Over the next 14 months, the Philippine Bureau of Customs will implement a long, ambitious lineup of changes, including pre-shipment inspection for all formal entry cargoes, whether containerized or bulk by middle of the year, and full process automation by July 2015.
In a stakeholders’ meeting last week, Customs Commissioner John Phillip Sevilla said he is pushing automation to make everyone’s job easier and for greater transparency, because “once you are able to capture things digitally, it is a lot harder to hide misbehavior.”
Right now, he noted, the agency generates eight cubic meters of paper every single day.
Sevilla said automation will, among others, eliminate examiners’ need for discretion, in that they won’t have to decide on surcharges in cases of misdeclaration and underdeclaration.
By December this year, the bureau is eyeing a fully electronic submission, processing and storage of formal entries and an enhanced and up-and-running National Single Window.
By June 2015, the targets are:
- A full electronic submission, processing and storage system for all entries (informal, export, transshipment documents, and customs bonded warehouse (CBW) transactions and documents, including bonds);
- A single, centralized assessment service;
- A single, centralized valuation reference database, which will be publicly accessible and updated at least every quarter;
- Sale or other disposition of abandoned, seized and forfeited goods within two months of resolution of legal proceedings.
- Fully electronic record keeping for CBWs with real-time access to information about entries, exports, withdrawals and inventories;
- Vessel tracking system extended to all ports and sub-ports;
- Revised operating manual; and
- Key performance indicators to be defined and met for processing time and clearance after full submission of documents; examination of alerted shipments; resolution of valuation disputes; and resolution of seizure cases.
“In the short term, we’re going to start discussions with PEZA (Philippine Economic Zone Authority) to see whether they could just send us a copy of their documents digitally so importers don’t need to file to us anymore,” Sevilla said.
By June this year, the agency also intends to require pre-shipment inspection for all formal entry cargoes, whether containerized or bulk.
Recently, the BOC drafted a customs administrative order requiring a load port survey (LPS) for both containerized and non-containerized import cargoes. Currently, only bulk and breakbulk shipments are required to undergo an LPS.
Additional computers, higher pay
In order to fully automate processes, the BOC will have to beef up its computing power. The agency currently has 3,600 employees and only 994 computers, not all of which work, the commissioner pointed out.
And this is amid an environment where the agency processes 3,300 entries per day and about 4,500 containers arrive in the country every single day.
An earlier document provided by BOC to PortCalls said the agency is at the preparatory stage for some projects. One is the request for additional budget from the Department of Budget and Management for computers, personnel, maintenance and other operating expenses and capital outlay, and examination costs.
The BOC is in particular looking at a salary adjustment for its employees and budget for overtime work.
To illustrate the low salary structure at the agency, Sevilla said the collector at Manila International Container Port — which handles about 40% of the Philippines’ total trade, receives a gross monthly salary of P58,000 — while each of the agency’s six deputy commissioners receive only P68,000.
“I really believe that the salaries paid to customs employees stink,” Sevilla said, adding that the salary grade 11 of the BOC is lower than in other government agencies.
Centralized valuation database
The commissioner, meanwhile, recognized that BOC has “no single organized reliable database” for tariff headings.
“We do not have any reliable analytical capability that would not only analyze valuation terms but even the growth of our revenues,” he said.
“There is no such analytical capability in the Bureau of Customs today. We cannot tell you why collections are going this way or that; we can tell how much we’re collecting but we cannot link that to underlying trends in the economy.”
The target is that by June 2015, there will be a single, centralized assessment service; and a single, centralized valuation reference database, which will be publicly accessible and updated at least every quarter.
Alert orders
Sevilla also defended the issuance of an increasing number of alert orders, noting that for every 100 orders issued since the new BOC team came into office late last year, only 18 came up “clean”.
With “82% of every alert order, there’s something wrong,” he said, adding that an additional P194,000 in taxes is derived from the alerted shipments, or P86,500 per container.
“From my point of view, we need to be doing more (alert orders), not less,” he concluded.
By June, online public disclosures will be made available. These would include announcements of public auctions, weekly alert orders, and monthly disclosure of the outcome of alert orders (with names of consignees and brokers for those with negative findings) and seizure cases; and shipments that have not yet been filed for entry or filed but still not cleared.
As for revenue collection, Sevilla noted a 25.5% surge in take for the first quarter of the year.
He does not think “25.5% is sustainable in the near term. Our average trend growth will probably be only in the low 20s.”
Sevilla described the revenue figures as “encouraging” but acknowledged that the BOC is “very, very far from where we want to be.”
He concluded, “There’s no guarantee of success for us. It’s something that we work on every single day. Assuming we succeed in implementing these process changes, there is no guarantee that these will stay forever. But I think the ultimate thing that would make it difficult to go back to the bad habits is we have a system we will be leaving behind.” –– Text and photo by Roumina M. Pablo
