A look at PH customs chief’s first 100 days

A look at PH customs chief’s first 100 days

Philippine Customs Commissioner Isidro Lapeña

Reforms geared towards eradicating corruption and increasing revenues marked the first 100 days in office of Philippine Customs Commissioner Isidro Lapeña, a Bureau of Customs (BOC) release said.

President Rodrigo Duterte in August this year appointed Lapeña, a Philippine Military Academy alumnus who has had 34 years of government service and was then head of the Philippine Drug Enforcement Agency (PDEA), to lead the BOC.

To mark his first 100th days in office on November 30, BOC compiled Lapeña’s plans, programs, and achievements.

On his first official day on August 30, the new customs chief declared he would give all BOC officials and employees a clean slate. He also announced, however, the strict enforcement of his “No tara (grease money), no pasalubong, no gift and no take” and “one-strike” policies. Sticking with these policies, the new customs chief in his first month in office relieved an employee caught extorting from truckers.

No benchmarking rule

One of his first orders, which he has repeatedly announced, is to do away with the practice of benchmarking and instead apply the correct valuation for goods entering the ports.

He told the agency’s personnel to just step aside if they are unwilling to heed his orders.

The strict enforcement of the “no benchmarking” policy, BOC noted, has since resulted in the relief and reshuffling of a total of 186 BOC personnel in a span of three months. These include 30 Formal Entry Division (FED) section chiefs of the two major ports—Manila International Container Port (MICP) and Port of Manila—who were reassigned to provincial ports. For obviously disregarding this directive, 25 others were reassigned to the Customs Monitoring Unit (CMU), including 10 district collectors.

He also imposed the “One Assessment, No Sectioning Policy” at the two major ports, which meant removing sections in FED to stop the “suki” system or the collusion between importers, brokers, and customs employees to expedite release of shipments once grease money is paid. The sections were replaced by a queuing system or the “first come/first served basis” policy, and a status verification system—a tracking system that can identify the current status of the entry documents as well as the timeframe for completing the processing.

Customs examiners and appraisers in charge of assessing the value of import commodities also underwent a series of refresher courses on valuation and commodity classification to adopt a systematic valuation of goods in line with the World Trade Organization (WTO) provision.

“There will be more reshuffling if the BOC personnel will not cooperate in the reforms we are making. I told everyone there, I will work within the Bureau. I will be one with them. But we must be all moving in one direction, and that is removing corruption at all levels,” Lapeña said in one of his speeches.

Only recently, Lapeña made a walk-through at the MICP to check on the port and found out that gatekeepers and customs police at the terminal gates were only duplicating the workload of the terminal operators, and some were even receiving money from truckers.  As a result, the gatekeepers and customs police assigned at the gates were immediately removed. “This has to stop immediately,” said the customs chief.

Anti-corruption, transparency programs

Part of Lapeña’s anti-corruption program is intensified transparency in the way things are being done in the bureau. In line with this, he has ordered the public awarding of tax credit certificates (TCCs) to rightful owners to dispel allegations of receiving tara from importers. Reports reached Lapeña that TCCs have long been a source of “pasalubong” (gifts) to new commissioners in BOC.

TCCs are documents issued by BOC or jointly with the Department of Finance (DOF), to refund the taxes paid by companies in cases of excess duties, canceled importation, or due to value-added tax (VAT) input or output tax. The Tax Credit Secretariat was revived to facilitate the timely release of the TCCs. As of December 7, a total of P223.7 million worth of TCCs including tax refunds have been awarded during the agency’s regular flag-raising ceremony.

Another highlight of Lapeña’s anti-corruption program is simplifying and shortening business processes. He believes delays breed tara and corruption, as he has always said that “Kung may delay, may kita. People will always look for faster service.”

To speed up service to stakeholders, Lapeña has issued a memorandum that directs all offices to act on requests and permits within five working days. As a result, the Account Management Office (AMO), the office principally responsible for the registration, management, and maintenance of information on accredited importers and customs brokers, was able to address a backlog of 1,852 importers’ applications for accreditation and renewal.

Lapeña also strengthened BOC-Customer Assistance and Response Services (BOC-CARES), the helpdesk which regularly receives feedback and inquiries from the public and stakeholders. BOC said Lapeña believes that an effective client support system providing accurate and timely information will contribute to ease of doing business at the customs agency.

To also increase transparency efforts, regular media briefings are done to inform the public on improvements to BOC’s systems and processes.

Raising revenue collections

Another of Lapeña’s main focus is revenue collection. It has become his struggle to run after the P20-billion revenue deficit before his assumption in August because of the supposed collusion between importers and customs officials to benchmark the value of shipments to pay lesser duties and taxes.

He has been encouraging customs officials to adhere to the WTO Valuation Agreement, while also asking stakeholders to cooperate by not paying bribes and instead pay the correct valuation.

BOC said Lapeña’s call to importers, customs brokers, and customs officials has helped to raise the collection of duties and taxes, with the agency posting record highs since September. The most notable was in November when revenue collection reached P46.470 billion, which exceeded the target by 12%, and is the highest monthly collection yet. Last October, BOC collected P42.915 billion, beating the P42.690 billion target. The bureau had also hit a record-breaking P3.8 billion collection on November 10.

