Cleansing and upgrading Customs

In every discussion on corruption, two revenue-generating government agencies easily come into the picture — the Bureaus of Internal Revenue (BIR) and of Customs (BOC). What’s sad is that everyone knows how corruption is happening in these offices, including all the dirty details, and yet no one seems to care or do anything to stop it.

One solution proposed as early as the time of President Fidel V. Ramos was to computerize as much of the processes at the BIR and BOC as possible. By reducing contact between revenue personnel and the persons being taxed, the less susceptible they are to corruption. But somehow, talks about automation were easily forgotten, and the modernization plans got shelved.

Lately, however, things seem to be moving at a faster pace forward at the BOC. Since President Duterte took office in 2016, he had been very vocal about uncontrolled corruption in the government, especially at the BIR and the BOC. Is he finally doing something concrete about it?

There appears to be every reason to be optimistic, now that the BOC has adopted a World Bank-proposed system aimed at modernizing processes at the country’s second biggest tax-collection agency, through funding from the Washington-based lender. The BOC is finally shifting to a fully automated customs processing system.

Customs Commissioner Rey Leonardo B. Guerrero explained that the $150-million project will support the BOC in reforming and upgrading its systems, procedures and operational activities to improve transparency, accountability and predictability. The goal is to end up with streamlined and harmonized business processes in line with accepted international standards.

In other words, the World Bank loan for the Philippine Customs Modernization Project seeks to transform the bureau into a world-class agency through information communications technology.

The end result is compliance with the ease-of-doing-business provision in the law on paperless transactions, and the eradication of face-to-face contact between BOC personnel and importers and brokers.

The World Bank noted that this will benefit traders from the provinces as well, who will be able to deal with the BOC without having to complete their transactions in Manila.

This change will, hopefully, increase the Philippines’ trade competitiveness, facilitating the growth and diversification of exports, according to the World Bank.

Earlier, the BOC launched an online platform also designed to enhance revenue collection and prevent technical smuggling by ensuring the correct valuation of imports entering the country’s ports.

The agency announced that it piloted on April 8 in all ports nationwide the web-based National Value Verification System, which will determine and verify the accurate value of a commodity. It will allow assessment officers to verify
if an importer declared a value similar to the price it actually paid for the products when exported to the Philippines.

The BOC has already experienced the positive impact of computerization. Last year, it pilot-tested the implementation of 1-Assessment, a pioneering web-based system that removed official discretion, eliminated the suki system (BOC personnel favoring selected brokers) and enforced accountability among brokers by tracking and making all interactions subject to audit.

Since 1-Assessment was piloted in the ports of Batangas, Subic, Clark, Surigao, and Limay in November last year, the BOC has reported zero backlog despite the arrival of a big volume of shipments for the Christmas holidays.

In stakeholder consultations, the BOC said it also received good feedback from satisfied importers and brokers who did not have to go to the ports because they could monitor their entries digitally.

There is reason to be upbeat with the current efforts for the full automation of the entire customs process. This is not just partial computerization as had been done before, which still gave corrupt personnel ingenious opportunities to continue their wrongdoing.

Once proven successful, the government should replicate the BOC experience in other agencies that rank high in corruption surveys.