CRACKING DOWN ON SMUGGLING

When Leandro Mendoza was appointed to the Department of Transportation of
Communications (DOTC), President Arroyo issued what seemed to be a strange
order: she told the former chief of the Philippine National Police to
coordinate with the Bureau of Customs in intensifying the campaign against
smugglers.

The President, it turned out, was referring to smugglers who used the
country's extensive, porous coastlines to bring in everything, from fake
imported cigarettes to sugar, guns and prohibited drugs. And she wanted the
Philippine Coast Guard, which is under the DOTC, to go after the smugglers.

It has long been known that many smugglers do not even bother to play
hide-and-seek with the Coast Guard. Many simply bring their contraband
directly to the container ports, pay off Customs personnel and then stash
the goods in duly bonded warehouses. Any campaign against smuggling will
require a purge of the Bureau of Customs.

Legitimate local businessmen have long complained about smuggling. These
businessmen are struggling enough amid the global economic slowdown and
competition posed by neighboring countries. Smugglers clearly pose an
additional burden. Businessmen who use smuggled goods naturally pose unfair
competition to those who must rely on legitimate sources of materials.
Smuggled goods also skew not only normal pricing mechanisms but other
market forces as well, wreaking havoc on the economy.

In recent weeks local entrepreneurs have complained about rice smuggling.
Consumers aren't complaining about the cheaper imported rice, but local
producers are naturally protesting. President Arroyo has called an
interagency conference to address the problem, which is turning into a
political scandal. The renewed campaign against smuggling is welcome, but
the controversy over rice must not divert attention from other goods that
are also being brought in regularly. And the campaign must result in the
arrest of smugglers, some of whom have gained notoriety and have survived
several administrations.