoE who confirmed the smuggling activities.
Fajardo said the Chief Executive has tapped other agencies and the Presidential Anti Smuggling Group headed by Undersecretary Antonio "Bebot" Villar Jr. to conduct a parallel investigation and verify the Senate inquiry findings.

"We are talking of billions of pesos being lost by the government. The President has ordered this matter investigated and verify the senate investigation. We have to look into this matter first before we talk about on Morales retention or not from the position," she said.

At the same time, Fajardo said Malacañang is supportive of PASG's move to recover some P3.8 billion in damages and revenue losses as compensation against four petroleum firms found to have been engage in technical smuggling.

The oil firms Oilink International Corp.; PTT Philippines Corp.; Tri-Solid Movers Services Inc.; and Mawab and Andan Resources had failed to pay back taxes and penalties amounting to a mere P482 million.

The PASG in one of its operations caught oil firms involved in smuggling, but oil firms entered into compromises with BoC. PASG said government shortchanged of the amount paid, he said this would be brought to court to get the exact amount lost.

But it was also found that the Justice Department reportedly upon review of the cases, have been dismissing these.

Earlier, Villar charged the four oil firms have to pay a balance of about another P400-million for them to erase the stigma of having been caught defrauding the government through technical smuggling of fuel.

Villar agreed with some senators in urging authorities to force oil firms to open their books for scrutiny to find out if they conducted their business legally amid suspicion some of them have been involved in the multi-billion oil smuggling scam which they exposed earlier.

Villar on Thursday blamed the BoC for its 'lackluster' effort which resulted in rampant oil smuggling in the ports of Subic, Batangas and Cebu.

In a radio interview, Villar admitted the presence of unbridled oil smuggling in the country's three major seaports. He virtually blamed the BoC for "deliberately allowing illegal activities" to take place in these three ports.

"We should ask the Customs why it cannot stop oil smuggling. Ask them why they tolerate illegal activities to operate in our ports," Villar said.

He also chided Customs Commissioner Napoleon Morales for allegedly "following orders" from smugglers instead of doing his job from keeping the bureau tainted with politics.

Villar said the BoC needs someone who is fearless in implementing the anti-smuggling law.
He said smugglers get away with impunity their illegal activities by using "connections" or the so-called "padrino system."

This has allowed smugglers to evade paying the proper taxes.

Villar said the PASG has already filed cases against oil companies like Tri Solid, PTT and Oil Link after they found them engaged in smuggling in the port of Subic in Olongapo City.

These companies had to pay hundreds of millions of pesos as advance penalty for tax evasion, he said.

"The PASG will also file cases against 11 signages engaged in oil smuggling," he added.

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