Economist should explain

Otso Diretso torch bearer Mar Roxas was not around in the launch of the yellow line up for the midterm polls that says a lot about the kind of leadership he wanted to bring into what he aspires as “an independent Senate.”

“International Monetary Fund data also showed smuggling was at its worst when Roxas was Interior secretary.

He alone was all around media, however, as he said he seeks to rescue Filipinos from poverty and high prices giving particular focus on rice prices which he said have become beyond the reach of ordinary wage earners.

His campaign branding was “Mar, aming ekonomista (Mar, our economist).”

“I’m 61 years old. I was born 1957 when the Philippines was No. 2 in Asia,” he said.

Mar the economist should, first off, account for the rampant smuggling which was tolerated during his and President Noynoy Aquino’s term.

A trade group had estimated from 2011 to 2015 some P904.6 billion worth of products were smuggled into the country.

The Federation of Philippine Industries commissioned the Center for Research and Communication Foundation Inc. of the University of Asia and Pacific (UA&P) to do a study that found that smuggling was most rampant on petroleum, steel, resins, wood, cigarettes, sugar, palm oil and automotive batteries.

The value of smuggled goods was derived by computing the difference of the exports value from the host countries and the import value recorded in the Philippine Statistics Authority, according to UA&P Professor Rolando Dy.

The highest value of smuggling was recorded in petroleum industry, amounting P680 billion from 2013 to 2015; followed by steel industry at P106.1 billion; resin, P42.9 billion; palm oil, P30.9 billion; wood, P24.8 billion; cigarettes, P9.8 billion; sugar, P9.3 billion, and automotive battery, P750 million.

The impact and multiplier effects of the smuggled goods from the eight industries in five years resulted in P495.5 billion losses in the country’s gross domestic product, P1.1 trillion losses in gross output, P77.2 billion losses in household income and 291,070 displaced workers, the study showed.

Smuggling then led to interlinked negative economic repercussions and lost government revenues.

Aside from the eight industries, smuggling was also rampant in imports of meat products and rice.

International Monetary Fund (IMF) data also showed smuggling was at its worst when Roxas was Interior secretary and Noynoy the President with the value of goods illegally entering the country averaging $19.6 billion annually compared to $3.1 billion under President Joseph Estrada and $3.8 billion under Gloria Macapagal-Arroyo.

In his first two years in office, the value of smuggling under Noynoy totaled $39.2 billion, more than the $35.6 billion during Arroyo’s nine years in office.

These estimates were based on data from the IMF’s Direction of Trade Statistics.

The IMF estimates were based on the value of exports to the Philippines reported by a foreign country against the value of imports from government figures. To compare the two sets of data, economists use various formulas, the simplest of which involves reducing the export value by 10 percent to account for the cost of freight, insurance and other shipment costs.

China, for instance, reported that its exports to the country from July 2010 to June 2012 amounted to $33.3 billion. On the other hand, the Philippines reported that its imports from China during the same period totaled only $14.7 billion.

Now the economic managers of Rody have scaled up the fight against smuggling through modern x-ray machines and the review of procedures for the valuation of goods.

Also under review is the possibility of privatizing certain aspects of the functions of the Bureau of Customs.

The first question Mar the economist should answer should be how political expediency and accommodation got in the way of achieving the development potential of the country under the six-year yellow rule of Noynoy.