Wednesday, January 18, 2006

Smuggling threatens national security

The Philippine Star 01/18/2006

Now that the new Customs chief has warmed his seat, it is time to set his perspective right. Not only must he stop smuggling because it deprives the National Treasury of revenue, he must do it to protect national security as well. Based on what we see around us, it would seem that we might as well declare the country a free port because smuggled items are able to get in with enough impunity to make it seem like we are a free port.

The more dangerous part of this obvious laxity on the part of our Customs operations is that we are vulnerable to terrorists. As it is, there is credible talk that the bargain goods being sold at so-called "tiangges" like 168 in Divisoria are just cover for drug smuggling. How else can the extremely low prices be possible?

A Chinoy entrepreneur related to me how a colleague brought his Mainland China supplier of umbrellas to "168" and told him to match the prices of the umbrellas being sold there. After checking "168" out, the China-based supplier told the Chinoy businessman that the cost of umbrellas at "168" is below his production cost. So, what gives?

Assuming for the sake of argument that the drug smugglers are able to spirit out of Customs all those container-loads of contraband with little problem, wouldn’t it be a piece of cake to substitute those illegal drugs and "168" goodies with something more lethal... like a dirty bomb? I am not being paranoid, even if there is nothing wrong with being one. But the thought of terrorists exploiting this weak underbelly of ours, otherwise known as the Bureau of Customs, is highly possible.

From another perspective, many people question the way US Customs strictly enforces IPR rules on pirated DVDs and premium branded products and justify it as a national security concern. In a way, the Americans are right and not just being paranoid about it. The underground market for pirated goods can be exploited by terrorist groups, and they probably are. We ought to take this perspective as well.

So it is clear that the new Customs chief has pretty awesome responsibilities. The revenue collection aspect is the most visible. It is estimated that missed Customs revenues due to smuggling would have made new tax measures unnecessary. The decline in Customs collections cannot just be a result of globalization and the premature lowering of tariff rates during the Ramos era. Criminal syndicates, with the obvious support of influential people, are simply making a lot of money on smuggling.

Because the new Customs chief came from the ranks, the public generally feels he is part of the old rotten system. That is probably an unfair assumption, but one cannot blame an increasingly skeptical public for refusing to give him or any bureaucrat for that matter, the benefit of the doubt. It is up to the new Customs chief to prove, as quickly as possible, our worse suspicions of him wrong.

Tiger Airlines

Even before the Civil Aeronautics Board (CAB) announced that it is suspending the provisional authority of budget airline Tiger Airways to operate the Clark-Macau route, a PhilStar reader Howard McKay wrote me about the problems the sudden stop of operations caused.

I read the explanation of the CAB several times but could not see any real justification for the sudden order that caused inconveniences to the passengers of the airline, most of all the OFWs. It also seems to me that the CAB is not in tune with recent developments in international aviation that gave rise to budget carriers like Tiger Airways.

Of course, it would be difficult for Internet-based carriers like Tiger to go to the CAB to confirm the fare being charged on every ticket. The way the system works in today’s digital world, what happens out there is really an online auction. The price of a ticket offered changes almost by the minute, depending on demand. That is why if you find a fare being offered that sounds reasonable, you should buy it right away. It will most likely not be offered again, even a minute after.

Even without going into the controversial concept of Open Skies, which I have some reservations too in its purest form, there is a need for CAB to start liberalizing its way of thinking. As it happened, the POEA has reported that thousands of OFWs had their visas cancelled, resulting in missed opportunity of working abroad because there are not enough flights to take them. Instead of being bureaucratically strict, the CAB should encourage cheap budget carriers to help provide those flights that POEA says are not there.

If the CAB is protecting local carriers, that’s misplaced in this case. For one thing, no local carrier flies the Macau-Clark route. Even if that’s close enough to Hong Kong, it isn’t quite the same. More important, Tiger attracts a different class of passengers who are willing to go without the usual amenities. Even trying to buy a Tiger ticket is difficult and requires some computer savvy and a lot of patience. And as our reader points out too, their customer service sucks. The market should be allowed to decide, with no need for help from the bureaucrats, the fate of Tiger Airways.

Anyway, here is the e-mail I received from Clark resident Howard McKay.

A friend of mine went to Macau by Tiger airways on 7th Jan, due to return on 9th. Just after he left for Clark airport on 7th I received a call from Tiger Airways telling me the return flight on 9th had been cancelled and that he would be re-booked on 10th. I told them to ensure that he was told this at check-in..... he was not.

I then e-mailed his hotel in HK but unfortunately he did not get the message in time. He turned up for the flight on the 9th to be told it was cancelled. He then booked a hotel in Macau for one night for the flight on 10th. After checking in, waiting in the airport etc., the Tiger airways plane landed but he was then told the flight for the 10th was also cancelled.

He describes the situation in an email he sent me:

Back to the airport this afternoon, Flight on time, checked in, went > through immigration, sitting at boarding gate, plane lands, people get off, every one stands up ready to go through the gate, then word goes around, flight cancelled, permanently. No apologies, no Tiger Airways staff present to explain, just got given an application form for a refund to fax off to Singapore, payable in six to 10 weeks, and that was it, f**k off.

Quite a few Filipinos with families were distraught, having spent the previous night in the terminal, and they had no money for a whole family of air tickets and another night of hotels. God knows how they will manage in this freezing weather.

My friend returned to HK and booked a Cathay Pacific ticket to Manila.

As he says, goodness knows how the poor Filipino families would manage with no money.

During the saga I tried to contact Tiger Airways to find out what was going on – even ringing numbers in Singapore but all I got was ‘press one, press four, listen to music and so on’. They appear to have no Philippines contact number.

Although the cancellation and the distress are one story, what is the bigger story? I have been told that both PAL and Cebu Pacific have been trying to stop the budget airlines into Clark. I have been told that these recent problems that Tiger Airways have had here are due to the Philippine authorities. Could there be some unseen hand at work?

I first came to the Philippines in 1976 and I am now retired here – with a lovely Filipina wife. I lived in Hong Kong for 27 years and visited the Philippines many many times – up to six times a year. About six or seven years ago, PAL started direct flights from HK to Clark and I spent three weekends in Angeles via that flight.

On the basis that I thought Angeles City was thereby due to ‘take off’ I bought a house and a membership of the Mimosa golf club. PAL then had a strike and never reinstated the Clark flights despite the fact that they were completely full the three times I took them.

Given the undesirable option of flying into Manila I then started taking the direct flights from HK to Laoag for golf weekends. On the four occasions that I took these flights, again they were all full. The demand is obvious.

Anyone who thinks that Clark should be ‘strangled’ to protect vested interests at NAIA does not genuinely have anyone’s interests at heart other than his own.

By the way, my daily paper is The Star and your great column is one reason for this.


Anonymous said...

My husband and I were lucky enough to get the flight out of Macau as scheduled on 1/11/06. We met some passengers that had spent most of the 2 days in the terminal. I guess I would have had to buy another ticket had we been stranded since we had to go home to the US 2 days later. It is unfortunate that some very influential people are opposing ths onslaught of budget airlines. I believe in the long run it would be more beneficial since there would be more access to the country.

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