By Mario Casayuran, April 4 2019; Manila Bulletin

Image Credit to Manila Bulletin

Senator Sherwin T. Gatchalian said yesterday the systemic corruption that has hounded the Bureau of Customs (BOC) throughout the years has dampened the country’s potential in cornering higher foreign direct investments (FDI) and caused its trade deficit to widen.

Gatchalian, chairman of the Senate economic affairs committee, revealed this observation following receipt of the latest report of the US Office of the Trade Representative (USTR) that indicates that corruption, leakage, and rent-seeking activities continue to plague the BOC.

Among the corruption and irregularities in the BOC that the USTR cited were undue and costly delays — including irregularities in the valuation process, 100 percent inspection and testing of some products, and customs officials seeking payment of unrecorded facilitation fees.

Based on the latest data from the Bangko Sentral ng Pilipinas (BSP), the country’s FDI was around $9.8 billion in 2018.

Philippine neighbors that are members of the Association of Southeast Asian Nations (ASEAN) have much higher FDI inflows.

Meanwhile, Philippine trade deficit to Gross Domestic Product (GDP) ratio widened to 12.5 percent or P2.18 trillion.

‘’Even before the USTR report came out, I had already filed Senate Resolution 1015 last February 6 seeking to conduct an inquiry, not only on the effects of unabated corruption in the BOC to the Philippine economy, but also to determine how solutions – ranging from automation to paperless transactions – could help combat these persisting problems in the bureau. We plan to include USTR’s allegations in our probe,’’ Gatchalian said.

Gatchalian said BOC officials should go beyond just identifying the leakages and sources of these corrupt practices and illicit trade.

‘He urged the BOC to completely automate all internal processes and eliminate human intervention,’’ he said.

‘’They should also continuously examine actual trade statistics to help reveal the proper benchmark to measure the success of the BOC collection vis-à-vis revenue target, and, more importantly, they should determine and measure the efficacy of the reforms that are currently being implemented,’’ he added.