The Federation of Philippine Industries (FPI) said revenue losses due to smuggling have been growing at an increment of 10 percent annually since the last estimate of P250 billion in 2015.
Jesus Arranza, FPI president, in a press briefing said the amount is the estimate on the value-added tax of 12 percent foregone validated by a study of the University of Asia and the Pacific (UA&P).
By extrapolation, the amount lost could have ballooned to P400 billion in 2020.
According to Arranza, increased imports and higher value of products could easily pushed the revenue losses by 10 percent each year, using the P250 billion baseline in 2015.
Arranza said these lost revenues could have gone to better use such as for pandemic response.
“Part of that could have been used to incentivize foreign investors and move some of the manufacturing operations in areas where there is less development so we decongest Metro Manila and create balanced economic development. This is a huge source of revenue for various government projects and pandemic interventions,” Arranza said.
Smuggling he said, is not only depriving the government of revenue but also affects the companies and labor.
“Smuggling will eat up into the market and could increase the prices of production of our manufacturers since downsizing will result into smaller volume that will absorb the fixed cost of the companies. As less volume absorbs the fixed cost, prices go up and will create inflation,” Arranza said.
