Level of Understanding of the BSCA students on the

Paperless Transaction of the Bureau of Customs:

An Assessment

Presents this to the Faculty of the College of Customs

Administration

In Partial Fulfilment of the degree of Bachelor of Science

in Customs Administration

Cortez, Chenee Anne D.

Dulnuan, Venus E.

Jallorina, Jenny Aya R.

Medios, Reyson B.

Salvador, Sean Christian R.

Senense, Oliver Mar A.

Tapaoan, Princess Melian U.

March 2017

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 Chapter I

Problem and Its Background

Introduction

The implementation of Information and Communication

Technology is a huge step towards the development of a

country. When it comes to the Bureau of Customs, which is

considered as one of the most corrupt agency in the

Philippines, the bad image embodied to the bureau is very

much hard to change. Issues that surrounds the bureau become

the cognitive factor in the formulation of its vision in

terms of rejuvenating its image. Taking the large part of

this scale is the acceptance of innovation in transaction

procedures and processes, which is the enforcement of

Information and Communication Technology to cope up with the

international standard.

Why is there a need to adopt Paperless Transaction? It is

by common knowledge that unscrupulous transactions are

prevalent in the government revenue collection, in order to

curb the systematic anomalies, paperless transaction was

given a highlight in the recent customs border protection.

In line with the advancement of technology, Philippines

shall take into this account the diverse legal and

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regulatory frameworks under APEC Paperless Trading

Individual Action Plan, wherein member economies should

endeavour to reduce/eliminate the requirement for paper

documents for customs border trade administration, possible

by 2005 for developed countries, and 2010 for developing

countries or as soon as possible thereafter. By recognizing

paperless trading, cost reduction will result to business

opportunity expansions in global commerce. BOCs

implementation of electronic transaction benefits the trade

individuality to uphold the five principles of progressive

clearance procedure: selectivity, post audit, advance

processing, client self-assessment, and electronic data

interchange.

Recognizing paperless transactions ability to contribute

towards Philippine economic development and efficiency,

Related thereto is the enactment of Electronic Commerce Law

(RA 8792, electronic commerce act of 2000). This defines the

Philippine government compliance to be a model of electronic

commerce in delivery of core public service. This supported

the local issuance CMO 27-2009 in the electronic-to-mobile

that does a lot of contribution for good governance.

Transparency was determined wherein it provide face to face

transaction between BOC and stakeholders. This encouraged

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more users as it provide one stop/window processing that is

dynamic end to end clearance through the use of internet or

electronic interchange connectivity. Thus, more

comprehensive management and state of art services are well

executed in carrying out BOC functions under the law.

As time goes by, the information technology develops

progressively. This requires the nation also to move forward

in order to improve their laws, governing electronic

commerce. The need for faster transactions and

communications is becoming dominant in the various sectors

of the society. An electronic workflow can help reduce the

burden or barriers of an organization imposed by long

distances. Modern technology is finally allowing us to

electronically operate via email and to move documents

around the world as electronic files.

A paperless transaction in its purest sense means non usage

of a piece of paper. This is accomplished through the

automatic generation of electronic documentation.

The Bureau of Customs is moving toward a more paperless

environment discarding the use of few forms to help minimize

cost in the clearance of some imported items.

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Customs Memorandum Order No. 29-2015 dated, September 01 and

signed by Customs Commissioner Alberto Lina, promotes

universal use of paperless transactions with the Bureau of

Customs and eliminate unnecessary use of papers and

expensive forms.

According to Section 109 of the CMTA, the Bureau will

utilize Information and Communication Technology (ICT) and

other modern techniques in the processing of export

transactions, issuance of proof of origin towards trade

facilitation and establish a comprehensive reporting and

monitoring system for all export transactions.

Much more with the beauty and benefits of this Act, this is

a challenge for the Bureau considering that we are in the

midst of the transition period and it takes time for us to

cope up.

