Customs cracks down on Baguio ‘ukay-ukay’ dealers

BAGUIO CITY – The Bureau of Customs has started a crackdown on the wagwagan or ukay-ukay business here  raiding nine warehouses here Tuesday, seizing almost 2,800 bales of used clothing, comforters, and other garments worth P22 million.

Following this, Mayor Mauricio Domogan said Customs officials should instead have investigated and gone after BOC members suspected of conniving with importers considering the goods passed through the country’s main ports and these could not have reached the dealers here if these were checked and confiscated in their points of entry.

But BOC officials said traders engaged in the “underground business” have been using privileges of locators inside this city’s economic zones to illegally import used clothing from abroad.

“We have found evidence that certain locators granted fiscal privileges by our government have abused these perks,” said Bonifacio De Castro, BOC district collector.

According to the BOC intelligence group, locators attached to export manufacturing enterprises (EMEs) registered with the Philippine Economic Zone Authority (PEZA), located at PEZA zones here, have been importing used clothing from countries like the United States and Canada tax-free and without paying any duties.

BOC officials said shipments entered the country through the Subic and Clark Freeport zones, and Cavite Export Processing Zone in Rosario, Cavite.

Shipments were reportedly declared “scrap fabric” intended for manufacture and subsequent export as rags.

EMEs at PEZA Zones are allowed tax-free and duty-free importation of raw materials, capital equipment, machineries, and spare parts.

They are also exempt from paying wharf duties and export tax, impost or fees.

City officials said the crackdown on smuggling of used clothing, would severely affect more than 2,500 registered wag-wagan or ukay-ukay stores, which have served as one of this city’s major tourism draws for decades.

These stores are regarded as pioneers in the used clothing business which had spread nationwide.

The has drawn brisk business that the local government allowed 500 ambulant vendors to open shops at the Baguio night market on Harrison Road from 9 p.m. until 4 a.m.

This time, traders whose warehouses were raided are at a loss on how to recover their business.

One who had a warehouse raided at Hilltop above the city market said BOC agents told them to produce documents which would prove that the used clothes were procured legally before they will release these.  

She said she would be losing half a million pesos if she would not produce the papers. She didn’t elaborate.