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The Philippines has made “significant progress” in applying trade facilitation and paperless trade despite the pandemic, according to a UNESCAP report
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Still, more needs to be done to improve trade efficiency, according to the report which assessed the Philippines’ readiness for cross-border paperless trade
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It found the adoption of cross-border paperless trade measures remains “uneven” among agencies and stakeholders
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Accelerating digitalization of trade procedures could reduce trade costs and improve competitiveness
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Integration of trade regulatory government agencies into TradeNet, the Port Community and other paperless trade systems interoperable within and across borders would improve domestic paperless trade environment and its readiness to participate in cross-border paperless trade
The Philippines has shown “strong political will” and made “significant progress in implementing trade facilitation” and paperless trade despite the pandemic, the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) said in a just-released report.
However, “more remains to be done to further enhance trade efficiency, particularly by adopting digitalization of trade procedures across all agencies,” the report entitled “Readiness Assessment for Cross-Border Paperless Trade: The Philippines” said.
The country’s trade facilitation implementation level is significantly above the Asia-Pacific regional average and Southeast Asia subregional averages, the report noted, but it also found execution of cross-border paperless trade remains “uneven” among agencies and stakeholders.
Still “the progress is trending in the right direction.”
The successful implementation of cross-border paperless trade comes with significant benefits, the report pointed out, having the potential to slash trade costs by 13% across Asia and increase regulatory compliance, reduce illicit financial flows, and facilitate engagement in an increasingly digital global economy.
Co-published with the Philippine Bureau of Customs (BOC), the report looked into the country’s readiness for cross-border paperless trade, i.e. conducting international trade based on electronic data and documents, among others.
It also put forward recommendations to advance implementation of cross-border paperless trade measures.
It examined trade facilitation measures adopted during the pandemic, noting that “paperless trade was recognized as an effective way to mitigate trade disruptions during the COVID-19 crisis, providing more seamless and resilient trade opportunities.” As a result, the customs bureau and other agencies sped up efforts to enable paperless trade, in the process improving ICT infrastructure.
The Philippines had a very high rate of 94.1% in implementing the World Trade Organization Trade Facilitation Agreement, and scored 86.02% in the 2021 UN Global Survey on Digital and Sustainable Trade Facilitation, higher than the Southeast Asia average of 74.29%, the UNESCAP report noted.
Still, the Philippines’ cross-border paperless trade measures have low implementation rates and the country is still working on achieving full implementation of its cross-border trade measures, the report said.
The Philippines has executed several paperless trade systems with BOC as the focal agency for cross-border trade. These include the Electronic-to-Mobile (e2m) System, Philippine National Single Window (NSW), TradeNet, and the World Bank-funded Philippine Customs Modernization Program as some of the agency’s projects for paperless trade systems.
Implementation of the NSW and TradeNet, which was developed to become the new NSW, is expected to further advance paperless trade systems in the Philippines.
Several other government agencies have also established their own systems to facilitate information processing in completing trade transactions.
The Philippine Ports Authority’s automation projects include the Electronic Accreditation System, Electronic Permit Management System, and Internet-based Port Operations and Receipting for Terminals System.
The Maritime Industry Authority is working on its Integrated Domestic Shipping Information System while the Civil Aviation Authority of the Philippines maintains electronic systems that are limited to air navigation and air traffic systems and equipment.
To improve its domestic paperless trade environment and its readiness to participate in cross-border paperless trade, the report said the Philippines should complete integration of trade regulatory government agencies into TradeNet, the Port Community and other paperless trade systems that are interoperable within and across borders.
This would involve the Philippines enhancing its national technical capacity in this area, designing a long-term plan and continuing the exchange of selected data and documents.
From the technical readiness assessment, the report recommends continuing trade-related electronic systems and other trade information technology projects; and upgrading the NSW to handle all types of documents in cross-border trade.
It suggests implementing the National Government Data Center Project, the National Government Portal, and the Integrated Business Permits and Licensing System, among other projects. Other recommendations include:
- Adherence to the National ICT Ecosystem Framework (NICTEF)
- Implementation of the e-Government Master Plan 2022
- Conducting the annual Vulnerability Assessment and Penetration Test and ensuring stability of BOC’s Electronic-to-Mobile (e2m) System
- Aligning the development and implementation of cross-border paperless trade with the NICTEF
- Strict implementation of Republic Act 11032 or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018
- Data harmonization according to available international standards such as the UN rules for Electronic Data Interchange for Administration, Commerce and Transport and World Customs Organization
- Greater focus on capacity-building and budgetary support
- Full implementation of BOC’s Authorized Economic Operator Program
From a legal point of view, the report said the Philippines has the Electronic Commerce Act of 2000 (ECA) —modelled after the UN Commission on International Trade Law (UNCITRAL) Model Law on Electronic Commerce—provides legal recognition under Philippine law of paperless transactions, whether between domestic parties or involving cross-border transactions.
The report however, pointed to a “glaring issue” in the definition of “electronic data message”: While Congress adopted the UNCITRAL definition of “data message”, it deleted the phrase “including, but not limited to, electronic data interchange (EDI), electronic mail, telegram, telex or telecopy.”
The Philippine Supreme Court said the deletion of the phrase “assumed a different context than that of the UNCITRAL’s terminology”, thus ultimately ruling that facsimile transmissions are not considered “electronic data messages”.
Among the remaining legal impediments to implementing full paperless trade, the report said, is the lack of rules involving electronic notarization systems and the treatment of authenticated electronic signatures or digital signatures as “disputable presumptions” subject to rebuttal by a party disputing their authenticity.
Recommendations from the legal readiness assessment include these three key areas:
- Legislative amendments to the ECA to ease requirements for the recognition of electronic and digital signatures, facilitate electronic notarization and expressly recognize contracts formed by automated message systems as recognized under the UN Convention on the Use of Electronic Communications in International Contracts (Electronic Communications Convention)
- Accession to the Electronic Communications Convention to govern the legal recognition of cross-border electronic transactions, while domestic law will continue to govern domestic transactions
- Enactment of a law related to the management of the NSW, and the rights and obligations attached to the use of the said system
The UNESCAP report aims to contribute to the government’s push to accelerate progress towards cross-border paperless trade as a party to the Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific (CPTA).
The Philippines in December 2019 acceded to the CPTA, which aims to promote cross-border paperless trade by enabling the exchange and mutual recognition of trade-related data and documents in electronic form and facilitating interoperability among national and sub-regional single windows and/or other paperless trade systems. – Roumina Pablo