The future Customs Brokers will rely purely on this Act for

it will serve as the guiding principle as they engage

themselves in the corporate world. How knowledgeable and

ready they are?

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Conceptual Framework

The study used descriptive-survey design as a method in

gathering of data. Hence, it has utilized the input-process-

output paradigm of which specific variables of the study

were used to yield and assess the understanding of the BSCA

students regarding the paperless transaction of the BOC.

INPUT PROCESS OUTPUT

Profile of Assessment Assessed

parameters understanding
the
of BSCA
respondents -Distribution students
of survey towards BOCs
-Age Bracket
questionnaires computerizati
-Name on program
-Tabulation
(optional) of the data
collected
Survey
Questionnaire

Figure I. The figure above signifies the Input which is the

demographic profile of the respondents, the Process for the

gathering of data, and the Output, upon the completion of

this research. Dissemination

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Statement of the Problem:

This study aims to assess the understanding of BSCA students

on the BOC paperless transaction.

Specifically, the researchers seek to answer to the

following questions:

1. What is the profile of the respondent in terms of?

1.1 Age

1.2 Gender

2. What is the level of understanding of the BSCA students

on the computerization program of the Bureau of Customs?

3. Is there a significant difference in the level of

understanding of the BSCA students on the components of

paperless transaction such as:

3.1. Client Profile Registration System (CPRS)

3.2. Electronic Manifest System (EMS)

3.3. Formal Entry System (FES)

3.4. Warehousing Entry System (WES)

3.5. Payment Abstract Secure System version 5.0(PASS5)

3.6. On-Line Release System (OLRS)

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 3.7. License and Clearance System (LCS)

4. Is there a significant difference on the level of

understanding of the respondents when they are grouped

according to their demographic profile?

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Significance of the Study

This study will assess the understanding of the future

customs brokers regarding to the paperless transaction,

which will be the mode of transaction that they are going to

use in practicing their profession. They will be engaged

mostly in electronic transaction rather than manual

processes and procedures. This study will serve as a guide

to the following:

A. BSCA Students: Upon completion of this research,

students can assess themselves on how

knowledgeable they are and will help them to further

understand the said topic.

B. BSCA Instructors: The result of this study can

serve as a guiding tool of the instructors on the

performance of the students in understanding the issue

so that they will know if they are going to give more

time in explaining the topic.

C. Future Researchers: The result of this study will

serve as their reference pertaining to the issue

and can help them achieve an accurate research.

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Scope and Delimitations

The study covers the understanding of the BSCA students of

International School of Asia and the Pacific (ISAP) about

the newly implemented BOCs paperless transaction in line

with their future functions. The respondents are BSCA

students of ISAP from the different year levels.

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Definition of Terms

Agreement: a situation in which people agreed or have the

same opinion or ideas

Anomalies: something that is unusual and cannot be easily

classified

Bureau of Customs: a government agency tasked to collect

lawful revenue of import and export

Cargo Manifest: a document that contains the complete list

of cargo on board the vessel

Centralized: to bring things in one single point or place

Computerization: to control, perform, process document by

means of electronic computer

Comprehensive: covering completely or broadly

Consignment: the importer sells the goods for commission and

remits the net proceeds to the exporter

Curb: to put under control to limit something

Corruption: it is unlawful act of a powerful person such as

government officials, taking away governments revenue

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Customs Broker: the person that act as an agent for an

importer or exporter that processes and submits all document

for clearing of goods through customs

Customs Commissioner: the chief operating officer of customs

Customs Control: measures applied to ensure compliance with

customs laws and regulations

Customs Facilities: it is a place/property where customs

procedures were done

Declaration: a statement made by a broker or importer on the

nature of imported goods, their quantity value, weight and

the like for the purpose of paying duties and taxes

Documentation: the act or instance of furnishing or

authenticating with documents to utilize or arrange for a

deliberate purpose

Endeavour: a serious effort in fulfilling something

Entry: the entry document, together with other import papers

shall have been filed and processed with customs

Elimination: to put an end or to remove something that is no

longer needed or wanted

Foreign Trade: a trade transaction between countries

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Minimize: to reduce; e.g. reducing the use of manual

