A significant sector of the local economy that revolves on the retail of used clothing popularly known as “ukay-ukay” is in peril, as the Criminal Investigation and Detection Group (CIDG) launched an operation targeting the suppliers of the business.
This week, the CIDG confiscated P2 million worth of used clothing in a warehouse in barangay San Jose, citing its violation of an old law, Republic Act 4653, that prohibits the importation of used clothing.
The CIDG vowed it will continue to target the major suppliers of the business, triggering complaints from downstream retailers including online entrepreneurs who have found a niche market doing live-selling via social media platforms.
P/Maj. Richard John Macachor pointed out that they will only be targeting the suppliers and not the sellers. He underscored the health danger posed by imported used clothing materials.
“Sino ang mga sources? Iyon lang naman ang iniimbestigahan natin. Kasi marami naman ang nagbibenta pero tinatarget namin is ‘yong malalaking sources. Kapag walang sources, matitigil ‘yong ganon practices. This is nag-i-endanger sa health issues ng karamihan kasi hindi natin alam kung contaminated ba ito ng mga sakit o viruses,” he said.
Macachor insisted that ukay-ukay shops are illegal, and questioned why shops operating of these products are given local permits.
“Maaari kasing na-overlook lang ito sa previous administration, previous chief—napapanahon ito dahil sa pandemic, because of the health issues. Iyon talaga, health issues ito. Kung marami ang kumikita, of course, sabi ko nga, kung gusto magnegosyo ay tingnan niyo rin. I’m sure, the city (will) agree with me na tingnan din natin ‘yong batas. Meron palang batas na ganito,” he said.
“On our part, we are not medical experts pero nakakakita kami na maybe, itong proliferation ng used clothings, baka it contributes to the spread. Hindi ito ‘yong conclusion. Meron batas na ganito, bakit hindi namin i-implement, maaaring ito ang makatulong,” he added.
Widespread effect of crackdown
A woman entrepreneur who runs an ukay-ukay shop, who asked not to be identified, said she had been running the business for the last three years.
“Mawawalan kami ng trabaho, ito lang naman ang inaasahan namin sa boarding house namin at kung mawawalan pa kami ng trabaho, ang hirap naman para sa amin. Bago lang din sa amin (‘yong batas). Sana ay huwag nila ipagbawal kasi number one, kami ang mawawalan ng trabaho, kawawa naman kaming ordinary sales lady at mawalan pa kami ng trabaho,” she said.
Selling of ukay in stores is legal
Atty. Arnel Pedrosa, city administrator explained that selling “ukay” is legal presuming that it already complied with the needed requirements before entering the city.
The regulation of the city government is through providing clearances such as coming from DTI and Bureau of Fire Protection and their compliances with the building code and sanitation.
“Kapag dumating na ‘yan dito, nagkaroon na ng presumption of regularity na lahat ng duties niyan, taxes, and clearances na pinagdaanan ng merchandise or articles na ‘yan ay na-comply. Kapag ‘yan ay nasa tindahan at all display na, ang pwede na lang gawin ng city government diyan ay i-regulate,” he said.
“With regards to the source kung ‘yan ay imported ba o hindi, hindi namin malalaman ‘yan. Pero kapag dito na ‘yan sa lungsod, ang presumption diyan ay dumaan ‘yan sa mga ahensya na dapat daanan,” he added.
Pedrosa said the CIDG operation should prove if the supplies in the warehouses are imported without proper documents, did not go through BOC, or failed to pay excise tax or whatever tax imposed during their importation.
But if the product is already on display, Pedrosa said they can no longer determined whether it is imported or not.
“Dapat doon pa lang tingnan agad, sa origin ng merchandise na ‘yan, ng used clothing na ‘yan. Dapat doon pa lang na-check na ‘yan hindi ‘yong dito na lang nila papansinin. Naka-display na, for sale na, may bumibili na. Hindi magandang sistema ‘yon, pangit na sistema ‘yon,” he said.
“Oo syempre, ang presumption niyan ay legal. Idi-display ba ‘yan diyan nila kung ang kanilang merchandise o item nila ay illegal? Saan ka nakakita na nakaw ang (produkto) mo, ibibenta mo openly? Hindi maganda ‘yong reason mo kung magbibenta ka ng nakaw o smuggled na tinatawag—at ‘yong iba pang requirements niyan na ini-impose under law and ordinance, lumalabas ang presumption niyan ay legal, legit ang transaction mo,” he added.
Pedrosa stressed that if the store will be proven selling smuggled articles or merchandise, it will be ordered for closure.
Online sellers plight
Online sellers have proliferated during the pandemic as people stayed home and became more active on social media.
Lorena Jardino started selling apparel in 2020 from local suppliers and is afraid that it would be stopping anytime soon.
“Malaki rin talaga epekto kasi kagaya niyan, paisa-isa lang ang nabibili ko na bundle. Nag-iisip din kami kung saan kami makakakuha ng mabibilhan namin or hindi naming alam kung makaka-online selling pa rin ba kami. Nalungkot din kami kasi ‘yon na lang ang hanapbuhay namin sa araw-araw na kinukunan din namin ng pang-gastos,” she said.
