BoC accomplishment report


“The marching order I received from the President is to stop corruption and increase revenue earnings. I am not here to pass judgment. But I am here to institute changes — changes that would help regain public trust and confidence of the bureau.” – Commissioner Isidro Lapena

In a bid to reform the ‘public-perceived corrupt agency,’ President Rodrigo Duterte appointed former Philippine Drug Enforcement Agency (PDEA) Director General Isidro Lapeña to take over the command of the beleaguered Bureau of Customs (BoC).

President Duterte’s trust and confidence in his former public safety command center chief in Davao has made him the new BoC Commissioner.

Lapeña in his inaugural speech on August 30, 2017 echoed the marching order of the President to stop corruption and increase revenue earnings—the issues which have long been haunting the bureau for decades.

To carry out the marching orders, Commissioner Lapeña rolled out his Five-Point Priority Program:

1. Stop corruption
2. Increase Revenue Earnings
3. Ensure Trade Facilitation
4. Strengthen Anti-Smuggling Efforts
5. Enhance Personnel Incentives, Rewards System and Compensation Benefits

Starting September 2017, the BoC attained an all-time high collection in the history of the bureau by collecting 40.26 billion from a monthly average collection of P35 billion. In October, the bureau collected P42.91 billion, another record high collection.

For November 2017, the BoC again recorded the highest monthly collection of P46.408 billion; during this month, the bureau collected 3.8 billion in its daily collection—a significant increase from its average daily collection of 1.8 billion. Since October last year, the bureau started to reverse the trend in its collection effort by hitting its target for said months.

The first 100 days of the Commissioner was characterized by a remarkable record breaking high streak since September when the BoC first set an all-time high monthly collection.

Action vs corruption
Commissioner Isidro Lapeña in his assumption speech kept his word to install new blood—the people who have earned his trust and confidence—and brought them to the BoC. They assumed key positions to help the new Commissioner introduce transformative measures into the agency that has been destroyed by corruptible operational processes and systemic flaws in its organizational culture. Among them are:

• Deputy Commissioner Gladys Rosales of Internal Administration Group

• Deputy Commissioner Ricardo Quinto of Intelligence Group

• Director Jeoffrey Tacio as the officer in charge of Import Assessment Service

• Director Yogi Ruiz is the new Enforcement and Security Services head

• Director Atty. Jacquelyn L. De Guzman of the Administration Office

• Agent Melvin Estoque of the Account Management Office

“To address the perennial problems that has beset the bureau for years, everyone can expect major changes in the bureau,” said Lapeña.

The Commissioner, one of the few who still believes in the integrity of the bureau employees, has given everyone a clean slate. On his first day, he announced his plans to implement the “One Strike Policy” to employees who are unwilling to heed his “No Tara, No Pasalubong, No Gift, and No Take Policy.”

During his first three months in office, a total of 186 personnel were sanctioned: 25 were relieved, 10 District Collectors were transferred to Control Monitoring Unit, and 151 were reshuffled and reassigned to provincial districts.

In line with one of the Five Point Priority Program -Stop Corruption, the Commissioner put emphasis on the following:

1. “One Assessment, No Sectioning Policy,” the dissolution of Formal Entry Division Sections to stop the “suki” system because of the alleged continued collusion of importers, brokers, and the customs employees.

2. “Anti-fixer campaign” at the Accounts Management Office

3. Elimination of the presence of duty examiners at the X-Ray Field Office

4. Removal of gatekeepers and customs police at the terminal gates of Port of Manila, Manila International Container Port, Port of Batangas, and Port of Subic

5. Instalment of additional CCTV cameras in BoC premises

6. Public awarding of the Tax Credit Certificates to its rightful owners which have long been source of ‘pasalubong.’ A total of P223.7 million TCCs were awarded during the agency’s Monday regular flag raising ceremony.

7. Mandatory five-day time frame processing of documents and permits. In response to this, the Account Management Office was able to address 1,852 backlogs in importer’s application for accreditation and renewal.

8. Strengthening of BoC-Cares—the bureau’s helpdesk which regularly receives feedbacks and inquiries from the public and stakeholders

9. Conduct of regular media briefing, which is done as a way of getting feedback to improve BoC’s systems and processes.

Increase revenue earnings
Lapeña’s main program is to focus on the revenue collection of the second highest revenue generating agency of the government. It has become his struggle to run after the P20 billion revenue deficit before his assumption in August because of continued patronization of importers and their colluded customs officials of benchmarking on the value of imported commodities. Each container is revealed to have been benchmarked to P40,000.00 regardless of the value.

In order to address the substantial gap in revenue collection, he directed the:

1. Assessment and Operations Coordinating Group to closely monitor all collection activities and to report to him the BoC performance on a daily basis.

2. Assessment Division of all ports to use correct valuation methods which will translate to higher collection figures instead of resorting to benchmarking and to screen documents submitted and to scrutinize the genuineness and authenticity of the same when processing the release of shipments with BoC.

3. Auction and Cargo Disposal Division for the speedy disposition of forfeited cargoes through the conduct of auction sale. As of December 1, 2017, the sales from auction amounted to P256.8 million.

4. Advance submission of vessel arrival schedule and stowage plans from shipping lines. This will serve as a tool for the Assessment Division personnel in addressing shipment weight discrepancies and shall enable proper assessment of shipments dutiable by weight.

5. Revitalization of the Post Clearance Audit Group (PCAG) which will give the Bureau access to a more comprehensive and holistic evaluation of the import documents necessary for the calculation of duties and taxes.

