Speech of Napoleon L. Morales on the occasion of the 106th Founding Anniversary Celebration of the Bureau of Customs
February 6, 2008, 10:00 a.m., Port of Manila
Honorable Senate President Manny Villar;
Finance Secretary Gary Teves;
our friends from the international donor agencies;
our partners in the private sector;
colleagues in other government agencies;
other distinguished guests;
former Commissioners and retired officials of the Bureau of Customs;
my fellow public servants;
Today the Bureau Celebrates its 106th Founding Anniversary, and as we pay tribute to 106 years of service--- and pave the way towards a world-class customs service,--- it is my honor to present this morning the accomplishments and milestones of the Bureau of Custom in 2007.
Let me start on Revenues.
The Bureau collected 210.5 billion pesos, a new chart-topper,--- exceeding 2006 collections by over 12 billion pesos or 6.2 percent. This, we achieved despite the strengthening of the peso against the dollar--- and the reduced rates of tariff imposed on the most commonly imported goods that is brought about by international trade agreements.
11 of the fifteen ports surpassed their 2006 collection performance.
We fell short of the 228 billion pesos target, we admit,--- but this does not dampen the fact that the bureau out-did its performance year on year and that everyone---from the high-level management down to examiners and appraisers in all ports-- heeded the call of the President to rev up collection efforts.
Despite the odds that macro-economic assumptions that pegged the 2007 target did not materialize--- and the meager budget allocated for the bureau, we were able to hit record-high collections,--- with average expenditure of 58 centavos for every one hundred pesos collected for the government coffers.
Mid 2007 we rehashed revenue collection strategies,--- exploring non-traditional sources of revenues--- to off-set the negative effects of a surging currency on our collections.
We updated the valuation database,--- publishing 9,650 test values based on international prevailing prices of commodities.--- For oil importations alone, the bureau collected an additional 3.9 billion pesos--- through a combination of value verification using the industry-accepted PLATTS Report on oil.--- and strict monitoring of the volume being discharged from vessel to vessel--- thus, eliminating the age-old practice of assessing oil importation using shore receipt. ---That is 3.9 billion pesos of what could have been foregone revenue for the government.
Last year, we have also seen the birth of Customs Administrative Order 8-2007. This mandates that all importation should be properly and specifically declared in tariff terms. Failure to comply with this requirement shall place the shipment on a continuing Red Alert status and shall subject it to automatic 100% physical examination.
The CAO served as the hammer that drove-in the use of updated values in assessment--- and maximizing duties and tax payments for every transaction with the bureau.
The Post Entry Audit Group generated 813 million pesos from mandatory compliance audit.--- This represents only 165 audited companies or some 3 percent of over the 8,000 accredited importers. But a relatively big chunk of collections come from this small percentage.--- I made my orders clear--- use the international best practice of industry-selectivity criterion in prioritizing audits—putting first the industries where undervaluation and technical smuggling are most likely to occur---especially the oil industry which comprise over 20 percent of our collections.
The newly launched Voluntary Disclosure Program under the PEAG brought in another 130 million pesos in non-traditional revenues. What was originally planned as a program to ease the burden of our under-staffed Post entry audit group--- turned out to be a proactive solution by encouraging a culture of honest compliance by our stakeholders.
On Intelligence and Enforcement.
The Intelligence and Enforcement Group of the bureau maintains a strong force of intelligence and enforcement operatives in all ports nationwide.---
Through the IEG, the Bureau has apprehended over 2.2 billion pesos worth of counterfeit goods and contrabands from over 500 shipments seized and abandoned due to misdeclaration, undervaluation and outright smuggling of prohibited goods.
The efforts of the bureau,--- coupled with the close cooperation with other government agencies such as the Department of Agriculture, Maritime Industry Agency, Optical Media Board, Land Transportation Office and the Philippine Drug Enforcement Agency,--- has resulted to a more effective and efficient enforcement of tariff and customs laws.
Noteworthy is the performance of the Intellectual Property Unit,--- which breached the one billion mark, apprehending over P1.1 billion pesos worth of fake and counterfeit products,--- making it the Top Performing Intellectual Property Unit in the country, outdoing their counterparts in OMB, NBI and PNP.
In many international customs conventions, the Intellectual Property Unit of the Philippine Customs is always used as an example of efficient IP enforcement and is lauded by our customs counterparts in Asia, especially Japan and China.
IP owners have become our partners in the fight against counterfeit goods. Last year, 230 trademarks were recorded with the bureau. This recordation serves as a continuing complaint against any and all infringing shipment, allowing the BOC to seize infringing goods even without a formal complaint lodged by IP owners.
We do not stop with apprehensions alone.--- To make sure the sustained campaign against smuggling,--- we file criminal cases against smugglers and erring importers together--- with the brokers and customs personnel they are in cahoots with. Access of suspected smugglers with our system is immediately blocked,--- barring them from lodging any further importation with customs.
Through the Run After the Smugglers Program, the Bureau hired 42 additional lawyers to beef-up the prosecution arm of the bureau.
