World Bank lends ₱4B to automate Customs transactions

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Metro Manila (CNN Philippines, October 28) — The World Bank has stepped in with an $88.28 million (about ₱4.3 billion) loan to automate processes at the Bureau of Customs, an agency dubbed by President Rodrigo Duterte as a corruption hot spot.

The global lender said in a statement Wednesday that its board of directors approved a fresh loan to the Philippines for the local Customs modernization project. The credit line will help improve local customs administration, reduce transaction costs, and enhance predictability and transparency of cargo clearances at the country's ports.

“Automation will reduce face-to-face interactions and delays, and increase accountability, all of which strengthens efficiency and improve the business environment," said World Bank country director Ndiame Diop.

In recent speeches, Duterte has blasted Customs officials and ordered a reshuffle of regional directors to sever ties that supposedly allow under-the-table deals between traders and officials.

Efforts to digitize the agency's processes date back to May 2016 when then President Benigno "Noynoy" Aquino III signed the Customs Modernization and Tariff Act into law.

The upgrades should help improve trade flows, fast-track cargo inspection, duty payments, and shipment clearances by using a seamless online system. This will also allow for an audit trail for all transactions for "less opportunity for corruption," the World Bank added.

"Prior to the COVID-19 pandemic, the Philippines was one of the most dynamic economies in East Asia and the Pacific Region. Nevertheless, its growth potential was constrained by inefficiencies in trade facilitation and customs administration," the Washington-based lender said.

The World Bank said it takes 120 hours, or five days, to clear customs procedures, against Vietnam's 56 hours, Thailand's 50 hours, or Malaysia's 36 hours.

Businesses, port operators, shipping companies, and logistics firms are seen to benefit from the new project loan.

This turns off local firms to export their goods, fearing the long and tedious process of getting their shipments past border control.

"With the full automation of the BOC’s core processes, trade facilitation will vastly improve, revenue collection will increase, and processing time and trade costs will significantly be reduced," the bureau said in a separate statement.