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OFW Solon’s Radical Proposal:
 
BID OUT ALL CUSTOMS OPERATIONS TO INTERNATIONAL FIRMS, BUILD NEW BoC
 
2016 COA audit proves Bureau of Customs really resistant to reforms
 
We have tried everything.
 
Many attempts have been made to reform the Bureau of Customs but in the eyes of the public and of Congress all those failed. We can only conclude that either the right solution has not been applied or that the Bureau of Customs has been impervious to reform.
 
Congress even tried to reform the Bureau with a Customs Modernization and Tariff Act (CMTA) which is Republic Act 10863, approved on May 30, 2016. But it seems that even with RA 10863, real reform at Customs has been elusive.
 
One solution not yet resorted to is the wholesale, complete, absolutely total overhaul of Customs operations. One step toward this is by contracting out to an international firm, all customs operations in the Philippines.
 
One way, I think, this can be done is by the international bidding out of all Customs operations, including human resources, administration, finance, utility services, to a competent globally respected customs operator. This can be done using existing build-operate-transfer law and regulations.
 
However, there must be a prohibition on hiring any current or former customs personnel.
 
The implementation of the Management of Customs Operations Bid Contract can include civil society oversight and periodic review.
While Customs Operations are contracted out, a multi-sectoral Public-Private Customs Overhaul Commission can map out and implement the building from the ground up a totally new Bureau of Customs. No absorption of current personnel. Surely some contentious issues would need to be ironed out, including relevant civil service laws and regulations.
 
Building a new Bureau of Customs might take about seven to ten years. Then there will have to be a transition phase to enable the new bureau to run customs operations that meet international standards.
 
Perhaps an Executive Order by President Rodrigo Roa Duterte can get all these done. The BOT Law and regulations we already have.
 
This radical proposal is consistent with the ideas of President Duterte on customs privatization. I agree with the president that privatizing the BOC will eliminate political interference in its operations. https://goo.gl/Y9d4QX . The time for this is NOW, not later. (END)
 
Backgrounder:
 
In 2016, the BOC had 6, 285 personnel in authorized plantilla positions and 897 personnel hired under the Contract of Service with six-month contracts ending on December 31, 2016, according to the latest Commission on Audit annual audit report on the Customs Bureau.
 
That audit report and previous years’ audit reports prove how resistant the Bureau is to reform. Here are some excerpts (highlighting ours) from the COA report:
 
Of the 158 prior years’ audit recommendations, 10 were implemented, 96 were partially implemented, 31 were not implemented, 16 have no status of implementation and 5 were overtaken by events.
 
The completeness, accuracy and reliability of  57 accounts totaling P29.573 billion could not be ascertained due to: (a) non-maintenance of Subsidiary Ledgers (SLs) accounts of various accounts; (b) SLs of six cash accounts not updated; and (c) reconciliation with the corresponding General Ledger (GL) accounts were not carried-out, inconsistent with the provision of Section 12 b, Chapter 2, Government Accounting Manual (GAM) for National Government Agency (NGAs), Volume I,  the instructions in Appendices 5 and 6, of GAM for NGAs, Volume II and Sections 111 and 122 of Presidential Decree 1445 (PD 1445).
 
The Cash in Bank balance of P6.754 billion is unreliable due to: (a) unreconciled differences between the records of BOC-NAIA and port of Davao, and the SLs of OCOM Accounting Division amounting to P362.670 million; (b) unrecorded Cash in Bank, Local Currency Current Account (CIB-LCCA) of BOC-NAIA amounting to P718.527 million; and c) inclusion of two closed bank accounts in the Schedule of CIB-LCCA.
 
A total of 1,452 overstaying containers at MICP and Port of Cagayan De Oro, carrying various articles have remained undisposed for a period of 30 days to more than 25 years, which includes 143 containers loaded with perishable goods, 217 containers with no information as to their contents and 1,221 containers with no schedule yet of auction/disposal, thereby delaying the realization of revenue from the sale of these articles and may result to further deterioration. Moreover, it included, 104 containers of imported articles to be donated to the Department of Health (DOH), Department of Social Welfare and Development (DSWD) and Philippine Red Cross (PRC), but were not yet released from BOC for 1,044 to 1,153 days, thus defeating the purpose for which the donation was made, notwithstanding that the cargoes are considered tax exempt under Section 105 of the TCCP Volume I.
 
The Notices of Suspension, Disallowance and Charge of P379.65 billion, P.417 billion and P32.2 billion, respectively, remained unsettled contrary to Section 6.1 of COA Circular No. 2009-006 dated September 15, 2009 and Section 7 of the 2009 Rules and Regulations on Settlement of Accounts.

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