“Oo (threat) talaga. Nag-online pa rin ako pero hindi na tulad ng dati, patago-tago kay baka bigla kami sitahin,” she added.
She observed that her buyers and viewers in online selling also decreased after the reported operation. Jardino gets a bundle for a range of P5,000 to P7,000 and earns P2,000 profit.
DTI permits given
Sellers of the growing number of stores in the city said that their supplies came from either local suppliers or directly sourced out from Manila.
Welson Paz, Department of Trade and Industry (DTI) Palawan trade specialist said they are not allowing “ukay”, “wagwagan”, or “bagsakan” businesses to be registered under its trade name which is the first step in acquiring permits to operate. He added that DTI is informing their clients applying for business name registration that selling imported “ukay” is not allowed.
The retail businesses of clothes seen all over the city are registered as dry goods or apparel under the retail section of the business name registry, he said.
Based on the data of DTI Palawan, the businesses registered under apparel, RTW, dry goods, clothing, and fashion boutique is 118 in 2016, 140 in 2017, 198 in 2018, 228 in 2019, 363 in 2020, and 241 as of June 2021.
“Makikita natin sa market, talagang dumami. Kalimitan, ang naka-register sa atin ‘yan dito ang kanilang trade name ay dry goods or apparel, iyan ang pinapayagan. Sa product na ‘yon, dapat ay brand new or locally second hand. Kasi kung nilalagay nila na ukay-ukay, tinatanong namin kung saan, kung ito ay galing na ibang bansa. Kasi kung galing ibang bansa, ina-advise namin na ito ay hindi pwede kasi bawal nga,” he said.
The DTI’s jurisdiction over goods is only in the business name the entrepreneur applied for, he said. The business name registered is good for five years before its renewal, but the DTI may cancel if proven that the owner is not selling the product declared upon registration.
“Makikita naman natin na may halo, na may branded din, mahirap mag-identify. Kapag sinabi mo na ganyan kasi imported, galing ibang bansa pero may ibang products din sila na branded din na sinasama nila. Ibig sabihin, pasok pa rin siya sa trade name na ina-apply’n niya. Ayon lang, hindi namin (ma-check) ang product nya kasi operation na. Sa amin, ang name niya ay may binibenta na tama naman sa na-declare niya product,” he said.
Paz said that retail tops the most registered business in trade names under DTI Palawan. Based on his estimation, the apparel and dry goods business is at 20% in Puerto Princesa and 40% in province-wide.
“Makikita natin na ang dami (ukayan) at ang dami rin tumatangkilik, tingin ko makakaapekto talaga (operations on suppliers), bababa talaga (local economy). Kaso nandoon tayo sa meron din batas, batas is batas. Hindi naman ang operation nila ang illegal kasi may permits naman sila, document, ang violation doon ay ‘yong tinitinda,” he said.
On the part of online sellers, there would still be a violation if they are selling imported goods or ukay in the digital market.
“Papasok pa rin na may mali sa binibenta nila kung ukay na galing imported kaso parang nasa cyber na, NBI na ang pwede mag(huli) sa kanila,” he said.
Burden of proof
Gladys Fontanilla- Estrada, collector of customs II of Bureau of Customs (BOC) said that if the imported goods were confiscated out of port, it is in the jurisdiction of the other agencies but it could be turned over to their office.
She said that the burden of proof to present that the confiscated goods were not imported outside the country is on the part of the importer from the province even claiming that it came from Manila.
“Itong mga sinasabi natin na ukay-ukay—maaaring galing ‘yan sa Maynila, Cebu, galing ng Iloilo. Whether or not na-clear ni customs itong mga ukay-ukay, ito ay malaking katanungan. Sa part ng mga nahuli, nasa kanila ang burden of proof na legal nila na na-acquire ang mga produktong ito. Ano ba ang pwede nila gawin? Patunayan nila na una, ito ay legal na importasyon. Kapag sinabi natin na legal, mula kay importer,” she said.
“Ang burden of proof ay nasa side ng may-ari ng ating mga produkto para patunayan na ito ay legal na pumasok sa ating bansa. Kung sila ay bumili lamang sa Maynila, siguro ay pwede sila magpakita ng sales contract mula sa kanilang pinagbilhan. Ang kanilang pinagbilhan dapat maging willing din na ipakita na sila ay legitimate importer at kinakailangan nila mapalabas na ito ay hindi ukay itong kanilang in-import,” she added.
Estrada said that importation of apparel is allowed as long as there is a document that will support the legal importation.
She said that the business permit granted to sellers does not assure that businesses could sell illegal products.
Customs will only cover the importation, but when it comes to those who patronize ukay goods, there must be a criminal law that will state their violation, she said.
Macachor cleared that CIDG will not go after ukay stores but will focus on the sources of goods.
“Pwede naman mag-import ng apparel, garments, pwede ‘yan. Kailangan mapatunayan sa dokyumento ng importasyon, kung wala ito, iyon ang medyo magiging problema natin,” she said.
“Sa Puerto Princesa, ngayon pa lang naririnig ang role ng Bureau of Customs, so ang ganyan ay naiintindihan ko naman dahil binigyan natin ng business permit ang ating mga tindahan. Pero hindi sinasabi ng business permit na magtinda ka ng illegal,” she added.
(With reports from Arphil Ballarta)