Manila Customs E-Commerce Project In Question

Industry and goverment elements in the Philippines are criticizing The Bureau of Customs (BOC) e-commerce and computerization project.

In 1993, the BOC received a World Bank loan amounting
to 36 billion pesos for its computerization project, according to one Custom’s insider who requested not to be identified.
Vendors from Unisys, UNCTAD team, SGS were part of the project.

A Built-Operate-Transfer (BOT) contract was also inked with G.E.
Information System last November 1997 for the implementation of the
e-commerce module.

The project’s deadline is June 1999. After this date, the Philippine
government will need to start paying for it. Unfortunately, since the
former Commissioner’s departure, the project experienced a major

One of the critical components of the project, its e-commerce
segment, was launched in June 1998 and now processes warehousing entries.
The e-commerce component was originally intended to meet the requirements and
agreements made between the Philippines and APEC, WTO, and WCO.

The second phase, originally scheduled to start last September, was put on hold. This phase intended to implement the formal entry of finished
materials with payment of taxes and duties.

According to the inside
source, people within the BOC are feeding the new BOC Commissioner,
Nelson Tan, false and misleading information to delay the second phase.

The e-commerce project was intended to be a
incentive facility for brokers and importers with good track records of fraud-free dealings.
The project will ideally improve the processing time of
import transactions from 8 hours to 1 hour.

The source pointed out that the project also was implemented to
eradicate graft and corruption in BOC.

At present brokers and
importers pay from 5000 to 10000 pesos per container prior to release
of their goods. This does not include the 800 pesos under-the-table
charges in the encoding center which passes 80 percent of transactions.

Phase 2 will facilitate electronic transactions by bypassing the
Encoding Center, P.O., and duty lift stop. Brokers, upon electronic
submission of their declaration, will go through several electronic
processes until they receive the release documents to pick up their goods from the port operator.

At present, the BOC e-commerce project is under pilot with 3 Common
Bonded Warehouse operators and 1 Customs Broker participating. They
represent a community of not more than 500 importers.

The critics of the system within the BOC said that the
selectivity system is flawed. This is denied by the inside
source since parameters were set, but not limited to, for country of
origin, broker record, and items declared.

The source alleges that the flaws or inaccuracies
are mostly human-made since some favored transactions are being
processed and edited in the encoding center, where some goods are not
declared to lower the taxes.

“Selectivity was not the all-in-one solution for high collection but proper collections,” the source added.

“When we were starting the project, countries like Thailand,
Indonesia, Africa, South America were looking at us as a potential
model for this project. The delays, caused by insider blocks who were
not supportive of this initiative, have given the notion to the
international community that the BOC computerization and e-commerce
project is a failure. If this will not be acted upon soon, this
entire project especially its e-commerce side may end with a natural

“NCC is now talking to BOC’s CIO
Commissioner Brillo as we anticipated the end of contract or
departure of Unisys. Essentially, BOC will manage it on their own but
NCC will provide assistance,” said National Computer Center (NCC) Director
General Ike V. Señeres.

“NCC will be [engaging in a] role to support PresidentEstrada’s advocacy
agenda to clean the government and its ranks. Information technology
will play a major role in accomplishing that task. We will not allow
this project to die and see government’s funds go to waste,” he added.

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