Customs reforms include tapping AI, cloud tech
The Bureau of Customs (BOC) is ramping up efforts to tap advanced digital systems, including artificial intelligence (AI) and cloud technology, as part of reforms aimed at streamlining operations and narrowing windows for corruption.
The target is to have them in place by 2027, according to Customs Commissioner Ariel Nepomuceno.
In an interview with Inquirer reporters and editors on Friday, Nepomuceno said strengthening the agency’s Customs Processing System (CPS) is at the center of the BOC’s transparency initiative.
“Our system will ask for digital submissions of documents. [They] will upload scanned copies, and the system will automatically provide the computations,” he said.
CPS is a unified platform that will consolidate key customs procedures into a single, automated system. The idea is to provide importers a level of customer experience that would feel as easy as “going to an ATM,” Nepomuceno said.
Formerly an assistant commissioner, Nepomuceno was appointed to helm the BOC in June last year.
Among his first marching orders from President Marcos was to fast-track the bureau’s digitalization program that started in 2021.
Public-private partnership
Nepomuceno said the CPS is aimed at automating customs declarations, risk assessments, payments and other core services of the agency into a fully paperless system.
Import validations, for example, will be done with the help of AI.
The system will be implemented through the help of a public-private partnership (PPP) proponent, he said.
According to data from the PPP Center, the project is estimated at P742.49 million under a proposed joint venture involving ADR Holding Corp., Ascent Solutions Philippines Inc., JAMC Holdings Corp., Omniprime Marketing Inc. and AMS Holding Inc.
Nepomuceno said the transaction fee of P700 per import entry, which was initially suggested by the proponents, has been reduced to P330 in the course of BOC’s continuing negotiations with these partners.
He said that by June or July, the project will undergo a Swiss challenge, or the procurement procedure of allowing an unsolicited proposal that can match other subsequent proposals.
Vetting the imports
Once awarded, the CPS is expected to take about six months to design and develop, with pilot rollout targeted in the first quarter of 2027.
“Assuming there is no legal impediment or burden, we’re confident that it will really happen. We really need the current PPP proponent,” the customs chief said.
In vetting the validity of imports, AI would be able to raise red flags if companies, for instance, attempt to change their names and other information that it had not registered.
The system can analyze recurring patterns, such as identical trade routes or a similar packaging by the same supplier.
“The accreditation should already be AI-driven, together with risk management and post-clearance,” Nepomuceno said.
The bureau also plans to upgrade its X-ray inspection systems and integrate them into a centralized cloud platform to prevent image tampering.
Nepomuceno cited an incident wherein a shipment declared as a Ford Raptor turned out to be a luxury sports car.
“Our X-rays should be updated enough. What is seen in the examination area should be viewable in real time and recorded in the cloud,” he said. “If there is a complaint, you cannot bribe your way out because the record is already in the cloud.”
While awaiting the CPS rollout, he said the BOC will pursue, for the meantime, “low-hanging fruits” among its reforms to help improve ease of doing business and transparency, such as extending accreditation validity to three years and establishing a “large importers division” to better serve those stakeholders.
Other proposals
Also in the pipeline is a preshipment survey mechanism intended to add another layer of protection against misdeclaration and smuggling.
Under that proposal, accredited international inspection companies—such as Switzerland-based SGS (Societe Generale de Surveillance)—would certify cargo contents in the country of origin before shipment.
The verified cargo information would then be transmitted in advance to the BOC, so it knows what imports the containers hold before their arrival.
But some foreign exporters are reportedly questioning that system and pointing out that mandatory preshipment inspection could be seen as being inconsistent with free trade agreements.
Another proposal, this time by a consortium of SGS, is a planned rollout of the Cross-Border Electronic Invoicing Project, which would make it harder to alter declarations after shipment. PPP documents show the estimated value of the project is P4.79 billion.
Digital invoicing may be implemented soon, as the Inquirer had reported in December. The system will allow verified and registered foreign exporters to generate invoices through a single electronic platform.
The BOC so far already has three digital systems in place—the ePay Portal for the payment of duties and other fees, the “Isumbong kay Commissioner” platform for addressing complaints, and the Online Tax Estimator. Nepomuceno said his agency’s digitalization efforts must be sustained to ensure transparency in its services.
