Customs Delay in the Philippines: Why Does It Happen?

by Sharon Jones

Screen Shot 2019-07-11 at 10.27.17 PM.png

There’s no better time to invest in the Philippines than today. Metrobank Group, the investment component of the bank, forecasts its gross domestic product (GDP) to grow up to 6.5% by the end of 2019. This is after falling to 4% during the first quarter of the year. This alone can potentially attract more foreign investments. Forbes, meanwhile, ranked the country on 24th when it comes to the best place to live and work. It just trailed behind the United States and placed higher than China.
BSP Governor Benjamin Diokno also revealed the Philippines might be in the Goldilocks phase, which means it has the right combination of high growth and low inflation rate. All these imply consumer spending could rise in the coming years. If there’s one thing that can prevent you from taking advantage of that, it will be customs clearance.

The Problems in Customs

Like in other countries, your products would need to go through customs clearance for appropriate taxes and monitoring. It doesn’t matter whether you’re a private individual or a business. Customs clearance, however, is complex; and working with a customs brokerage in Manila is the right strategy to deal with it. The clearance process can take days and sometimes even months. It can be due to the following factors:

  • A Lack of automation – Philippine Customs deal with loads of cargo carrying a wide variety of products, and yet it still needs to automate certain areas of its processes to streamline its activity. Compounding that is not enough people to deal with the workload, especially during the holidays.

  • Bad weather – The Philippines can have terrible weather conditions, especially during the rainy season, which runs from June until February. According to Customs in 2018, bad weather can prevent vessels from berthing or unloading their goods.

  • Corruption – The lack of automation means goods interact more frequently with humans, and that can increase the likelihood of fraud in many forms. Illegal smugglers can cooperate with inspectors and officers while other businesses might have no other option than to work with fixers to speed up the release of the goods.

  • Other Agencies – Your goods pass through various Philippine agencies such as Philippine Ports Authority and International Container Terminal Services. You will also find administrative offices around the country. These agencies can also lead to customs clearance delays.

Screen Shot 2019-07-11 at 10.27.29 PM.png
  • Misleading or Lack of Papers – You need to have the correct requirements. Otherwise, if Customs suspects you did not declare the truth, it can withhold your cargo for a more thorough inspection.

  • Port Congestion – The Philippines does have many ports and airports, but they might still not be enough to accommodate the growing number of shipments in the country. During peak seasons, such as the holidays, port congestion does occur. What could have been a three-day delivery service can extend to a full week or even longer.

Customs are taking the right steps to correct these issues, including investing in its automation and fighting against corruption. The country is also pouring a lot of money on its Build, Build, Build program to improve its current infrastructure and network.

But you also need to do your share. That includes making sure you have the right documents with the correct information, as well as remain in compliance with the customs regulations.