Philippines Country Profile

Customs Administration

Individual Corruption

Global Integrity 2008 reports that citizens perceive customs to be just as corrupt as the tax authorities, making the Bureau of Customs one of the most corrupt state agencies. This perception is supported by publicised cases of customs officials being directly involved in smuggling.

Business Corruption

According to Global Integrity 2008, companies are dissatisfied with customs officials due to the fact that customs and excise laws are frequently enforced discriminatorily. One-fourth of the companies surveyed by the Social Weather Stations Business Survey on Corruption 2007 stated that they had been asked for bribes when dealing with import requirements. The forms of corruption most commonly encountered within the Bureau of Customs (BOC) are bribery and tariff evasion. The charge that the BOC is one of the most corrupt government bodies is further substantiated by figures from the Transparency International Bribe Payers Index 2008.

Customs regulations are complex and burdensome. Companies are left with a feeling of considerable uncertainty. Companies should be aware that the Philippines' customs authorities are also suspected of colluding with technical smugglers. According to UPI Asia, technical smuggling is rampant in the Philippines and costs a loss of USD 4 billion in revenues each year. The same source also states that customs authorities, government officials and the First Gentleman allegedly collude with illegal smugglers.

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 for the actions of its Philippine partner.

Frequency

The World Bank & IFC: Doing Business 2010:
- A standard export shipment of goods requires 8 documents and takes 16 days at an average cost of USD 816 per container.

- A standard import shipment of goods requires 8 documents and takes 16 days at an average cost of USD 819 per container.

World Economic Forum: The Global Competitiveness Report 2009-2010:
- Business executives give the level of efficiency of customs procedures (import and export) a score of 3 on a 7-point scale (1 'extremely inefficient' and 7 'extremely efficient').

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.