There were 1,199 boats involved in the barter trade visiting Sandakan from the Southern Philippines in 2015.

The figure is based on the number of boats registered and conducting business at the jetty of the Department of Port and Pier, Sandakan branch, in Jalan Sim-Sim here.

The department's Sandakan branch officer, Shahrilnizam Aliakbar said the boats were levied RM68 for each trip and only allowed a stay of seven days from the date of approval.

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"Only eight persons are allowed on board and they cannot be in the vicinity of Sandakan town as the local agent will send the supply of goods to the port," he said.

He said the crew of the boats entering Sandakan waters undergo a verification of documents and this is done at sea by the Maritime Malaysia Enforcement Agency and the Maritime Police.

When docking in waters in the district, their documents are further examined by the Immigration Department at the jetty of the Department of Port and Pier, while goods being exported have to be checked by the Royal Malaysian Customs Department.

"The barter trade in the district contributes RM2 million monthly to the state coffers, with RM1 million being from the sale of cigarettes and the rest from essential goods," Shahrilnizam told Bernama here.

He said the barter trade involved mostly items as cooking oil, noodles, flour, biscuits, keropok (crackers) and rice from Vietnam.

"Controlled goods such as local rice and sugar are not allowed to be traded under the barter system.

"The Sandakan port jetty and harbour is the main centre of barter trade activity in the district, including the loading of goods," he said.

Shahrilnizam said the local agents in the district supplied goods to the boats through arrangements with their business partners in the Southern Philippines.

He added that trade through the barter system contributed to the economy of the district as well as supply of goods.

Meanwhile, an agent supplying goods here, Muhammad Sham Konel,40, said Sandakan's close proximity to the southern Philippines compared to Manila, saw traders from there choosing the town to make trade purchases.

"The monthly profit to be reaped can reach up to RM10,000 depending on the weather and sea conditions," he added.

Muhammad Sham, who has been an agent since 2012 said the licence for the barter trade – renewable annually – can be obtained from the Sandakan Municipal Council, which is then processed by the Finance Ministry.

"The goods obtained in Sandakan through the barter trade system is important for people living on the islands in the waters of the southern Philippines, among them, Jolo, Tawi-Tawi, Sitangkai and Bongao.