processes

Modernization: act of making or using things into their

modern on newest form

Paperless Transaction: reducing the use of papers in

transacting with the BOC, attaining paperless environment

Perception: the act or way of perceiving or understanding

situations

Prevalent: commonly accepted/use in a wide area

Reform: the way of changing conditions into something that

is better than the other

Rejuvenating: restoring or rebuilding the image of the BOC

Respondents: a person who gives response or answer to a

question, especially in a survey

Revenue: a money that is collected by the government for

public purposes

Revise: to make an amendments to the existing law or rule

Significant: the importance of a particular thing

Smuggling: unlawful act of importing or exporting goods

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Supervision: the act of supervising or directing activities

to ensure that things are done accordingly

Trade: the activity or process of selling, buying or

exchanging goods or services

Transition: a change, movement or development of something

from one state into another

Technology: a machine or a piece of equipment that is

created to simplify tasks

Understanding: knowledge on something; opinion or judgment

Unscrupulous: illegal actions taken by certain person

Vis-a-Vis: a french word which means face-to-face

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ABBREVIATIONS

APEC: Asia-Pacific Economic Cooperation

ASYCUDA: Automated System for Customs Data

BOC: Bureau of Customs

CMO: Customs Memorandum Order

CMTA: Customs Modernization and Tariff Act

CPRS: Client Profile Registration System

e2m: Electronics to Mobile System

eAWB: Electronic Airway Bill

EMS: Electronic Manifest System

EU: European Union

FES: Formal Entry System

ICT: Information and Communication Technology

IEIRD: Import Entry and Internal Revenue Declaration

IRR: Implementing Rules and Regulations

ISP: Internet Service Provider

LCS: License and Clearance System

MICP: Manila International Container Port

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MISTG: Management Information System and Technology Group

MOA: Memorandum of Agreement

NCC: National Computer Center

OLRS: On-Line Release System

PASS5: Payment Abstract Secure System version 5.0

RKC: Revised Kyoto Convention

RTA: Regional Trade Agreement

SAD: Single Administrative Document

TCCP: Tariff and Customs Code of the Philippines

UNCTAD: United Nations Conference on Trade and Development

VASP: Value-Added Service Provider

WES: Warehousing Entry System

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 CHAPTER II

REVIEW OF RELATED LITERATURE AND STUDIES

This chapter presents the related literature and studies

after the thorough and in-depth search done by the

researchers. This will also present the synthesis of the

art, conceptual framework to fully understand the research

to be done and lastly the definition of terms for better

comprehension of the study.

Related Studies

R.A 1937, otherwise known as the Tariff and Customs Code of

the Philippines, was the first codified Tariff and Customs

Laws implemented in the country way back 1957, it was

superseded by Presidential Decree No. 34 and was re-codified

by Presidential Decree No. 1464, otherwise known as the

Tariff and Customs Code of the Philippines of 1978, which

was used for about 38 years, whereas, some provisions of the

recent law were already obsolete due to the issuances of

amendatory laws, decrees and executive orders which made the

provisions impractical in application.

In line with the vision of the Bureau of Customs with

regards to the harmonization, proper guidance of the public

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and efficient administration, R.A 10863 or the Customs

Modernization and Tariff Act was signed into law by former

President Benigno C. Aquino III. CMTA took effect on June

16, 2016 prior to 15 days from its official publicity on

June 01, 2016.

This act serves as a tool for the transformation of the

Bureau to become modern and efficient organization following

the International Standards and best practices in modern

customs management and operations. Aligned with the Revised

Kyoto Convention (RKC) or the convention on the

Simplification and Harmonization of Customs Procedure, the

Philippines, with the use of CMTA, is looking forward to

meet the international standard in order for us to actively

participate in the expanded trade activities.

