Philippines wages a all-out war against crooked customs agents

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The Heavy Demand On The Shipping Yard in Manila, Philippines – A Mess to Clean up the Corruption for Sevilla

John Sevilla said: “I’ve never seen anything like it,” commenting on a culture of bribery, extortion and stealing at the customs agents, docks and levels of government that collects revenue for the nation’s budget.

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The Philippines President, Benigno Aquino has waged war on the issues on graft within his very own government. The task, to say the least – has been overwhelming and for those like John Sevilla, “the task is one of the longest, hardest uphill battles that he has ever seen.”

“There’s no secret about the fact that this is not an agency which inspires a lot of trust and confidence among our people,” said Sevilla.

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But Sevilla, a former Goldman Sachs executive, has bold plans for systemic change that are showing early signs of success.

“Where do these people get the gall,” Aquino said in his annual State of the Nation address, as he accused customs staff of “heedlessly permitting the smuggling of goods, and even drugs, arms and other items.”

Aquino appointed Sevilla to head the bureau in December, 2013 after openly and frankly telling the customs personnel they are officially ‘enemy number one.’

President Aquino said that customs personnel cost the economy of the Philippines over 200 billion pesos, or about $4.6 billion dollars, in lost revenue for 2013.

Sevilla is being lauded for his accomplishments heading the new bureau that is overseeing the graft issues. He has been well regarded for his position in Goldman Sachs (Hong Kong) and Standard & Poor’s (New York) and his accomplishments in both those positions.

“I was not prepared for this. I was not prepared to come into customs at all,” said the 45 year-old Sevilla. He also noted in his recent tour of the customs in manila alone, pointing out that only 0.1% of the containers are being inspected. He also noted that ‘officials take bribes to assess lower taxes and use their position to extort money from importers’ and that in itself is the major problem here.

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The Port in Manila and the Ongoing Corruption Issue of the Philippines

Customs collectors earn an equivalent of $1,140 to $1,600 a month, but their jobs are highly sought after due to the opportunities for corruption they offer. Sevilla said that bribery is so rampant and well-known that the corrupt traffic police regard customs officers as great targets for bribery too, sort-of-a catch-22 scenario.

“The police will say your racket is even more lucrative than ours, so you must pay up,” he said.

So far Sevilla has placed 65 customs personnel under investigation for import transactions that seamlessly, well,  don’t add up.

Over 3,600 people oversee the bureau, but Sevilla said he needs to add at least 1,000 others to bring his new customs agents into his realm of reality. His plan is to rotate the members so that they are unable to create a tightly woven network and build their own little empire of corruption.

He also noted that overhauling the agency,  he must overhaul the entire computer network and bring it into the 21st century.

“It’s very important to show we are not trying to hide something,” he said.

He is also using IT to detect fraud and other forms of misconduct within transactions.

“It’s very transactional, so to monitor whether we’re doing our job properly we really need to drill down to the level of individual import transactions,” said Sevilla.

Victor Abola, programme director for strategic business economics at the Manila-based University of Asia and the Pacific, said Sevilla was on the right track.

“I think he’s a credible customs collector,” Abola told AFP.

But he said that with Aquino limited by the constitution to serving a single term of six years, reforms need to be “institutionalized” to withstand any potential backsliding under a new president from 2016 and on.

“No president can just appoint one person and expect him to do wonders, Abola said. ”There’s no silver bullet.”

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