6. Conduct of an assessment examination to test the customs examiner’s and appraiser’s suitability for the job. Those who failed were immediately ordered to attend the 10-day re-orientation course for Customs Examiners on Valuation.

7. Reconstitution of the BoC TWG for fuel marking. The fuel marking system is expected to plug the P40-Billion tax leakage, dripping out of the government coffers, due to oil smuggling. The system is expected to roll out fully by the second half of 2018.

8. Establishment of Preferential Rate Unit in every port. This unit ensures that only authentic Certificates of Origin are being granted preferential rate treatments.

9. Stricter implementation of revised rules governing cancellation of the Single Administrative Document (SAD) used by importers in filing import entry was ordered by the Commissioner, to avoid abuse of the provision and ensure necessary surcharges are imposed and collected for the government.

Trade facilitation
Commissioner Lapeña ordered the abolition of the Command Center. This move has reverted the power to issue alert orders to the Customs chief, deputy commissioner of the Enforcement Group, and all district collectors.

To avoid unnecessary delay on the importers, all alert orders must be lifted within 48 hours, if perishable within 24 hours, if there is no probable cause arising in the shipment.

The Commissioner abolished the Special Studies and Project Development Committee (SSPDC) removing another layer and redundancy in the system. Its function has been reverted to the Legal Service.

All x-ray machines of BoC are up and running 24/7 as a security measure to prevent entry of contraband items. Twelve OCOM representatives were designated to check the timely conduct of examination on alerted shipments.

With the implementation of the no sectioning policy, the FED Port of Manila and MICP adopted an electronic queuing system and status verification system wherein the first come, first served basis is observed.

Strengthen anti-smuggling efforts
Another mandate of the BoC at the forefront is to curb smuggling. Commissioner Lapeña capitalized on the use of non-intrusive means to deter any entry of illegal goods pushing for the 24/7 operation of all x-ray units within the Bureau. Three new x-ray machines are installed at NAIA and 16 units are expected to be installed in 2018.

In compliance to the directive of the Secretary of Finance, the Commissioner immediately acted upon the order to strengthen collaboration of BOC with BIR through the issuance of a memorandum directing all District Collectors to coordinate with Regional Directors of BIR for the establishment of Joint Anti-Smuggling Units.

He also ordered the suspension of Green Lane selectivity to deter the use of the selectivity process as a means to smuggle illegal goods. According to the Commissioner, the suspension shall last until smuggling has been snuffed out of the system.

To enhance the Philippines’ capability in monitoring and protecting the country’s border against entry of radioactive materials, the Commissioner received from US Embassy officials 20 units of radiation detectors for interdiction and location of nuclear materials and or weapons on December 4, 2017.

As an additional security measure, a memorandum was also issued ordering the mandatory x-ray of all containerized cargoes bound to Customs Bonded Warehouse.

All shipments tagged RED was ordered by the Commissioner to undergo mandatory x-ray to further tighten the controls, he issued a directive to adjust the selectivity threshold to 80 percent RED.

The following are just a few of the apprehensions made during the first 100 days of Commissioner Lapeña as a result of the strict implementation of the bureau’s anti-smuggling measures:

• P141.2 million worth of luxury cars seized at the MICP including 12 Toyota Land Cruisers, three Range Rovers, two Chevrolet Camaro, and one unit McLaren, used Lamborghini and used Ferrari.

• P5.3 billion worth of counterfeit goods such as the P3 billion worth of cosmetic products, perfumes, and other merchandise goods busted in Tondo, Manila; P300 million worth of fake cigarettes, food products seized in warehouses in Quezon City; P2 billion worth of fake electronic goods, beauty products foiled in Binondo, Manila and; P43.6 million worth of agricultural products (rice, potatoes, carrots, onions); P215 million total estimated worth of goods seized by the Port of Cagayan de Oro including a vessel, M/V Jake Vincent Seiz; P4.6 million worth of smuggled rice busted while on transit by the BOC-Port of Davao.

Meanhwile, P71.29 million worth of illegal drugs including a 6 kilogram package seized at FedEx worth P30 million; an arrested a Columbian drug mule and intercepted an estimated P8.89 million worth of cocaine at NAIA, the turned over illegal drugs worth more than P3 million worth to PDEA; P5 million worth of shabu intercepted at FedEx NAIA; and P24.4 abortion pills busted at NAIA.

Enhance personnel incentives, rewards system and compensation benefits
To ensure that the employee’s morale is well taken care of, Commissioner Lapeña made a mark in the history of the bureau, by conducting a mass oath taking for the 567 newly promoted BoC employees.

Recognizing the need to keep the bureau personnel motivated, the Commissioner reconstituted the Program on Awards and Incentives for Excellence (Praise) Committee.

He also ordered the immediate review of the Merit and Selection Plan to align it with the new CSC policy.

To keep employees updated and enhance their knowledge on administrative principles, the Commissioner directed the conduct of an Administrative Officers Summit on November 9 to 10, 2017 to discuss and address all administrative concerns and inform them of his present thrusts and new CSC policies.

All aspects of administrative functions are being considered so that efficient service to internal clients can be rendered. Hence, the Commissioner supported the Conduct of workshop on preparation of Project Procurement Management Plan (PPMP) and Annual Procurement Plan (APP) by the Interim Training and Development Division (ITDD).

In his three months in the bureau, Commissioner Lapeña was able to visit 24 ports and sub-ports to talk with personnel and know the situation on the ground.

“It can be done. We don’t need magic. We just need to do things the right way,” the Commissioner said.


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