The World Bank Implementation Status & Results Report Philippines Customs Modernization Project (P163428) Philippines Customs Modernization Project (P163428) EAST ASIA AND PACIFIC | Philippines | Finance, Competitiveness and Innovation Global Practice | IBRD/IDA | Investment Project Financing | FY 2021 | Seq No: 2 | ARCHIVED on 23-Nov-2021 | ISR48638 | Implementing Agencies: Bureau of Customs, REPUBLIC OF THE PHILIPPINES Key Dates Key Project Dates Bank Approval Date: 27-Oct-2020 Effectiveness Date: 28-Jan-2021 Planned Mid Term Review Date: 12-Apr-2023 Actual Mid-Term Review Date: Original Closing Date: 30-Jun-2025 Revised Closing Date: 30-Jun-2025 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective is to improve the efficiency of the Bureau of Customs and reduce trade costs. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Component 1. Modernization of Customs Operations:(Cost $84.25 M) Component 2. Organizational Development:(Cost $11.50 M) Component 3. Project Management and Implementation Support:(Cost $6.58 M) Contingency:(Cost $2.05 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions This is the second ISR for the Project since the Project became effective on Jan. 28. 2021 subsequent to the Board approval on October 27, 2020. This reports the findings of the Second Implementation Support mission for the PCM Project that took place from October 27-29, 2021. During the mission, the team reviewed the overall progress since the Board approval and reviewed the technical, fiduciary, and social and environmental safeguards areas of support. The Bank team provided just-in-time technical support to BOC to expedite implementation. The BOC team has made good progress in advancing towards implementation. This includes: 1. Inaugural Meeting of the Project Steering Committee (PSC). The Joint Memorandum Circular (JMC) that provides the legal underpinning for establishment of the PSC was signed on October 18, 2021. The inaugural meeting of the PSC was held on October 28, 2021, with participation from the BOC, Department of Finance, Department of Trade and Industry, Department of Agriculture, Department of Budget and Management, Philippine Ports Authority, Philippine Economic Zone Authority, and the World Bank. The meeting highlighted the 11/23/2021 Page 1 of 7 The World Bank Implementation Status & Results Report Philippines Customs Modernization Project (P163428) critical importance of the inter-agency PSC to provide overall strategic guidance to the project team and to help coordinate trade facilitation reforms that are beyond Bureau of Customs’ mandate. 2. Completing the procurement of the Project Supervision and Quality Assurance (PSQA) consulting firm. The PSQA is a critical first procurement that will jumpstart the implementation of the Project including other key procurements. Progress on this critical first procurement has been slower at the beginning than initially envisaged partly due to BOC’s lack of familiarity with the Bank’s procurement rules and process systems. At the time of the mission, the combined Technical and Financial Evaluation Report has been completed and the recommended firm will be invited for contract negotiations early November. It is expected that the contract will be signed in December and the PSQA firm will be on board by January 2022. 3. The first withdrawal representing the initial advance to the Designated Account has been disbursed. This initial advance is expected to fund the incremental operating costs (IOCs) for the project. 4. The Grievance Redress Mechanism (GRM) systems based on existing Customs feedback systems have been modified to allow for the Project related data collection and complaints' resolution from relevant stakeholders. Moving forward, the project teams will focus on the completion of the bid documents for the procurement of the Customs Processing System, the Administrative Back-office Enterprise Resource Planning system and Remote Image Analysis Center feasibility study. Further, in light of the discontinuation of the Doing Business (DB) Report, the Bank team discussed options for replacement of indicators. This would entail project restructuring. The current PDO indicators designed to measure improvement in the efficiency of Customs and the reduction of trade costs are based on the Trading across Borders time and cost estimates drawn from the annual Doing Business Indicators. The team has initiated the discussion to use data drawn from the Time Release Study to find appropriate indicators. Additional discussions with the BOC will need to be conducted to finalize the baselines and targets, given that many of the procedures for cargo clearances are outside the direct mandate of the Bureau of Customs. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance High Substantial High Macroeconomic Moderate Substantial Substantial Sector Strategies and Policies Substantial Moderate Moderate Technical Design of Project or Program Moderate Moderate Moderate Institutional Capacity for Implementation and High Substantial Substantial Sustainability Fiduciary High Substantial Substantial Environment and Social Moderate Moderate Moderate Stakeholders High Substantial High Other -- -- -- Overall High Substantial Substantial Results PDO Indicators by Objectives / Outcomes Improve the efficiency of Customs IN01050785 11/23/2021 Page 2 of 7 The World Bank Implementation Status & Results Report Philippines Customs Modernization Project (P163428) ►Time to import: Border compliance (Hours, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 120.00 120.00 120.00 80.00 Date 31-Oct-2019 21-Apr-2021 21-Apr-2021 30-Jun-2025 The time for border compliance includes the time for obtaining, preparing and submitting documents Comments: during port or border handling, customs clearance and inspection procedures. IN01050827 ►Time