Dads: A freeport will kill local industries

An aerial view of Cebu Ports. (CDN FILE PHOTO)

LIFTING taxes levied on imported goods could kill local industries and manufacturers, some Cebu City officials said.

Councilors Joy Pesquera and Jose Daluz III both said that without tariffs, more imported goods would flood the local markets and could displace local providers.

“It will kill the local industries because goods from other countries will flood our market and compete with our local products. It’s just like the ukay-ukay that competed with our local RTW (ready to wear) products,” Pesquera said.

Daluz, for his part, said that taxes imposed on imported products is basically a measure to regulate the entry of these products and prevent them from stealing the markets of local manufacturers.

Eventually, he added that this could mean that local employees would lose their jobs.

The two legislators expressed their opposition to the suggestion of Cebu City Mayor Tomas Osmeña for government to stop collecting custom duties and introduce the freeport concept as a means to end corruption in the Bureau of Customs (BOC).

The mayor said the BOC should focus on banned items like drugs and explosives.

Councilors James Anthony Cuenco and Raymond Garcia also said that the mayor’s suggestion is like “killing the goose that lays the golden egg,” which Cuenco described as a “pretty stupid solution.”

Cuenco agreed that doing so will kill local industries as admittedly, they can’t compete with cheaper imported products.

“We will, in effect, be killing the local industries because they can’t compete with imported goods whose prices can be lower than those produced locally as a result of no tariff. There will be massive layoffs, in effect killing our economy,” Cuenco said.

He suggested that government should instead consider “privatizing” the customs bureau as a “better alternative.”

Garcia added that the taxes collected from imported goods is a major source of government revenue and cannot be easily removed.

Councilor Joel Garganera agreed, saying that the BOC is the government’s second biggest source of income after the Bureau of Internal Revenue (BIR).

“We just can’t lift customs duties. Instead, lift those unnecessary requirements and make it easy for importers, of course, without sacrificing the compliance of valid regulations,” Garganera suggested.

Meanwhile, Councilor Sisinio Andales said that corruption will always flourish in whatever government agency with the wrong people.

He said the BOC should be manned by people who are “not prone to corruption.”

Even if taxes are lifted, there will still be corruption if the people in the BOC are corrupt, he added.

Councilor Jerry Guardo also agreed that corruption can come in many forms aside from tax levy.

“If Duterte has shown that he can catch the big fish in drugs (Parojinog, Espinosa, etc.), then he must also catch the big fish in corruption,” he said.
Councilor Eugenio Gabuya Jr., however, said he supports the mayor’s suggestion.

“It can lessen corruption and can bring prices of imported goods down. I will support this move,” he said.