How legal red tape sunk Customs reform

When the World Bank released its "note on cancelled operation" document on the Philippines Customs Modernization Project last week, it did more than formally close the books on an $88.28-million loan.

- BEN ARNOLD DE VERA

The document read like a rare institutional post-mortem, spelling out not only why the project collapsed but also what the Washington-based multilateral lender says it learned from a reform effort that never truly left the runway.

The project, approved in October 2020 at the height of the Covid-19 pandemic, was designed to improve the efficiency of the Bureau of Customs (BOC)-the country's second-largest revenue agency and reduce trade costs, in line with the government's broader agenda of trade facilitation and institutional modernization. It became effective in January 2021, and was officially launched in March 2021, with the ambition of transforming the BOC into a more modern, transparent, and technology-driven agency. At the heart of the program was the planned rollout of a new customs processing system (CPS), complemented by upgrades in information and communications technology (ICT), enterprise systems, and risk-based compliance tools.

However, Manila Bulletin first reported in December 2024 that the World Bank had scrapped the loan after years of delays, unresolved legal problems, and minimal disbursements.