ON Wednesday, June 17, The Manila Times editorial called attention to the continuing non-implementation of two key programs by the Bureau of Customs (BOC) that are intended to curb smuggling and improve the efficiency of import processing. Despite a deadline of on or about June 3 of this year for the programs to be in place, they are not, with the thoroughly predictable result that smuggling is still rampant, particularly for agricultural products. The seizure of some P34.5 million in smuggled onions and garlic in a warehouse in Nueva Ecija at the end of last month highlighted this fact.
At this point last year — it was actually around the third week of July — then-newly appointed BOC Commissioner Ariel Nepomuceno said that, “As part of its broader reform agenda, the BOC is also studying the possible adoption of a Pre-Shipment Survey mechanism. This proposed measure would require goods to undergo inspection and verification before leaving the exporting country. While the concept is still under evaluation, it is being considered as a potential solution to address issues of misdeclaration, under-declaration, and technical smuggling before the goods reach Philippine shores.”
That set me off, because it was my understanding that the adoption of the pre-border technical verification (PTV) and cross-border electronic invoicing (CEI) programs was a mandate and not something to be “studied,” nor a “concept” to be “considered” as a “potential solution.” The implementation of the programs was a legal directive from the president in Administrative Order (AO) 23 issued on or about May 19, 2024, which specified that PTV and CEI should be operational in “two years from the effectivity of this order,” or June 3 or 4 of this year.
The specific details about how to implement the PTV and CEI programs were set forth in the Department of Finance’s (DOF) Joint Administrative Order (JAO) 001-2025, which was countersigned by six other Cabinet departments, as well as the Philippine Chamber of Commerce and Industry and the Chemical and Pharmaceutical Industry Organization of the Philippines. It was issued, after the usual public consultations and publication requirements were met, in January 2025, long before Nepomuceno took the helm at the BOC. Thus, as I wrote last year, “the new BOC commissioner need not trouble himself with the time and effort to evaluate a concept, but simply needs to implement the directives of AO 23, which, not to put too fine a point on it, were already a standing order from his boss before he took the job.”
To be fair to Nepomuceno, he did turn out to not be as big a stick in the mud as I thought from his first impression. I have since heard, even as long as a year ago, that the BOC is on board with the initiative, and that its only concerns that might delay things on its end were largely organizational. These were described as the BOC’s needing to upgrade its computer systems to effectively manage the programs and to orient its personnel — things that are not impossible by any means, but just require resources and effort.
Great resistance
Beyond the BOC, there was a great deal of resistance to the implementation of the two programs, and this is where things become frustrating on a level even more fundamental than the regulation of imports. The DOF provided a period of about six months for stakeholders to comment on the planned implementation of PTV and CEI — about two months between the effectivity of AO 23 and the formulation of the first draft of JAO 001-2025, and four months between the release of that draft and the signing of the final version in January 2025. Yet those who were strongly opposed to it — including, but not limited to, the Joint Foreign Chambers of the Philippines and the United States government — made the loudest noise about it after that process was entirely complete and JAO 001-2025 was technically already in effect.
By that point, applicants for accreditation to provide the PTV services had already been invited, and tender fees paid by them, the BOC was already carrying out management adjustments in anticipation of using the new systems, and regular exporters were being advised on the upcoming changes. Then everything ground to a halt; the prospective PTV service providers were informed around mid-June 2025 that JAO 001-2025 was “on hold” for revisions.
Even then, there was still nearly a year before the deadline set by AO 23 to get the job done, and initially, there were some efforts in that direction. Sometime in July 2025, I attended a roundtable put on by the Joint Foreign Chambers where questions and concerns about the new programs were aired by a variety of stakeholders. After that, however, the matter seemed to be left to die on the vine.
As a result, the BOC is finding warehouses full of smuggled onions. Good for them for being able to carry out what enforcement efforts they can, but one has to wonder how many other warehouses full of smuggled goods escape notice.
Here is where the problem goes beyond the failure to implement new Customs procedures. AO 23 was never amended to change the implementation deadline, and it was an order, not a suggestion. That order has now been violated, and where are the consequences or the corrective action? There are none, and this is a disturbing pattern seen time and time again across many different sectors. There is no consistency of governance, nor respect for rules, and the failure to enforce that comes from the very top. What is a potential investor, a prospective service provider, supposed to think? Those that bid their services for the PTV program did so in good faith and have been rewarded with silence in return. This time, it’s a Customs program; next time it will be something else, but the pattern will remain the same. And for all government’s paeans about improving “ease of doing business,” there is no tangible sign that pattern will change anytime soon.
ben.kritz@manilatimes.net
Bluesky: @benkritz.bsky.social
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