Laguna Northwestern College

(Formerly Laguna Northwestern Institute)

56 A. Mabini, San Antonio, 4023 San Pedro, Laguna

An Analysis:
The Bureau of Customs Modernization Program

Karl Khizzle S. Obien

Methods of Research
Dr. Gumiran
March 26, 2022

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 Table of Contents

Page No.

Cover Page …………………………………………………………………. 1

Table of Contents …………………………………………………………. 2

Introduction …………………………………………………………………. 3

Bureau of Customs Modernization Program ………………………… 4

Objectives and Implementation…………………………………………. 5

Outcome and Results ………………………………………………… 6

References ………………………………………………………………… 8

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Introduction:

The Bureau of Customs is known to be one of the most corrupt government

agencies dates back up until the time of Spanish colonial rule. Many published reports

show huge customs revenue losses due to corruption. The extent of smuggling in the

Philippines is widely believed to be 12.2 pre cent to 53 per cent of recorded imports. It is

also published by the IMF’s Directions of Trade Statistics (1990) that at 11.59 per cent,

the Philippines has the second highest, after Thailand, of import undervaluation as a

percentage of total imports.

Having said of how the Bureau was perceived by many years, it took the BOC a

great hard work in reforming, modernizing, and performing to improve services and to

eliminate corruption. The Bureau of Customs, on March 26, 2021, officially launched one

of the major projects of the government, the Philippine Customs Modernization Program.

It is said in their website that the project was undertaken in line with the continuous efforts

of the agency to be a modernized customs administration at par with global standards.

With the support of the World Bank Group, the PCMP will focus on transitioning from a

largely manual and paper-based organization to a modernized Bureau of Customs,

achieving global standards and full modernization by 2024.

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Bureau of Customs Modernization Program

The Bureau of Customs Modernization Program was First introduced by WB in

2017, the PCMP is expected to improve the country's customs administration through

streamlining, automation, and development of a world-class customs processing system

(CPS) and the Project Development Objective is to improve the efficiency of the Bureau

of Customs and reduce trade costs. The PCMP, which includes important components

and innovations, intends to improve BOC systems, procedures, and operational activities

in order to streamline operations and processes and promote the reform program. The

Mod Act fundamentally altered the relationship between importers and CBP by shifting to

the importer the legal responsibility for declaring the value, classification, and rate of duty

applicable to entered merchandise. It was organized to help Traders, exporters,

importers, port operators, shipping companies, and transport providers. Many of them

small and medium enterprises employing many workers are expected to directly benefit

from a new project that will modernize operations of the Bureau of Customs (BOC).

The Bureau of Customs full automation will reduce face-to-face interactions and

delays, and increase accountability, all of which strengthens efficiency and improve the

business environment,” World Bank Country Director for Brunei, Malaysia, Thailand, and

the Philippines.

The project involves three components: modernization of customs operations,

organizational development, and project management and implementation support.

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Objectives and Implementation

Continuing on their goal: a modernized customs administration at par with global

standards and to achieve this, the BOC is implementing the Philippine Customs

Modernization Program, or PCMP, with World Bank Group support. By improving BOC

systems, procedures, and operational activities, the PCMP intends to streamline

operations and processes while also supporting the reform program. The Customs

Processing System is one of these inventions (CPS). It functions as a single, unified

system that incorporates all of the necessary elements and customs procedures.

Supervise and control all import and export cargoes, landed or stored in piers,

airports, terminal facilities, including container yards and freight stations, for the protection

of government revenue. Exercise exclusive original jurisdiction over seizure and forfeiture

cases under the tariff and customs laws

The CPS incorporates the capabilities and functionalities of the E2M customs

module that is currently in use, as well as elements that help with business continuity

while the system is being optimized. This results in a BOC that is efficient and ready to

trade and operate in the face of any limitation or inevitability, such as the current COVID-

19 pandemic conditions.

The CPS's new operating strategy emphasizes risk-based compliance

management. Remaining steadfast in its commitment of providing excellent and efficient

public service, the Bureau will continue with the implementation of modernization projects

to serve national and public interest. BOC will be undergoing process reengineering to

improve the country’s customs administration, reduce transaction costs and enhance

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predictability and transparency of the clearance process at the country’s borders by

utilizing Information and Communications Technology (ICT).

Outcome and Results

The 10-Point Priority Program, under the leadership of Commissioner Rey

Leonardo B. Guerrero, aimed to further strengthen the Bureau of Customs (BOC) by

addressing existing operational deficiencies and preparing for future challenges. As of 31

December 2021, BOC has completed 88.94% of the target activities under the 10-Point

Priority Program for 2021. In implementing of Customs Modernization Program, the

bureau achieved a 90.65% accomplishment rate. This component will help BOC

modernize its basic Customs operations. CPS, as well as supporting technical

infrastructure and internal processes capacity to manage and execute a sophisticated

ICT operation in a way that improves operational effectiveness, integrity, accountability,

and organizational performance.

The Bureau of Customs is continuously working on the implementation of new ICT

systems that will further modernize Customs’ core processes. Additional features have

been added to the E2M system. It includes the Online Export Release System Automated

Bonds Management System, Declaration (ABMS), as well as a General Transportation

Surety Bond (GTSB). An online portal that will be used by stakeholders in applying for

Authorized Economic Operator Program. An application system where stakeholders can

apply for advanced ruling on origin and advanced ruling on valuation. Nine (9) Technical

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Working Group Meetings were successfully facilitated by the Bureau of Customs, as

Chairman of the National Single Window - Technical Working Group (NSWTWG), to

ensure the continuous and effective implementation of the NSW in the country. The

operations of the NSW-TWG Clusters were also strengthened through the approval of its

Terms of Reference and respective Cluster Chairs. Hiring of Business Analysts and Trade

Facilitation Officers to assist the Department of Finance in the onboarding of Trade

Regulatory Government Agencies (TRGAs) in the TRADENET system. BOC has

implemented the exchange of electronic Certificate of Origin (e-CO) in all ports

nationwide. This document is automatically sent to the NSWs of other ASEAN Member

States through the ASEAN Single Window (ASW) System for utilization but This year,

BOC is also scheduled to join the ASEAN Member States in the electronic exchange of

the ASEAN Customs Declaration Document (ACDD)/Export Declaration.

The Bureau of Customs, being the government's second largest revenue

generating-agency, contributes to the notable growth of the Philippine economy. It

enables the national government to provide for the needs of the country and achieve

continuous socio-economic gains

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References

https://customs.gov.ph/wp-content/uploads/2021/06/Newsletter_MarApr2021.pdf

Customs Modernization and Tariff Act – RA 10863

CMTA IRR Guidelines & Procedure in Drafting the IRR and Submission of Position

Papers

Clearance of Goods under the Informal Entry Process (CAO 02-2021)

“Combatting Corruption in the Philippines Customs Service”, Guillermo Parayno, Jr.

Executive Order No. 836, s. 2009 “Transforming the Risk Management Group of the

Bureau of Customs into Risk Management Office”

Department of Finance Department Order No. 11- 2018, amending DOs 12-2014 and 18-

2014. Accreditation of Importers and Brokers.

Customs Administrative Order No. 6-2009 “Transforming the Risk Management Group of

the Bureau of Custom