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Opinion: Philippines Modernisation of the Bureau of Customs — a must

| 22/11/2014 | Reply

 (The Philippine Star)

12183986-philippines-flagVery soon, various trade barriers that have been in effect for decades will no longer be there.  The ASEAN Economic Community (AEC), which will see the Philippines’ integration should be an exciting prospect for us, but are we really fully primed for it? If our business leaders see the ASEAN Free Trade Agreement as a feat, there are still other goals that we need to meet if we are truly going to be a competitive player in global trade and commerce.  The more advance trade agreements include the Regional Comprehensive Economic Partnership Agreement (RCEP) and the Trans-Pacific Partnership Agreement (TPP).  We could also eye a trade agreement with the European Union.

Recently, the Philippine Chamber of Commerce & Industry (PCCI) led by its chief operating officer Ambassador Donald Dee, Mr. Sergio Ortiz-Luis, president of Philexport and Mr. Roberto Amores, president of Philippine Food Exporters Confederation held a press conference to promote trade facilitation.  The joint exercise also had the participation of European Union Ambassador to the Philippines, H.E. Guy Ledoux who obviously wanted to promote bilateral trade relations with the Philippines and bring the Unions commercial relationship with the country to the next level.

Paramount among their concern is the modernization of the Bureau of Customs.  All the country’s business leaders are unified here — the Customs Modernization and Tariff Act needs to be passed by Congress and Senate immediately and the Bureau of Customs needs to complete its automation of customs procedures soonest. The Philippines has gained notoriety for the deep-seeded corruption in this bureau, and no matter who sits at the helm every time there is a change in administration, he is usually powerless to cleanse the agency of its deep-rooted ills. How can one man take on the system? That’s a herculean task that even the President of the Philippines cannot take on.

Ambassador Dee pointed out that the key to change is the completion of the Customs Tariff Code, which Customs Commissioner John Philip Sevilla vowed to do ASAP. Organizations like the PCCI and Philexport have been working closely with the Commissioner to have this codification finished soonest, and in return they have been lobbying hard for the passage of the Customs Modernization Act. The country has in fact cited this among its serious efforts and commitments to the WTO Trade Facilitation Agreement.

What country would want to deal with a government agency that has flexible procedures (depending on who you are dealing with)? Making trade transactions faster and more efficient with less human intervention can only yield positive results, not only making us competitive in our global trade relations but in fact yielding more revenues for this agency. The Customs Modernization and Tariff Act can achieve this.  As Ambassador Dee further pointed out, all the other related government agencies need to ensure that they are all connected to a single system.  Without this connectivity, trade facilitation may not achieve its optimum results. Incidentally, Ambassador Ledoux informed those in attendance that Commissioner Sevilla has vowed to reduce within a year the time of customs procedure to four hours, meaning cargo can be released within this short time frame. This is one big step towards efficiency in the agency.

Someone in the audience asked if it is possible to have a One-Stop-Shop at the Customs. Mr. Sergio Ortiz-Luis answered that, though the export organization has adopted this successfully, it would be more difficult for the importers to have a similar scheme because, unlike the importers, there is no revenue involved with the exporters. Besides, he pointed out, the Bureau of Internal Revenue is requiring its own accreditation on top of the Bureau of Customs accreditation, making the process even more lengthy than it already is. “They’re trying to make a One Stop Shop but it’s very difficult…. sumasawsaw lahat yung agencies and that makes it difficult,” according to Mr. Ortiz-Luis.

Another question fielded by a media representative: How are we doing as far as halal-certified food for export is concerned? Can we be already considered as a qualified exporter of halal-certified food now?”

Mr. Roberto  Amores of the Philippine Food Exporters Confederation answered on behalf of the panel and said that it is now the private sector that is taking the faster initiative to get this all-important halal certification.  At the moment, halal certification is done through different halal certification bodies, but the sad fact is our certification system is not recognized by most countries, particularly the Islamic community in the Middle East. The Indonesian exporters have their own halal certifying body like the Malaysians, which have set the standard for this certification system, and this largely Muslim country is enjoying the trade benefits. Why aren’t we a part of this?

Halal-certified products is really big business, and considering that in the region, as much as 60 percent of our neighbors are Muslims, the country should prioritize our accreditation.  We, in fact, have halal certifying bodies, but what good is this if the global community does not recognize our standards? Towards this end, the Department of Agriculture is working closely with the Department of Trade & Industry to align the country with the Malaysian halal certifying body called Jakim so we could get ourselves accredited. There is a big halal market in the Middle East and beyond and if we can get this accreditation, our food exporters can easily expand their market in the Middle East. “The limitation of the Philippine market is due to the limitation of the accreditation of the halal certifying body”, according to Mr. Amores.

Much can be achieved with the serious trade facilitation efforts that we are now seeing, thanks to our dedicated business leaders.  According to H.E. Ambassador Ledoux, our trade with the European Union last year reached $7 billion, which is quite significant, so it is imperative that we improve our trade and commerce here.  Although the kind Ambassador recognized that corruption has generally decreased in the last three or four years, the fact remains that we have not shed our notorious image, so the Customs Modernization and Tariff Act needs to be passed without delay.

And lastly, we hope we can align ourselves with Malaysia’s Jakim soonest, but let us work on our own credible halal certifying system so we can stand on our own.

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Category: Asia, Research

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