THE Federation of the Philippine Industries (FPI) said the government needs to take action to protect its revenue and reduce its vulnerability to external shocks via a comprehensive crackdown against smuggling.
“In a high-inflation, high-cost environment, protecting revenue ensures government retains the capacity to cushion the most vulnerable sectors,” FPI Chairman Elizabeth H. Lee said in a statement late Monday.
She said curbing smuggling is an “economic necessity,” as the war in the Middle East raises firms’ operating costs through higher fuel and transport prices.
These external shocks affect import-dependent economies like the Philippines in the form of higher production costs, tighter margins, and weaker purchasing power.
“Smuggling compounds external shocks. It weakens the very sectors that must absorb global volatility and sustain domestic growth. Addressing it decisively is essential to economic resilience,” Ms. Lee added.
The entry of smuggled goods weakens domestic industries, she noted.
“At a time like this, the entry of smuggled goods becomes even more damaging. It distorts markets precisely when firms are least able to absorb additional pressure,” Ms. Lee said.
She noted that smuggling and customs leakages are estimated to cost the government up to P500 billion annually.
“With rising public expenditure needs — including fuel subsidies, inflation mitigation measures, and social protection — revenue protection becomes even more urgent,” Ms. Lee said.
She added that the illicit tobacco trade also represents P40 billion in revenue foregone annually by the government.
“These losses represent funds that could otherwise finance ayuda (cash aid), healthcare, and education,” Ms. Lee said.
Over P61 billion worth of illicit goods were seized in 2025, according to the Bureau of Customs (BoC).
The group also noted that the BoC latest administrative order extending the importer accreditation period supports the government’s ease of doing business efforts.
“Predictability and speed are important to reduce business frictions. It is a timely measure given current economic circumstances,” she said. — Beatriz Marie D. Cruz
