BUSINESS The Need to Rationalize the Balikbayan Box Industry

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By JOEL P. LONGARES

With the Senate and the House of Representatives finally recognizing the need to take a second look at balikbayan boxes, we are hoping that the senators and congressmen will soon come up with legislation that would rationalize the balikbayan box industry.
Overseas Filipino workers (OFWs) and other Filipinos living outside the Philippines have been sending gifts and household items to their family and friends in the Philippines since the early 1980s, and yet there is still no law that regulates the sending of these boxes, except for a Customs memorandum order (CMO 79-90) that was issued more than 25 years ago.
Before 1987, balikbayan boxes were charged customs duties. On June 30, 1987, President Cory Aquino issued Executive Order No. 206 that amended Section 105 (f) of Republic Act 1937, also known as the Tariff and Customs Code of the Philippines, that provided duty and tax-free privileges to balikbayan boxes sent to the Philippines by OFWs to recognize their sacrifices and valuable contribution through their foreign exchange remittance that contributed immensely to the national recovery efforts.
With the granting of tax-free privileges, OFWs and overseas Filipinos began sending balikbayan boxes more frequently to their loved ones in the Philippines. Soon, the balikbayan box industry boomed and grew to become a billion-peso industry. Just like the “lechon manok” phenomenon, the industry attracted would-be entrepreneurs, some of whom didn’t have enough capital and the knowhow to run a balikbayan box business.
Because there were no laws to regulate the industry, inexperienced and under-capitalized Filipino freight forwarders and fly-by-night operators entered the lucrative market. In their desire to make easy money, many inexperienced and under-capitalized forwarders drastically dropped their prices to lure customers. Many of these companies cut corners and hired inexperienced workers, resulting in lost or pilfered boxes, delayed deliveries and worse, undelivered boxes that were confiscated by Customs authorities for failure to pay fees and duties.
Worse, some cargo companies colluded with unscrupulous traders who smuggled commercial items using balikbayan box containers.
These plus the delays caused by factors beyond the control of legitimate freight forwarders, such as random inspections by DHS in US ports and Customs authorities in Manila, port congestion and truck bans, have resulted in critical damage to the image of the balikbayan box industry.
I’m glad that the members of the Senate Ways and Means Committee – Senator Sonny Angara as chairman and Senators Grace Poe, Cynthia Villar,  Ferdinand  “Bongbong” Marcos Jr. , Alan Peter Cayetano, Ralph Recto and Bam Aquino — realize that the contents of “balikbayan” boxes sent by OFWs go beyond its dollar or peso values, for these are boxes filled with love and affection for their loved ones in the Philippines.
 
Gifts sent by OFWs to their loved ones in the Philippines through balikbayan boxes is their way of sharing their affection for their loved ones in the Philippines. Thus, it is practically worth more than its actual dollar value.
 
In my 23 years personal experience as a cargo forwarder in the US, I have noticed that it is a common request among our clients that we take care of their boxes and make sure sure that these boxes reach their loved ones in the Philippines on time. OFWS have personal attachments to the goods and gifts they are sending through balikbayan boxes.
 
 As a former OFW in the Middle East myself who also sent balikbayan boxes to my family in the Philippines regularly, I understand the comfort and joy of knowing that your loved ones in the Philippines would also enjoy and partake the fruits of your hard work abroad.
 
Recto acknowledged that under the existing Tariff and Customs Code of the Philippines (TCCP), which was originally crafted in the 1930’s, there are no laws or provisions governing the balikbayan box industry. 
 
As the newly reelected president of the Door-to-Door Cargo Association of the Philippines (DDCAP), my immediate priority is to rationalize the service and rates in the balikbayan box industry. In fact, I have sent a position paper to the senators containing my proposal on rationalizing the industry.
 
The integrity of our industry is being prejudiced by the illegal activities of some fly-by-night balikbayan box cargo forwarders. There are non-accredited cargo forwarders with the Department of Trade and Industry (DTI) that offer almost give-away rates for their services, but are not able to deliver the boxes on time, if not failing to deliver them at all.
 
We must have stiffer penalties for abusers and exploiters in the balikbayan box industry to make it an effective deterrent to abuse.
 
 If we can only have laws similar to the US which impose harsh penalties to mail-fraud offenders, maybe we can have less incidents of balikbayan box or parcel pilferage. Mail fraud is treated as a serious crime in the US since its victims are practically helpless in defending their properties.
 
We should now strengthen the balikbayan box industry, if only to protect the interest of millions of overseas Filipinos, whose affection for their loved ones in the Philippines are expressed through the gifts they send through balikbayan’ boxes.
 
We owe it to our modern-day heroes.
 
(Joel P. Longares is president and CEO of Atlas Shippers International, president of the Door-to-Door Cargo Association of the Philippines, and co-founder of the Philippine American Shippers Association.)
 
 

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