Press Release
April 4, 2019

Statement of Senator Win Gatchalian on the US Office of the Trade Representative (USTR) Report on Corruption at the Bureau of Customs

The latest report of the US Office of the Trade Representative (USTR) is a clear proof that corruption, leakage, and rent-seeking activities continue to plague the Bureau of Customs (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.

Unfortunately, the systemic corruption that has hounded the BOC throughout the years has dampened our country's potential in cornering higher foreign direct investments (FDI) and caused our trade deficit to widen. Based on the latest data from the Bangko Sentral ng Pilipinas, the country's FDI was around $9.8 billion in 2018. Meanwhile, trade deficit to GDP ratio widened to 12.5 percent or P2.18 trillion.

Even before the USTR report came out, I had already filed Senate Resolution No. 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.

In the meantime, Customs officials should go beyond just identifying the leakages and sources of these corrupt practices and illicit trade. I urge the BOC to completely automate all internal processes and eliminate human intervention. They should also continuously examine actual trade statistics to help reveal the proper benchmark to measure the success of the BOC collection vis-a-vis revenue target, and, more importantly, they should determine and measure the efficacy of the reforms that are currently being implemented.

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