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The Philippines has made significant progress in implementing paperless trade but more effort is needed in enhancing the paperless trade environment, according to a UNESCAP study
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“The Philippines is technically and legally ready to exchange electronic data across borders with partner economies,” said the National Feasibility Study on Cross-border Electronic Exchange of Trade-related Data
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Challenges, however, hamper digitalization of trade processes
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These include lack of standardized data formats and interoperability among different trade-related systems across government agencies
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Passing a law that covers digital data governance and paperless trade should form part of the continuous improvement of BOC core processes, the study said
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Also recommended was a harmonized legal and regulatory digital data environment at the national level
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The study also pushed the development of an Authorized Economic Operator program for SMEs
The Philippines has made significant progress in implementing paperless trade and trade digitalization although more effort is needed in enhancing the paperless trade environment, according to a feasibility study by the Bureau of Customs (BOC) and United Nations (UN) Economic and Social Commission for Asia and the Pacific (ESCAP).
The National Feasibility Study on Cross-border Electronic Exchange of Trade-related Data and Documents said challenges exist that hamper the digitalization of trade processes, such as the lack of standardized data formats and interoperability among different trade-related systems across government agencies.
The study released on September 4 assesses the feasibility of implementing electronic exchange of trade-related data and documents between the Philippines and potential partners in the Asia-Pacific region. It included results from surveys from five key categories of actors involved in the end-to-end cargo clearance process: the National Trade Facilitation Committee (NTFC), BOC, trade regulatory government agencies (TRGAs), and economic operators.
As the private sector has transformed itself with digital technologies, expectations for the government to follow suit have also increased, the study said. Through various policies, regulations and measures that have been established for paperless trade, “the Philippines is technically and legally ready to exchange electronic data across borders with partner economies,” it said.
According to survey responses from BOC officials, most of the core customs operations are already digitalized, except for a few processes that are still manual.
“The implication of this is that a company conducting trade should be able to clear its goods shipment without having to physically visit Customs offices,” the study said.
It added, however, “it is not so straightforward in practice” as there are still manual processes in the application of permits, licenses, and certificates from the TRGAs.
“Thus, only freely importable items, goods that may be freely imported to the Philippines without the need for import permits, clearances or licenses, can be cleared paperless,” the study said.
Based on a survey with various concerned government agencies and private stakeholders, there is a “clear need” is for systems of BOC and TRGAs “to be made more interoperable and integrated, which would especially benefit SMEs [small and medium-sized enterprises] as the easing of trade processes are expected to impact their operations and service delivery disproportionately.”
“More seamless trade processes should also enable SMEs—which accounts for 99.5% of firms and a key focus of the Philippine economy—to better expand their markets, which in turn is a boost to the national economy.
Moving forward, the study recommends several actions as the Philippines continues to advance its capabilities in cross-border paperless trade.
“Enhancements in these areas would be beneficial to current and future initiatives on electronic exchange with partner economies, including the exploring of possible pilots with potential partners using particular documents, as identified in this study,” it added.
As the BOC continues in advancing its digitalization efforts, the study suggests the NTFC take the lead in coordination and outreach activities, with the support of partners and donors, in making trade procedures as efficient as possible.
To sustain the country’s digitalization initiatives, the study said it is essential to build capacity among stakeholders, especially SMEs, which often lack knowledge and expertise of the topic, and are often not able to maximize the advantages of going paperless.
Passing a law that covers digital data governance and paperless trade should also form part of the continuous improvement of the BOC core processes, the study said.
Moreover, it recommends the use and enhancement of the NSW platform, benefits of which are “extensive.” It noted, however, that BOC should “recognize that the TRGA actors and entities involved in the NSW could have different or differing mandates, viewpoints, expectations and capabilities. Hence, the complexities of required essential legal and operational areas that might arise among different actors need to be systematically factored into the development and enhancement of the Philippine NSW system, such as when it comes to electronic signatures and messaging guidelines.
“To ensure the effectiveness of cross-border digitalization initiatives, in relation to the NSW, reforms in the governance system and other relevant areas should be in line with international best practices,” the study said.
In addition, a harmonized legal and regulatory digital data environment at the national level is recommended, playing a key role in generating trust from economic operators and the government agencies themselves.
While the Customs Modernization and Tariff Act provides the legal foundation for inter-agency information sharing, there are still many areas to be improved and considered, especially for the purposes of supporting paperless trade, the study said.
Customs and TRGAs should also be encouraged to set up their “Identity Management System,” which would provide a unique reference number for actors and entities, covering authorization and authentication.
The study also recommends leveraging on modern technology and promoting its use. In line with the ASEAN Digital Innovation Initiative, the Philippines is also encouraged to set up a digital innovation forum, to create avenues for businesses that have embraced industrial 4.0 technologies to share with SMEs their learning experiences on improving productivity and logistics capabilities.
Lastly, the study suggests developing an Authorized Economic Operator (AEO) program for SMEs. The AEO Program represents a customs-to-business partnership that seeks to enhance international supply chain security and facilitate movement of legitimate goods.
The feasibility study falls under the UN Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific (CPTA) and complies with the directives of both the Standing Committee and the Paperless Trade Council of the Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific.
The Philippines in December 2019 acceded to the CPTA, which aims to promote cross-border paperless trade by enabling the exchange and mutual recognition of trade-related data and documents in electronic form and facilitating interoperability among national and subregional single windows and/or other paperless trade systems. – Roumina Pablo
READ: PH study on electronic cross-border trade data exchange out soon
