Everyone is talking about flood control scams right now. Thanks to Congressman Zaldy Co’s three-part video exposé , corruption headlines are all about ghost projects and overpriced construction. Co’s claims, whether proven in court or not, point to systemic, organized corruption coming from the very top. It’s not just a few bad apples.

But hold up—overpriced infra is just one type of corruption. In an earlier post that I have on the economic effects of corruption there are  other sources of corruption. This post looks at something that is as insidious as overpriced infrastructure, but rarely gets the same spotlight: Smuggling and Customs Fraud.

 

How Bad is Smuggling and Customs Fraud?

It is a massive problem: The Bureau of Customs (BOC) seized a record ₱85.167 billion in smuggled goods in 2024. That is a huge amount. However, for every peso that gets seized, there are likely many more shipments that slip through undetected.

The Department of Finance (DOF),  specifically,  thinks the government loses up to ₱150 billion this year alone from smuggling. That’s a huge gap!

Less money collected = less money for services that help Filipinos

This lost money isn’t abstract; it’s cash that should be funding public hospitals, schools, and social services, or helping keep your taxes from going up. Instead, it goes into smugglers’ pockets. The patterns are the same: Just like the flood control mess, customs fraud involves “leakage, collusion, and public money quietly diverted.”

How do they do it? Smugglers use misdeclaration, undervaluation, or outright concealment of imports (from luxury cars to rice) to avoid paying full taxes and duties. This is called fiscal leakage.

The consequences stack up: 

  • Less revenue means fewer services for Filipinos, and the government might have to borrow more or raise taxes.
  • It’s bad for business: Honest companies that follow the rules are put at a disadvantage against the cheaters. This increases inequality and makes the economy less efficient.

The BOC even said smuggling is “not just an economic issue – it is a national security concern.” Seriously.

 

The big takeaway:

Smuggling and customs fraud aren’t fringe crimes committed by lone bad actors — they are structural problems that bleed the national budget, undermine honest businesses, and impose hidden costs on every Filipino. When illicit trade thrives, it’s not just the smugglers who win — it’s everyday citizens who pay, one way or another.

As we push for economic growth and improved public services, we should demand stronger enforcement, transparency, and accountability at customs. Because until we plug these fiscal leaks, no amount of rhetoric or good policy will be enough to build a robust, equitable economy.

As we draw 2025 to a close, coming from the heels of a series of rallies against corruption: 

let’s keep in mind that change will only happen if we demand systemic, lasting change. 

Again: Don’t just swap out the leaders. We need systemic, lasting change. Otherwise, we’ll just keep having the same problems over and over. Enough is enough!