In accordance with the vision of the Bureau of Customs

regarding the implementation of Information and

Communication Technology, the newly signed Customs

Modernization and Tariff Act (R.A. 10863) will serve as an

instrument to attain a paperless environment that will

combat different burdens carried by the bureau.

Part of the upgrading process is the implementation of full

electronic processing of all documents that will benefit the

bureau and other entities engaged.

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According to Luc De Wulf and Jose B. Sokol of the Customs

Modernization Handbook, they sited different benefits of the

ICT if it will be applied in the bureau.

-enhance customs control over international consignment

-improved control of exemptions, concessions and duty

suspension regimes

-reduced cargo clearance times for the discharge of customs

facilities

-closes cooperation and rationalization of activities with

other border control agencies

-uniform application of customs and other border-related

legislation

-increase transparency and predictability for the business

sector

-reduced opportunity for inappropriate exercise of officer

discretion

-enhanced management information

-more efficient revenue collection and accounting

-more accurate and timely trade statistics

-more effective deployment of human and technical services

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-more accurate information for risk management and fast

clearance audit purposes

Executive Order No. 463 which created the MANAGEMENT

INFORMATION SYSTEM AND TECHNOLOGY GROUP (MISTG) provides

solution for the realization of Information and

Communication Technology in the BOC for more accurate

transactions and lesser burden to the parties involved. This

is the first step in attaining the Paperless Transaction

which the Bureau is aiming for the past years.

As per Sec. 109 of CMTA Application of information

communication technology states that In accordance with

international standards, the bureau shall utilize

information and communications technology to enhance customs

control and to support a cost-effective and efficient

customs operations geared towards a paperless customs

environment. These specific provisions upon the submission

of the Implementing Rules and Regulations will serve as a

guide in the realization of paperless environment supported

by Customs Memorandum Order. NO. 29-2015 REVISED PROCEDURES

AND DOCUMENTATION IN THE PROCESSING FORMAL CONSUMPTION

ENTRIES. One of the objectives of this issue, under Sub-

section B of Section 1 of the said memorandum states that

To promote the universal use of paperless transactions with

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the Bureau of Customs (BOC) and eliminate unnecessary use of

papers and expensive forms;

As one of the benefits of this project, with this kind of

transaction, corruption may be lessen, thus, the generation

of the governments revenue will be guarded. According to

Horacio Suansing, the computerization of their transactions

has lessened the interaction between clients and BOC

officials and has resulted in lesser opportunities for

corruption.

The changes, according to Suansing, has improved the image

of the BOC resulting in the lower rank they received in the

Pulse Asia Survey on the "most corrupt government agencies"

from last year's rank 5 to rank 7.

It was strongly supported by the findings of the De La Salle

University in their research entitled THE PRESENT

COMPUTERIZATION PROGRAM OF THE BUREAU OF CUSTOMS: FOCUS ON

IMPORT AND EXPORT TRANSACTIONS, transaction consisting of

fraud can be reduced because of the elimination of the face-

to-face transaction which is more prone to any fraudulent

intent. According to DLSUs research, The respondents found

that cashless payments, reduced processing time and

elimination of face to face transaction lessen fraud

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commitment. Simpler and transparent procedure, 24/7 customs

process, and fast release of cargo were all the benefits

brought by computerization of the BOC.

But considering the fact that we are in the middle of the

said transition period wherein we cannot easily achieve a

paperless environment, we cannot deny the fact that there

are some irregularities with regards to the use of

technology in transactions because manual procedures and

processes, and face-to-face transaction was used for a long

period of time. However, the respondents found that the

computerized import/export documentation was not fully

effective ----DLSU.

