Jpepa implementation to cost BOC P12.5B in forgone revenues
Business Mirror | Sunday, 18 January 2009
Jpepa implementation to cost BOC P12.5B in forgone revenues
Written by VG Cabuag / Reporter
THE Bureau of Customs (BOC), the national government’s second-largest revenue earner, said the implementation of Japan-Philippines Economic Partnership Agreement (Jpepa) will hurt its collection for the year as it stands to lose billions of pesos.
Based on its initial computation, the said bilateral agreement, which was ratified by the Senate late last year, will result in about P12.5 billion in forgone revenues from its collection from last year, BOC Commissioner Napoleon Morales said.
Imports from Japan make up 10 percent of the bureau’s revenue collections, which from last year’s target amounts to about P25.4 billion, he said. Morales said half of that amount would be forgone revenues.
“If we used to collect 10 percent on items A-Z imported from Japan, some will be reduced to 8 percent, others 5 percent; some will be 3 percent or 2 percent depending on the items...until everything will become zero. Definitely, it has an impact on our revenue generation,” Morales said.
“But the way I look at it, there will be about 10-percent growth in cargo volume from Japan. Rather than go somewhere else when there were tariffs being paid, importers will scamper to Japan than, for example, China,” he explained.
The BOC is using the Jpepa’s forgone revenues to convince the interagency Development Budget Coordination Committee--the body that sets the target collection of both the BOC and Bureau of Internal Revenue--that the agency may not meet its P317-billion goal for this year.
“We will use the effects of the Jpepa in our bid to reduce our 2009 revenue-collection target on top of other measures to plug such expected revenue loss,” Morales added.
The target for this year is about 25 percent higher than last year’s target of P254 billion, a goal that has been surpassed by the BOC by about P10 billion to P263.75 billion.
The Jpepa calls for the elimination or lowering of tariff rates in goods both countries trade with each other.
Japan is the country’s second-biggest source of imports with an 11.6-percent share of the total as of September this year, according to recent figures from the National Statistics Office.
For the period, imports from Japan recorded payments worth $563.93 million, a decline by 2.8 percent from last year’s $579.85 million.
Revenue from the Philippines’ exports to Japan, on the other hand, reached $640.65 million, generating a total trade value of $1.205 billion and a $76.72-million trade surplus for the Philippines.
The Jpepa is aimed at creating larger and new markets, improve efficiency and enhance consumer welfare that would boost the vibrancy of economies, thereby expanding trade and investment not only between the Philippines and Japan, but also in the region.
The agreement hopes to liberalize and facilitate trade in goods through the reduction or elimination of duties to be implemented in accordance with the terms and conditions set out in the respective schedules of the Philippines and Japan.