These lawyers are now deputized by the Department of Justice and the Office of the Solicitor General.--- Under the RATS program, a total of 60 criminal cases were filed against 265 respondents and covers P1.54 billion worth of shipments.
These cases,--- some of which are in the preliminary investigation stage, others pending with the DOJ or awaiting resolution by different courts,--- are constantly monitored and followed through by our RATS team.
On Securing and Facilitating Trade
2007 witnessed many milestones in the bureau’s mandate of trade facilitation and security,--- the greatest of which is the full roll-out of the Non-Intrusive Container Scanning Project,--- more familiarly called the X-ray Scanning Project.
We have already 19 units deployed in 9 ports all over the country,--- eleven more are set to be deployed in five ports this year--- and have trained 453 x-ray technicians to operate and maintain these state-of-the-art equipment.
Now, with automated container scanning machines,--- we have increased our inspection efficiency,--- not only increasing the integrity of inspection results,--- but also facilitating faster release and clearance of shipments.--- What use to take half a day of tedious manual inspection of one container--- is now reduced to 3 minutes complete scanning through the x-ray. Since its roll-out in May, the x-ray scanning has facilitated the release of nearly 13,000 containers without the need for physical inspection.
In two different operations, the X-ray scanning team at the Port of Manila were able to detect the undeclared drums of toluene, other chemicals that are precursors to shabu and laboratory equipment that were hidden in the back of the containers. This led to the apprehension of these chemicals and paraphernalia that could have produced over P700 million worth of shabu. Other noteworthy apprehensions were the seizure of a mother load of DVDs, pornographic CDs and replicating machines, a stock of motorcycles, used motor vehicles and tires.
Another endeavor for trade facilitation and security is the E-customs Project. The Management Information System and Technology Group is responsible for automating all customs operations.
Last year, we phased-out the entry-encoding centers--- and migrated to internet based lodging of entries.--- Like common practice in other countries,--- we out-sourced this front-end automation and accredited three value-added service providers to cater to the transactions of our clients.---
Just in December, MISTG launched the Customer Relations Management System which is designed to operate a centralized customer service facility.--- We hired customer service representatives who are trained to answer all queries on customs--- and perform out-bound campaigns via phone or electronic mail.
The MISTG, through Deputy Commissioner Alexander Arevalo Chairs the ASEAN Single Window Project Technical Working Group that aims to share data amongst ASEAN countries through a single, synchronous window framework.--- The Pilot Implementations between the Philippines and Korea and Thailand has started last year.
To prepare all customs ports of the country to the eventual transition to various systems under this project,--- nationwide area network have been concluded with 25 ports and subports.
This physical and technical preparedness have been matched with the conduct of change management and communication activities for the human resource component of the BOC and its external stakeholders, including trainings and orientation sessions on the various systems.
Deputy Commissioner Arevalo is also the Chair of the Technical Working Group of the National Single Window,--- the building block of the ASEAN Single Window. The BOC,--- through the P500 million Project Fund,--- is tasked to provide the hardware, software, trainings and connectivity of 50 government agencies concerned with international trade facilitation.
With the European Union supporting the development of the unified electronic clearance system between initial ten agencies,--- the Department of Agriculture and seven of its agencies were already provided with the hardware, software, training and interconnectivity with the bureau for the encoding of licenses and clearances.
The National Single Window system is set to be fully operational by mid-2008,--- This will surely reduce the cost of importers and make the country a stronger link in international trade.
On Professionalizing Personnel
The Bureau of Customs recognizes that our richest resource is our people,--- thus we invest heavily on trainings and capacity building workshops--- to make sure that our people are competent and updated on latest techniques and international best practices.
As of the end of 2007, we have a total of 4,551 personnel;--- each one has attended at least one capacity building seminar workshop or training to boost competence in the work field.
Last year the bureau embarked on a P105 million integrity program funded by the P1 billion anti-corruption fund of the government.
A chunk of this fund went to the construction and equipping of the Customs Capacity Center which was launched last year.
The Customs Capacity Center now serves as our main venue for trainings,--- whether bureau-sponsored or conducted by our international partners such as the World Customs Organization, Japan International Cooperation Agency, European Union and US Agency for International Development.--- Of these numerous foreign-aided trainings--- 3,358 of our personnel were the beneficiaries.
We have done much, achieved much in 2007.
Today is the Eve of the Chinese New Year. According to the Chinese, the Year of Rat is a time for hard work, activity and renewal.
Today we celebrate our past achievements,--- and tomorrow, as the Chinese Celebrate the Dawn of the New Lunar Year,--- we in the Bureau shall continue to work,--- capitalizing on our past gains --- and taking the next steps towards our ultimate goal.
So perhaps the Chinese are right.---
The Year of the Rat will indeed be a time of hard work,---- more activity and action---- and renewal of vision, mission and goals--- as we drive the Bureau of Customs to be amongst the World’s best--- that every Filipino can be truly proud of.
Salamat at Mabuhay kayong lahat.