GRACE POE's TRANSCRIPT PORTION ON BOC
DBCC briefing on the proposed 2021 National Expenditure Program
Sept. 10, 2020

Sen. Grace Poe: Next, I would like to ask about the sources of income of the government. Obviously, right now, we're strapped because there's not too much economic activity going on as compared to this time last year and the years past. But during the last DBCC briefing it was pointed out that the Bureau of Customs was losing billions for years from technical smuggling. One of the solutions to this was to eliminate human intervention and fully automate the system of BOC. Last year you said you need P6 billion in a span of five years to do this. May I ask for an update, maybe from the Department of Finance when it comes to automating the Bureau of Customs?

DOF Sec. Carlos Dominguez: Yes, Ma'am, may I hear the question again? I just arrived from...

Poe: It's okay...my question is...the premise is, of course, we are looking for added revenue sources of income for the government to support our projects, and one of the things that were discussed during the last DBCC hearing is that the Bureau of Customs should be automated so that we can lessen human intervention and there was an allotment of a certain amount, P6 billion over five years. I'd like to know what is the progress of automating and lessening human intervention in the BOC?

Dominguez: The automation efforts in the BOC actually started around 2010. However, it has run into a lot of problems including lawsuits that have slowed down the automation project. I mean, there was a lawsuit filed by one of the bidders and it really stopped the progress. However, we are determined to modernize and digitize the operations of the Bureau of Customs as much as possible. And we even have a project already now that's to be financed by a foreign loan moving forward the digitization of the Bureau of Customs, Ma'am. I can provide you the details in writing.

Poe: Thank you, sir. Actually you have been very good in updating all of us. I just want to ask who would be the point person in charge. From the Department of Finance, obviously you have the BOC commissioner...from the Department of Finance, who is overseeing the digitization of the BOC?

Dominguez: The undersecretary of the ROG [Revenue Operations Group], who is Antonette Tionko and she is assisted by Assistant Secretary Dakila Napao. And both of them are assigned to this project to oversee it from our part. We also have on the IFG, the International Finance Group, Undersecretary Joven and Assistant Secretary Tan, who are working on the financing of this project.

Poe: Thank you, Sir. So, during the budget deliberations, I would like to request Usec. Antonette to give us a thorough update and also a background on the laws to be filed again. If we had done that, maybe we could have put in a provision in the Bayanihan 2 about the BOC. We put in so many provisions in there that are from different departments but I know that, was it Usec. Antonette who gave us a very good revenue collection from the GOCC...at least we are confident that there is somebody with good leadership at the helm.

...

Poe: Actually, just a reminder, in 2019 the BIR and the BOC failed to meet their targets. For the BIR, they failed to meet their target by P95.867 billion. And for the BOC, they failed to meet their target by P30.73 billion. I'd like to ask Secretary Dominguez if these are correct figures?

Dominguez: I don't have the exact figures in front of me, ma'am, but they achieved pretty close to 95 percent, both of them. That's�actually for me, anybody who hits 95 percent of their target is not so bad.

Poe: Considering the historical figures that we've been getting, 95 percent seems very promising but the remaining five percent is yielding still a staggering amount that we haven't collected, which could also help us further our government support for programs that the administration is trying to goal. Am I correct?

Dominguez: Yes, ma'am. In setting targets, the DBCC looks at two aspects: One is what is reasonably attainable; and a little bit of a stretch so that there is some incentive and effort on the part of the revenue agencies. So I think the difference was the stretch portion. Let me just point out that in 2019, this is where we collected the highest amount of taxes as a percentage of GDP in 22 years. True, we should have collected a little more, but considering the historical performance, it's not so bad. I'm not saying it couldn't be better. But actually, they have a passing grade.

Poe: Okay, it's good to know that that you pointed it out. I'm sure that we can look forward to...if we have digitized it might be even better and that's a win for all of us.

Dominguez: Absolutely.