‘Den of thieves?’ : Article by Roberto F. De Ocampo, OBE

By now we may have already succeeded in convincing most of our people, if not most of Asia and the world as well, that we have the worst Bureau of Customs on the planet. The continuing public spectacle of charges and countercharges of corruption, incompetence, downright criminality and blatant abuse of political influence emanating from the ongoing Senate inquiry into a mammoth drug shipment that seemingly slipped or was deliberately made to slip undetected through customs inspection and processes has reignited, if not confirmed, public perception of the bureau as a den of thieves and the political hierarchy as a proactive contributor to the bureau’s descent to perdition.

This state of affairs saddens me and perhaps others who may still recall (to the possible surprise of many) that there was a time in the not-too-distant past when our Bureau of Customs was hailed as the model of Customs operations and management in the Asean. That recognition occurred during the Apec and Asean meetings held in the Philippines in 1996-97, and was the result of a well-thought-out game plan combined with a serious and dedicated implementation thereof during the Ramos administration to reform the bureau, modernize its processes, streamline its organization, and remake it into the positive contribution to Philippine economic progress that it should be. The core principles of that reform operation, embodied in a document titled “Blueprint for Customs Development Towards the Year 2000” and prepared by the bureau under the leadership of then Commissioner Guillermo Parayno Jr., were arms-length valuation of shipments, narrowing of areas of discretion of customs personnel, application of technology, and enlistment of active private sector support.

Among its key elements were:
1) introduction of a pre-shipment inspection (PSI) scheme to conduct import inspections at the country of export, undertake training and observation tours on international best practices, and provide state-of-the-art equipment to improve the efficiency of the customs service;
2) reengineering of systems and procedures covering customs transactions by, among others, automating processes to avoid intervention by customs officers in 80 percent of all transactions, with a target of increasing this to 95 percent, introducing paperless and cashless processes, privatizing certain operations, linking all agencies participating in the system electronically, and encouraging the use of the KISS (keep it simple, stupid) principle; and
3) harmonization of customs procedures and adoption of international best practices.

So what happened to bring us to the shoddy customs service we have today? To begin with, the PSI contract was allowed to lapse on grounds that the program’s objectives had been achieved, that Filipinos could do the job better, and that the cost was too steep. But the outcome seemed to have been a reiteration of a famous (infamous?) observation that it’s preferable to have something run like hell by Filipinos. It may even be possible to compute that the cost of corruption far exceeds the high cost of the PSI.

Furthermore, the paperless processing of green lane and other facilitated shipments was discontinued, thus reopening the areas of discretion that allow for as much as 40 million face-to-face interactions each year, with each of these being an opportunity for corruption. Finally, instead of a relentless streamlining effort and expanded application of technology, offices that were removed or functions rationalized as a result of automation were restored and positions that became redundant and kept vacant were again filled up.

This dismal state of affairs should not be blamed on the current management of Customs alone but is a reflection of an accumulation of neglect and abandonment of the reform agenda since about 1998.

It cannot be rectified by exchanges of charges, bombast, finger-pointing, grandstanding, and bravura statements about jailing culprits. The starting point should be a calm but resolute restoration and prioritization of the reform agenda. Otherwise, the continuing saga will be, to quote from Shakespeare, “a tale full of sound and fury, signifying nothing.”


Roberto F. De Ocampo, OBE, is a former finance secretary and was Finance Minister of the Year in 1995, 1996 and 1997.