Jul 14, 2020

Barter or the system of exchanging goods without involving money, which can be traced back to the Middle Ages. Bacolod Barter Community, a Facebook group, was founded just this May, two months into quarantine.

Since then, it has enticed over 200,000 Facebook users to join and consensually exchange goods by merely posting and commenting and once an agreement is reached, shipping off the item/s to its new owner. Over 18,000 items are posted and traded each day on the group.

It is not the only online group dedicated to this practice, there are now many groups named after the province or area where its traders reside. 

In Iloilo, through the same online mechanism, Ilonggos exchange anything from food to electronics and sometimes even cars with the exception of live animals and anything that requires strict hygienic protocols. 

In the midst of the pandemic, Charity Delmo, Iloilo Barter Community’s founder observed that people were more than willing to trade things perceived more valuable before like clothing or gadgets for basic necessities like rice, face masks, alcohol or fruits and vegetables.

In an interview with CNN Philippines in May, Delmo said, “Napaka-ganda ng nabuong community kasi hindi na naging ka-valuable yung mga branded things, no, sa mga tao sa Iloilo. Naging mas malaki value ngayon ’yung mga basic needs na dati binabalewala naman ng mga tao.”

A similar scenario is also slowly taking shape in Leyte, where Tacloban City Vice Mayor Jerry Yaokasin himself actively participates in online trading communities. He said such a mechanism allows people who have no source of monetary income to live through the pandemic by exchanging what they have for what they need.

“In a time of pandemic, most people are affected by the financial crisis due to loss of income. With no more cash to buy necessities, the barter allows people to trade their unused or used items. It is a welcome relief for cash-strapped individuals and families,” he told Manila Bulletin.

 

An ‘illegal’ activity

Trade, Exchange, Business, Barter, Market
Image by succo from Pixabay

But these communities will have to stop the deals soon. Because according to the Department of Trade and Industry (DTI), the only place in the country where this kind of trade is legal based on Executive Order 64 signed by President Rodrigo Duterte in 2018 is in Mindanao, specifically in Tawi-Tawi and Sulu.

Despite the rise of such Facebook communities, DTI Secretary Ramon Lopez swore he had never heard of them prior to today’s Laging Handa briefing. He said, “Sa ibang lugar, hindi po allowed ’yung barter trade. Kailangan regular transactions tayo diyan at dapat may tax na binabayaran.”

Lopez found it weird that people would resort to this ancient kind of market but nonetheless swore their office will hunt these “illegal” communities. “Ipapahanap natin ’yun dahil ilegal po ’yung activity,” he said.

 

Regulating barter

Netizens are quick to call out this move by DTI. Just last month, online sellers were required to register with the Bureau of Internal Revenue and settle their taxes.

One user pointed out that barter, contrary to what trade secretary Lopez said, is legal and even recognized by the Civil Code under Title VII on Barter or Exchange. Under Article 1638, barter or exchange is when “one of the parties binds himself to give one thing in consideration of the other’s promise to give another thing.”

How DTI and BIR will regulate said online barter trade is yet to be clarified. Under existing BIR rules on value-added tax, tax can be levied on the “sale, barter, exchange or lease of goods or properties and services.”

Based on the executive order by Duterte on revitalizing Mindanao barter, one of the tasks of DTI along with other concerned agencies like the Mindanao Development Authority, Bureau of Customs and Department of Finance is to facilitate the registration and accreditation of qualified traders. Identifying allowable goods and its valuation was also supposed to be covered by said rules along with crafting measures to prevent smuggling and circumvention of customs laws. 

In the meantime, members of these trading communities put deals to a halt or as one page administrator of a Facebook group based in Iloilo did, announce an online community lockdown.

 

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TAGS: bacolod barter community barter barter trade BIR civil code DTI exchange Facebook illegal tax