BOC modernization project temporarily suspended

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Image by Gerd Altmann from Pixabay
  • The World Bank-initiated Philippine Customs Modernization Project is temporarily suspended and under evaluation
  • A legal case prevents the Bureau of Customs from pursuing a core component of the project
  • The case prohibits BOC from pursuing any modification in its current system, such as the Customs Processing System, a key part of the modernization project
  • BOC assistant commissioner Vincent Philip Maronilla said the bureau may just re-engage with the WB when BOC is legally able to do so

The World Bank (WB)-initiated Philippine Customs Modernization Project (PCMP) is temporarily suspended due to a legal case that prevents the Bureau of Customs (BOC) from pursuing a core component of the project.

“We’re suspending the entire PCMP pending evaluation… (we are looking at) if we would still pursue it even with a legal case filed against us because if there would be no CPS (customs processing system), then any efforts to further any components under the PCMP would not be beneficial to the Philippine government and the Bureau of Customs specifically,” BOC assistant commissioner Vincent Philip Maronilla said in a media interview at the sidelines of BOC’s 122nd founding anniversary celebration on February 13.

Maronilla explained the case filed against the BOC prohibits it from pursuing any modification or change in its current electronic system, such as the CPS, a key component of the PCMP.

WB country director Ndiamé Diop during the launch of PCMP in 2021 said the CPS will streamline and rationalize processes and procedures and “will be a very significant upgrade from the current Electronic-to-Mobile System launched in 2005.”

The CPS will also improve adherence to international standards and conventions on customs processing, provide an audit trail for transactions, and allow for greater transparency and less opportunity for corruption.

Without the CPS, BOC authorities agreed it would be best to temporarily suspend the PCMP “and then just re-engage with World Bank when we’re able to do so legally,” Maronilla said.

He said the bureau has looked into all other legal options to pursue the project even while the case is pending, “and yet we’re still in a bind.”

“So, I think the best way to move forward is to take a step back and re-engage when we’re ready to do so,” Maronilla noted.

“I don’t think it’s fair and I don’t think it’s right that we’re borrowing money and we’re paying for something where the important component that we really needed is not there,” he added.

As for the pending case, Maronilla said it is now with the Supreme Court and once a decision is made, “then there’s more clarity on how to move forward with the modernization project.”

While the fate of the PCMP is being evaluated, Maronilla said the BOC continues to digitalize its processes but noted that the “problem” is integration of all its different systems.

BOC has to date digitalized 161 out of 166 customs processes, or a 96.99% digitalization rate.

PCMP is expected to improve the country’s customs administration through streamlining, automation, and development of a world-class CPS.

The WB’s Executive Board approved the loan for the project last October 2020. The project was first introduced by the Washington-based lender in 2017, and was approved by the National Economic and Development Authority Investment Coordination Committee-Cabinet Committee on March 6, 2020.

It was officially launched in March 2021.

The project has a total cost of $104.38 million, of which $88.28 million will be funded through WB’s official development assistance, and the balance shouldered by the Philippine government.

The BOC, supervised by the Department of Finance, will be the implementing agency, responsible for project execution and for ensuring project development objectives are met.

Last November, the BOC awarded the contract for the Project Supervision and Quality Assurance (PSQA) Services—which will assist in all aspects of the execution and implementation of the PCMP—to the joint venture of Quality Institute, Emerging Markets International, and GT Capital. The PSQA is a critical first procurement that will jumpstart the implementation of the PCMP, including other key procurements.

READ: WB chooses consultants for Customs modernization project

With the PCMP suspended, it seems likely that the work on the PSQA is also on hold. – Roumina Pablo