Loan negotiations between the Department of Finance (DOF) and the World Bank (WB) for the proposed P5.5-billion Bureau of Customs (BOC) modernization program will begin on May 12.
The Philippines Customs Modernization Project, which was first introduced by the Washington-based lender in 2017 and seeks to improve efficiency of Customs and reduce trade costs, was approved last March 6, 2020 by the National Economic and Development Authority (NEDA) Investment Coordination Committee Cabinet Committee.
NEDA earlier said P4.61 billion of the P5.5 billion total project cost will be funded through official development assistance.
READ: $97.8M BOC modernization program gets green light
Customs commissioner Rey Leonardo Guerrero has already signed the letter to the Department of Budget Management for issuance of the Forward Obligation Authority (FOA) for the project, BOC said in a statement. The FOA is a requirement for the loan negotiation.
Guerrero in January 2020 said BOC submitted last year the feasibility study for the modernization project, hoping the project would be approved in the first quarter of 2020 and implemented starting this year.
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BOC said it will issue a Customs Special Order creating a Project Management Unit tasked to oversee project implementation and ensure that objectives, along with the specifications and standards set are met during construction, deployment and implementation. A Special Bids and Awards Committee will also be constituted for procurement of the project’s different components.
According to the project’s Combined Project Information Documents/Integrated Safeguards Datasheet dated February 2020 available at the WB website, the “poor trade facilitation performance of the BOC is due to outdated infrastructure and inadequate business practices.”
It noted that the challenges faced by customs bureau include an outdated customs processing system; a lack of key capabilities needed for effective customs administration such as risk management, intelligence, valuation, and post clearance audit; inadequate access to and use of non-intrusive inspection technologies; a lack of performance monitoring and evaluation capabilities and inadequate operational statistics; a lack of proactive dialogue and effective coordination with stakeholders, including port operators, other border management agencies, and the private sector; and an operational environment in which almost all key customs activities are vulnerable to corruption.
The project involves three components, namely, modernization of customs operations, organizational development, and project management and implementation support.
The modernization of customs operations component aims to improve BOC’s core Customs Processing System (CPS), related technical infrastructure, and internal capacity to enable the operation of a sophisticated information and communications technology that will enhance BOC’s operational effectiveness, integrity, accountability, and organizational performance.
This component also involves enhancing fraud- and contraband-detection capabilities, eliminating waiting time for scanning, streamlining overall inspection processes, reducing time to release legitimate trade, modernizing BOC inspection processes, and improving trader perception of BOC business processes.
Meanwhile, the organizational development component will support BOC’s move toward modern customs administration by implementing, through the CPS, updated customs procedures that will create new responsibilities for and demands on BOC’s workforce.
The third component creates a Project Management and Quality Assurance consultancy that will be working with BOC in managing the project and providing quality assurance support during project implementation.
BOC, under the supervision of DOF, will be the implementing agency, primarily responsible for project execution and ensuring the project development objectives are met. BOC will have to establish a project implementation unit with the overall responsibility for project implementation. – Roumina Pablo
Image by Gerd Altmann from Pixabay