BOC noted that aside from hitting revenue targets, applying the rules in valuation has provided a fair playing field to stakeholders, especially micro business owners, since everyone pays what is due from them.

In 2018, DOF has set BOC’s revenue collection target at P637.1 billion, 36.5% higher than the P467 billion target in 2017. The customs commissioner has shown a positive attitude towards the 2018 target, saying: “Our three-month collection shows we can do it. We are not doing a miracle here, we’re just doing things right this time.”

On trade facilitation, one of Lapeña’s first orders is to abolish the controversial Command Center and revert the authority to issue alert orders to the customs chief, deputy commissioner of the Intelligence Group, and all district collectors.

He also wants alerting officers to be accountable for their alerted shipment and for such shipments to be examined within 48 hours, or 24 hours in case of perishable goods, from the issuance of the alert order. Twelve Office of the Commissioner (OCOM) representatives were designated to check the timely conduct of examination on alerted shipments. Shipments with negative findings after examination will be immediately released, as ordered by Lapeña.

An emerging concern from Filipinos abroad was the tedious requirements concerning duty and tax-free privileges, which has prompted Lapeña to suspend the requirements needed to avail of the P150,000 duty and tax exemption of OFWs and the non-intrusive examination of balikbayan boxes. Roughly 3.482 million balikbayan boxes arrive yearly in the Philippines through MICP alone—an average of 290,000 packages a month. This move was lauded by various OFW organizations.

Another measure to facilitate trade is to upgrade and ensure full automation of the systems and processes at the bureau, BOC noted. This is seen to materialize in 2018 once the World Bank gives BOC a $200 million loan for its IT upgrade.

Green lane suspension

To ensure that no contraband enters the country’s ports, Lapeña has also suspended the green lane, which was embroiled in controversy after a shipment of illegal drugs worth P6.5 billion was directed to this lane and slipped past BOC. Shipments now have to pass either through the yellow lane for documentary review, or the red lane for both documentary review and inspection. As Lapeña said, “It’s better to be safe than sorry.”

Aside from this, he ordered the 24/7 x-ray examination of all shipments passing through BOC ports, except for Super Green Lane-accredited shipments; Philippine Economic Zone Authority-bound shipments; perishable goods except those from China; shipments of multinational companies; and shipments intended for government projects.

The bureau also acquired 19 additional x-ray machines, three of which have been installed at the terminals of Ninoy Aquino International Airport, the country’s main gateway. Fifty-six more x-ray units will be purchased in 2018 to beef up the anti-smuggling capacity of the bureau.

“This will boost our anti-smuggling campaign amidst the increasing incidents of smuggling and drug trafficking,” Lapeña noted.

He also abolished the Special Studies and Project Development Committee (SSPDC) and transferred its function to the Bureau’s Action Team Against Smugglers (BATAS) of Legal Service.

Lapeña, meanwhile, has already visited a total of 23 ports during his first three months in office.

“I personally monitor the ports nationwide to assess their needed logistical and financial support and to know their accomplishments,” Lapeña said. BOC said Lapeña’s port visits resulted in dialogues between him, bureau employees, and stakeholders of the ports.

Seizures and apprehensions

BOC also highlighted several seizures made during Lapeña’s first 100 days, including the following:

  • P141.2 million worth of luxury cars seized at MICP, including 12 Toyota Land Cruisers, three Range Rovers, two Chevrolet Camaros, one McLaren, a used Lamborghini, and a used Ferrari.
  • P5.3 billion worth of counterfeit goods such as the P3 billion worth of cosmetic products, perfumes, and other merchandise goods busted in Tondo, Manila; P300 million worth of fake cigarettes as well as food products seized in warehouses in Quezon City; P2 billion worth of fake electronic goods and beauty products foiled in Binondo, Manila; P43.6 million worth of agricultural products (rice, potatoes, carrots, onions) seized; P215 million worth of goods seized by the Port of Cagayan de Oro including a vessel, the M/V Jake Vincent Seiz; and P4.6 million worth of smuggled rice busted while on transit by the BOC-Port of Davao.
  • P71.29 million worth of illegal drugs including a 6-kilogram package seized at FedEx worth P30 million; the arrest of a Colombian drug mule and interception of an estimated P8.89 million worth of cocaine at NAIA; the turnover of illegal drugs worth more than P3 million worth to PDEA; P5 million worth of shabu intercepted at FedEx NAIA; and P24.4 million abortion pills busted at NAIA.

Morale boosters

One of the customs chief’s priorities is to boost the morale of BOC employees, and to do this, he has fast-tracked the promotion of 567 personnel. Additionally, he announced that 3,326 vacant positions will be filled to augment the bureau’s workforce. While vacant positions are open to the public, employees will be the top priority when filling these positions.

Lapeña hopes to replace tara with a legal means of benefits and incentives. He wants to reward offices and personnel that are doing their tasks assiduously.

“This will really boost the morale of the employees as we enhance the incentives, reward system, and compensation benefits. It affects the effectiveness and efficiency of the employee,” Lapeña said in one of his speeches.

As a result, BOC said all employees will be held accountable for their functions as long as they are justly compensated.


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