Individual Corruption

The Bureau of Customs (BOC) in the Philippines is riddled with corruption, as reported in a 2010 news article by Philippine Public Transparency Reporting Project. The same view is also shared by numerous sources, such as Transparency International’s Global Corruption Barometer 2010, in which half of surveyed households who had contact with the customs administration throughout 2009 report to have paid a bribe.

Business Corruption

Nearly one-third of the companies surveyed by the Social Weather Stations' Business Survey on Corruption 2008 stated that they had been asked for bribes when dealing with import requirements. Importers also seek to bribe their way through the process to save time and to reduce costs, according to a 2010 news article by Philippine Public Transparency Reporting Project. The charge that the BOC is one of the most corrupt government bodies is further substantiated by figures from the Transparency International’s Bribe Payers Index 2008. Furthermore, the surveyed business executives in World Economic Forum Global Enabling Trade Report 2010 rate the transparency of the border administration, in relation to irregular payments in export and imports as relatively low, constituting a competitive disadvantage for the country.

An example of a corruption case in relation to customs, according to AmCham Vietnam 2008, is that of a Philippine shipping company, controlled by a US shipping company, which had bribed the BOC in order to allow the company to violate customs regulations, settle customs disputes to its advantage, and other types of customs fraud. The US company was punished in the US under the Foreign Corrupt Practices Act (FCPA) for the actions of its Philippine partner.

Political Corruption

The Philippines' customs authorities are also suspected of colluding with technical smugglers. According to a 2008 article from UPI Asia, technical smuggling is rampant in the Philippines and costs an estimated loss of USD 4 billion in revenues each year. The same source also states that customs authorities, government officials and the former First Gentleman, Jose Miguel Arroyo, allegedly collude with illegal smugglers.

According to a 2010 article from Inquirer, the so-called 'revenue corruption', which refers to smuggling, tax evasion and undervaluation of imported goods, is pervasive in the Philippines.

Frequency

The World Bank & IFC: Doing Business 2011:
- A standard export shipment of goods requires 8 documents and takes 15 days at an average cost of USD 675 per container.

- A standard import shipment of goods requires 8 documents and takes 14 days at an average cost of USD 730 per container.

World Economic Forum: The Global Enabling Trade Report 2010:
- Business executives give the efficiency of customs administration (burden of customs procedures) in the Philippines a score of 3 on a 7-point scale (1 'extremely inefficient' and 7 'extremely efficient').

- Business executives give the transparency of border administration (irregular payments in exports and imports) a score of 2.4 on a 7-point scale (1 'not transparent' and 7 'transparent').

Transparency International: Global Corruption Barometer 2010:
- 50% of households who had contact with the customs administration throughout 2009 report to have paid a bribe.

The World Bank & IFC: Enterprise Surveys 2009:
- Approximately 19.4% of the companies surveyed expect to give gifts in order to obtain an import licence.

Transparency International: Bribe Payers Index 2008:
- Business executives give customs a score of 4.4 on a 5-point scale (1 'not at all corrupt' and 5 'extremely corrupt').

Social Weather Stations: Surveys of Enterprises on Corruption 2008:
- Business executives give the Bureau of Customs' sincerity in fighting corruption a net score of -72 (above +50 'very good' and below -50 'very bad').

- 31% of the surveyed business executives had been asked for a bribe when complying with import regulations including payment of import duties in 2007.