As of today, Automated System for Customs Data (ASYCUDA) is

the basis of customs modernization in many countries all

over the world. ASYCUDAWorld is the latest result of a

process that began when UNCTAD identified the first signs of

the commercial potential of the World Wide Web. UNCTADs

Trade Efficiency Summit (Columbus, Ohio, 1994) looked at how

to reduce transaction costs by applying information

technologies to every link of the trade transaction chain.

That objective is now being pursued by the Brussels-based

World Customs Organization, which is developing a global,

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harmonized standard data set that uses uniform electronic

messages. The UNCTAD ASYCUDA Program has become the leading

media of Customs modernization worldwide. The ASYCUDA

software is today the core component of comprehensive,

Integrated Customs Information Systems in more than 80

countries. This program is used by different country like

Turkey which enables them to perform well and to meet the

international standard of customs. A case study of turkey

regarding implementation of different E-customs application

entitled COMPUTERIZATION OF FOREIGN TRADE TRANSACTIONS by

cDuzce University, In the last decade, Turkish Customs has

introduced various e-customs applications as a key component

of customs modernization program. One of the main objectives

of these applications was to simplify and speed up the

foreign trade transactions. The aim of this study is to

assess the current situation about the success of these

applications at national level and identify the factors that

may influence on the use of e-customs applications.

Identifying the factors that hamper the deployment of e-

customs applications may lead to more successful

implementation of computerization of foreign trade

transactions at national level.

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 Chapter III

Research Methodology and Procedures

This chapter provides the research design, respondents of

the study, data collection instrument, method procedure,

statistical treatment and ethical considerations that will

be used by the researchers in the conducting of the study.

Research Design

The researchers will use a descriptive research methodology

and designed questionnaires survey instrument to assess the

understanding of the BS Customs Administration students from

second year to fourth year level who are enrolled at

International School of Asia and the Pacific, regarding the

BOCs paperless transaction.

Respondents of the study

The respondents that will be involved are the students of

Bachelor of Science in Customs Administration from all year

level of International School of Asia and the Pacific.

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Sampling technique

Data Collection Instrument

A questionnaire was chosen as data collection instrument. A

questionnaire is a printed self-reported form designed to

elicit information that can be obtained through the written

responses of the subjects. The information that will be

obtained through questionnaire is similar to that obtained

by an interview, but the questions tend to have less depth.

(Burns & Grove 1993:368)

Data will be collected with the aid of questionnaires to

assess the understanding of the BSCA students on the BOCs

paperless transaction.

Data Collection Procedure

Questionnaires will be personally distributed by the

researchers to the BS Customs Administration students. The

survey was created using suitable questions modified from

related research formed by the researchers. In the

questionnaire, Likert scale was used to determine on how the

students assess their knowledge on the paperless transaction

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of the BOC. Upon validation of the questionnaire, this will

be distributed to the 2nd year to 4th year students of ISAP.

The researchers will assure confidentiality of their survey

sheets since the identities will not affect the

interpretation of data. In line with this, the researchers

will give the students the option of being anonymous.

Participants will be given a time to respond to the

questions.

STATISTICAL TREATMENT

The researchers will use the percentage (%) for the profile

of the respondents all BSCA students enrolled in ISAP

The formula is:

Percent= (f/n) 100

Where:

F= frequency

N= total number of participants

100=constant

The weighted mean will be employed from the general data

concerning the level of understanding of the BSCA students

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on the paperless transaction and the level of their

awareness on the components of the paperless transaction.

The formula is:

X= fX

N
Where:

X= weighted mean

fX= sum of the product of the weighted frequencies

f= sum of the frequencies of number of respondents

N= population

= summation

The measurement for the weighted mean use the likert-type

scale with verbal interpretation.

Very familiar= 5

Familiar= 3

Slightly familiar= 1

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ETHICAL CONSIDERATIONS

The conducting of research requires not only expertise and

diligence, but also honesty and integrity. This is done to

recognize and protect the rights of human subjects. To

render the study ethical, the rights to self-determination,

anonymity, confidentiality and informed consent were

observed.

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