Digitalization, engagement seen helping rebuild trust in Customs

By Aubrey Rose A. Inosante, Reporter

THE Bureau of Customs (BoC) said digitalization and consistent engagement will be key to regaining the trust of businesses, which had been damaged by the alleged misuse of the tax audit process.

Customs Commissioner Ariel F. Nepomuceno told BusinessWorld in December that he is pursuing full automation to minimize opportunities for corruption.

“To regain the public trust, our services will be brought up to global standards, which means (BoC) should be fully automated,” he told BusinessWorld in December.

Mr. Nepomuceno, appointed commissioner in late June, said restoring confidence also requires continuous outreach to stakeholders, apparently addressing the conclusions contained in a US State Department report.

In September 2025, the State Department Investment Climate Statements report said the BoC is “still considered one of the most corrupt agencies in the country,” and noted that corruption remains a significant barrier to attracting investment.

The report added that the US embassy received multiple reports from US firms of overly invasive searches, inconsistent customs charges, and solicitations of “facilitation fees” from agency officials.

“We engaged with the American Chamber of Commerce even before the report was released. We reached out. When they were here, they raised no complaints, so we were puzzled,” he said.

In a meeting, he said some of the issues were raised by the US Embassy attaché team. One complaint involved foreign vessels laying cables on the seabed, which were taxed even though they had no intention of operating in the Philippines.

“The issue was resolved even before that report came out. We had recommended that it should not be taxed since there was no intent to operate locally — although the vessels were in Philippine waters,” Mr. Nepomuceno said.

Another concern involves Astrophysics, Inc., a supplier and maintainer of X-ray scanners to the BoC, which posted unpaid claims of about P54 million, he said.

“If the contract says you must pay, then you pay. Services rendered should be compensated. I will assume a presumption of regularity that the contract is valid, so we have to pay. But what can you do if there is no contract?” he said.

He noted that any services rendered must be filed formally as a money claim and approved by the Commission on Audit before Congress can allocate funds.

Mr. Nepomuceno said government funds cannot be disbursed without a valid contract authorizing payment for services. He added, however, that the claim should be given the benefit of the doubt and treated as a “challenge” for the agency.

The European Chamber of Commerce of the Philippines (ECCP) also released a report that said among companies engaged in trade, 18% described Customs procedures as speedy and efficient; 48% said they were acceptable but needed improvement, while 34% found them burdensome.

ECCP represents more than 900 member companies.