Legal obstacles hamper full digitalization of BOC

The Bureau of Customs (BOC) is further pushing back a plan to fully digitalize processes and transactions to 2026 as it continues to grapple with legal woes that have delayed procurement.

“Just a little bit of an adjustment because of some delays legally that we’ve experienced. And some delays in the procurement of some items leading toward that particular project,” Customs Assistant Commissioner Vincent Philip Maronilla told reporters last week.

The agency had hoped to completely automate its operations by the first quarter of this year in a bid to increase efficiency, curb rampant smuggling and cut trade costs. Court cases, however, have prevented it from procuring certain parts of the project, forcing it to initially move the completion target to 2024. Maronilla did not provide details about the status of the cases.

He said processes and transactions would be 98-percent digitalized by the end of 2023. The remaining 2 percent, he explained, involved procedures and systems that were “more on the port operation side rather than the assessment side” but were nevertheless “very critical for some of our internal systems.”

As of 2022, the bureau achieved a 94-percent digitalization rate, which means that 159 out of 170 processes had already been automated.

For years, the Philippines’ growth potential was constrained by inefficiencies in trade facilitation and customs administration, which created an unfavorable business environment that reduced the incentive for companies to engage in export.

Based on World Bank data, prior to digitalization efforts, a container in the Philippines took 120 hours to clear customs and other inspection procedures, longer than neighboring Vietnam’s 56 hours, Thailand’s 50 hours and Malaysia’s 36 hours. That said, the World Bank is helping the BOC in its digitization efforts through an $88.28-million loan approved in 2020.

To facilitate procurement, Maronilla said the BOC has “restructured” its processes by putting up more special bids and awards committees instead of having just one unit handling all purchasing of components needed for the automation project.

“We still have the full 2024 and 2025. That’s two years. But if you base it on the original timeline and the delays that have been made, then that’s where we’re basing the 2026 revised extension to,” he noted. INQ