to export: Border compliance (Hours, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 42.00 42.00 42.00 30.00 Date 31-Oct-2019 21-Apr-2021 21-Apr-2021 30-Jun-2025 Same as above. Comments: Reduce trade costs IN01050826 ►Cost to export: Border compliance (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 690.00 690.00 690.00 500.00 Date 31-Oct-2019 21-Apr-2021 21-Apr-2021 30-Jun-2025 Cost for border compliance includes the cost for obtaining, preparing and submitting documents during Comments: port or border handling, customs clearance and inspection procedures. IN01050828 ►Cost to import: Border compliance (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 456.00 456.00 456.00 300.00 Date 31-Oct-2019 21-Apr-2021 21-Apr-2021 30-Jun-2025 Comments: Same as above. Overall Comments PDO In light of the discontinuation of the Doing Business (DB) Report, the Bank team discussed options for replacement of indicators – which would also entail project restructuring. The current PDO indicators designed to measure improvement in the efficiency of Customs and the reduction of trade costs are based on the Trading across Borders time and cost estimates drawn from the annual Doing Business Indicators. The BOC has agreed to a Project restructuring to replace the DB PDO indicators. The team has initiated the discussion to use data drawn from the Time Release Study to find appropriate indicators. 11/23/2021 Page 3 of 7 The World Bank Implementation Status & Results Report Philippines Customs Modernization Project (P163428) BOC has committed to continue the annual calculation of the TRS statistics in support of project monitoring. They have also offered the use of alternative measures, such as the TRS from the port of Batangas, as a means to capture the national performance of the BOC. Additional discussions with the BOC will need to be conducted to finalize the baselines and targets, given that many of the procedures for cargo clearances are outside the direct mandate of the Bureau of Customs. It was agreed that future Time Release Studies will also clearly identify Customs related activities to ensure BOC’s contribution to any time reductions can be identified and monitored. In parallel, the Bank team will initiate the internal discussion with technical and M&E teams regarding the proposed indictors. Intermediate Results Indicators by Components 1. Modernization of Customs Operations IN01050829 ►Percentage of declarations covered by the authorized economic operators program (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 20.00 Date 31-Oct-2019 21-Apr-2021 21-Apr-2021 30-Jun-2025 Comments: Percentage of declarations, based on value, which are transacted by authorized economic operators. IN01050831 ►Share of non-intrusive inspections handled by the remote image analysis centers (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 100.00 Date 31-Oct-2019 21-Apr-2021 21-Apr-2021 30-Jun-2025 Comments: X-ray images of containers assessed by the remote image analysis centers. IN01050833 ►Customs processing system is connected to disaster recovery data center (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 31-Oct-2019 21-Apr-2021 21-Apr-2021 30-Jun-2025 Comments: The operation of the CPS is supported by at least one disaster recovery data center. 2. Organizational Development IN01050830 ►Approved modern organizational structure (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes 11/23/2021 Page 4 of 7 The World Bank Implementation Status & Results Report Philippines Customs Modernization Project (P163428) Date 31-Oct-2019 21-Apr-2021 21-Apr-2021 30-Jun-2025 Comments: Organizational structure to operate under the new CPS. IN01050832 ►Financial management systems integrated into the customs processing system (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 31-Oct-2019 21-Apr-2021 21-Apr-2021 30-Jun-2025 Financial management systems developed as part of the back office ERP system are integrated with the Comments: CPS. IN01050834 ►Availability of HR and employment data that are disaggregated by grade level and sex. (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 31-Oct-2019 21-Apr-2021 21-Apr-2021 30-Jun-2025 Comments: Generation of sex-dissagregated data by the back-office ERP system. IN01050835 ►Human resource management strategy that incorporates targets for gender balance of all BOC employees (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 31-Oct-2019 21-Apr-2021 21-Apr-2021 30-Jun-2025 New human resource management strategy to operate under the modern ICT enabled environment, Comments: promoting gender balance. IN01050836 ►Share of public feedback processed by an ICT-enabled grievance redress mechanism (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 100.00 Date 31-Oct-2019 21-Apr-2021 21-Apr-2021 31-Dec-2025 Feedback received by BOC’s Customer Assistance and Response Service and Assistance Center (BOC Comments: CARES) and processed through the online GRM. Performance-Based Conditions Data on Financial Performance Disbursements (by loan) 11/23/2021 Page 5 of 7 The World Bank Implementation Status & Results Report Philippines Customs Modernization Project (P163428) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P163428 IBRD-91710 Effective USD 88.28 88.28 0.00 0.63 87.65 0.7% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P163428 IBRD-91710 Effective 27-Oct-2020 03-Dec-2020 28-Jan-2021 30-Jun-2025 30-Jun-2025 Cumulative Disbursements PBC Disbursement Achievement Disbursed amount in Disbursement % PBC ID PBC Type Description Coc PBC Amount Status Coc for PBC Restructuring History There has been no restructuring to date. Related Project(s) 11/23/2021 Page 6 of 7 The World Bank Implementation Status & Results Report Philippines Customs Modernization Project (P163428) There are no related projects. 11/23/2021 Page 7 of 7