Neda Board OKs Customs modernization

The National Economic and Development Authority (Neda) Board chaired by the President has given its go-ahead to modernize and automate processes at the Bureau of Customs (BOC).

Socioeconomic Planning Undersecretary Jonathan L. Uy said the Neda Board’s approval of the P5.4-billion Philippine Customs Modernization Project was secured last May 13.

Customs Commissioner Rey Leonardo B. Guerrero told the Inquirer that the BOC was “hoping to have the project started soon,” although they were still awaiting approval of the World Bank loan.

The World Bank financing will account for 85 percent of project cost, while the remainder will come from counterpart government funds, Guerrero noted.

Loan negotiations between the World Bank and the Department of Finance started last May 12.

“[Guerrero] has already signed the letter to the Department of Budget and Management for the issuance of a forward obligation authority for the project, a requirement for loan negotiation. The BOC will also issue a customs special order creating the project management unit tasked to oversee implementation and ensure that project objectives, along with specifications and standards set, are met during construction, deployment and implementation. A special bids and awards committee shall also be constituted for procurement of different components of the project,” the country’s second biggest revenue agency said.

Based on earlier World Bank documents seen by the Inquirer, the board of the Washington-based multilateral lender is expected to approve the loan on July 7.

The World Bank loan will help the BOC “by investing in modern information and communications technology systems and installing ICT equipment (such as computers and servers) around the country,” the lender said.

Specifically, the BOC plans to modernize its core customs processing system, which remained unchanged since 2005; modernize inspection through a non-intrusive process involving remote image analysis centers as well as upgrade its data centers (to be located in seismic- and typhoon-proof areas) and network connectivity.

The World Bank financing would not only improve the BOC’s efficiency but also reduce trade costs in the Philippines.

Guerrero said that since last year, the BOC was already developing in-house ICT projects which digitized processes and allowed electronic/online transactions at the country’s ports.

The World Bank had lamented the BOC’s poor trade facilitation, which the lender blamed on “outdated infrastructure and inadequate business practices.”

At present, the country’s export competitiveness is impeded by high trade costs, the World Bank said, as its Doing Business 2020 report showed that “investors in the Philippines face the highest import costs and the second highest export costs, just behind Myanmar” in Asean.