Press Release
August 22, 2017

Recto: Lapena must hit collection goal, hit hard smugglers which Duterte says steal P165 B a year

Isidro Lapena, the newly-appointed Customs commissioner, "has no time be an OJT and should hit the ground running after a P1.28 billion daily collection goal" that is vital to government operations.

This was pointed out by Senate President Pro-Tempore Ralph Recto, who said that the Bureau of Customs chief's main mission is to rally the 3,031 employees of the second biggest revenue earner to hit their assigned collection target of P468 billion this year.

"For the BOC, the scoreboard that matters is the one that shows collections. Because if it fails in its collections, many government programs will suffer," Recto said.

Recto said Lapena's other important marching orders come from President Duterte in his Budget Message for 2018, in which the chief executive demanded the stomping out of smuggling.

"Sabi ng Presidente sa kanyang Budget Message na ang nalulugi sa pamahalaan dahil sa smuggling ay P165.5 billion kada taon mula sa mga iniwasang buwis. Sa fuel smuggling, P44 billion a year, o P120 million a day. 'Yang data na 'yan galing sa Pangulo mismo," he said.

Duterte said BOC must launch an "aggressive campaign against smuggling," because it "deprives us of more than P165.5 billion in potential revenues yearly."

On oil smuggling, "the government has been losing revenues of up to P44 billion a year due to fuel smuggling and adulteration," Duterte said on Page 12 of his 37-page Budget Message, which serves as the cover letter that explains the highlights of the P3.767 trillion 2018 budget he has sent to Congress.

To meet its 2017 collection goal of P468 billion, Recto said Lapena must craft "a catch up and turnaround plan" to arrest its consistent record of failing to meet collection goals.

In 2016, BOC collected P398.4 billion of its P409-billion revenue goal. For the first six months of 2017, BOC revenue reached P212.1 billion, also short of the P217.9 billion goal for the period.

"In fairness kay Faeldon, hindi ganoon kalaki ang disparity. Kaunting push pa, makakamit na ang target," Recto said.

Recto said that amidst the controversies surrounding the agency, the bigger picture is that BOC's revenue goal represents a fifth of the total tax revenue target for 2017.

"20 centavos for every tax peso. Thus it can be said 20 percent of the total length of roads built, classrooms constructed, medicine bought, and textbooks distributed this year will be financed by BOC collections," he explained.

In terms of PhilHealth insurance for indigents and seniors, it can be extrapolated that BOC's share in funding would enroll 8.76 million individuals, Recto said.

Recto said Lapena must gear up the BOC for tougher times ahead. "For next year, its collection target, on the very optimistic premise of many new taxes, is P637.1 billion, or 39 percent bigger than its current year goal."

"Ibig sabihin niyan, ang average per personnel collection quota ay tataas sa P210 million sa susunod na taon. It is a big jump from the P154 million per personnel collection burden this year," he said.

"Kaya minsan kahit ano pa ang inis natin sa BOC, dapat suportahan natin ang reform measures sa loob kasi nga 20 centavos per budget peso galing sa kanila, P1.28 billion ang daily collection target, at P154 million kada taon ang collection burden ng bawat isang empleyado ng Customs," Recto said.

Recto said the appreciation of the dollar against the peso, plus the above-forecast prices of oil should bode well for the BOC.

"Ayon sa budget sensitivity index, kapag nag-depreciate ng P1 ang peso-dollar exchange, tataas ang revenues ng pamahalaan by P9.2 billion," Recto said.

BOC collections were premised on a range of 45-48 pesos to US$1, Recto said. "Ngayon, lampas 50 na. Kung tumaas ang value ng imports, dapat sumunod din ang collection."

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