A broken institution

"Customs needs an overhaul."



The best time to write about a recurrently contentious issue is when it is not in the newspaper headlines or the evening television newscasts. It is then that one can discuss the issue dispassionately.

A good example of this approach to journalistic writing is the Bureau of Customs.  BOC, a member of the Department of Finance family, is generally thought to be one of the most corrupt agencies of the government of this country. Almost all of the major stories that come out of the BOC -- huge shipments of goods given a lower-duty tariff classification, 2,000 container vans vanishing without a trace, P6.4 billion worth of methamphetamine (shabu) smuggled in magnetic lifts and other no less sensational acts of fiscal depravity—generate negative passion of such intensity that rational discussion of needed corrective action is rendered impossible.

As it stands today, BOC is a rotten institution. Anyone who thinks that the saying “No news is good news” applies to today’s BOC is dreaming.  Even as this is being written, goods are being smuggled into and out of this country or are being misclassified or are being spirited out—often, as in the case of the 2,000 container vans, without a trace—under the noses of not-so-watchful security guards and the electronic gaze of the closed circuit television cameras. 

This is the way of life at BOC. So-called reformist commissioners of Customs—during the present administration these have mostly been retired military officers—have come and gone but the rottenness has continued at the main Customs house in Manila’s South Harbor and in provincial Customs houses.

There seems to be no end to the mischief and misconduct at the BOC. Given the total value of Philippine import trade at this point in the country’s economic development, BOC should have been generating far more revenue than it has; corruption undoubtedly has been accounting for the enormous difference.  Little wonder that the BOC is now a distant third in the hierarchy of revenue generators, its erstwhile second place having been taken over by the Philippine Amusement and Gaming Corporation.

BOC is a broken institution; there is no other way to put it. Systemic changes—not cosmetic changes like the installation of yet another retired military officer—are called for.

What should those systemic changes be?

One of the needed corrective measures is the timing of the inspection of goods destined for this country,  The inspection can be done either prior to the shipment of the goods or upon arrival  The second option clearly has not been working; the government has been at the mercy of BOC’s cargo inspectors. The time has come to re-install the system whereby shipments to this country are inspected prior to ports of origin. During the administration of President Corazon Aquino, DOF enjoyed the services of the noted Swiss survey company, Societe Generale de Surveillance, to do the pre-inspection job. SGS’ services don’t come cheap and the value of its work is not always quantifiable, but almost anything is bound to be better than the present situation where the government is completely at the mercy of crooked BOC cargo inspectors. Unless the present inspection system is changed, there is not much point in talking about an improved BOC performance.

Another corrective change that needs to be undertaken has to do with the relationship between the BOC and its mother department.  Compared to its supervision of the Bureau of Internal Revenue, DOF’s supervision of BOC has tended to be lax and non-persistent. To remedy this, one of the Secretary of Finance’s chief subordinates should be named the Undersecretary of Finance for Customs Matters. One assistant secretary should be similarly titled.  The  desired focus will then become manifest.

Still another needed change is the creating by the Secretary of Finance, preferably in his office, of a Special Committee on Customs and Valuation.  The chairman of the committee­—ideally the Undersecretary for Customs Matters—should report regularly to the Secretary of Finance, re-flagging all questionable classifications and valuations.  BOC’s examiners should no longer be allowed to make a mockery of the Revised Tariff and Customs Code.

A more rational way of selecting the Commissioner is the final change that needs to be undertaken in order to improve the operations and raise the revenue-generating capability of BOC.  This, arguably, is the most important of the needed changes. The Commissioner sets the tone of BOC operations.  The perception of the character and competence of the BOC’s chief executive goes a long way toward shaping the attitudes and judgments of the bureau’s rank and file.  It is important, of course, that a Commissioner-designate possesses integrity, but integrity is not sufficient in this instance. The Commissioner-designate should have ample knowledge of the mindset of the average Customs employee. A bureau insider with a good reputation or an experienced customs broker would be preferable over a retired military officer undergoing on-the-job training.

BOC needs inside-out repair. Unless and until such repair is carried out, BOC will remain the weak link—the weakest link, in fact—in the government’s revenue chain.

Topics: Rudy Romero , Bureau of Customs. BOC , corruption
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