Gov't decides to retain services of pre-shipment inspector

The government has decided to retain the services of a pre-shipment inspector, with the Societe Generale Surveillance (SGS) as the leading bidder for the new service contract.

This developed even as the Estrada administration has not found the money to settle its P4.5-billion arrears with the SGS.

The new service contract will cover pre-shipment processing since the Bureau of Customs has shifted its basis for customs valuation from home consumption value to transaction value.

This removes the need for pre-shipment inspection, but to assuage the fears of the business sector that cargo traffic would worsen, government is retaining the services of a third party contractor to conduct pre-shipment processing.

Meanwhile, Finance Secretary Jose T. Pardo said government still has no idea on how to settle its obligations with SGS. Pardo said government's arrears in January alone stood at P300 million, compounding the P4.2 billion it owes the Swiss company for services rendered since 1999. "This is the big bottleneck now because we don't know how to pay this," he said.

Pardo said a pre-shipment inspection meeting is scheduled in Malacañang today after the meeting of the Economic Coordinating Council. "The president wants to resolve this as soon as possible since the contract expires today," said the finance chief.

"How do we pay them? This isn't in the budget," Pardo said. "This is the bottleneck in this process now."

Pardo said the particulars of the service contract will be settled when the committee meets today to define exactly what the third party contractor will be required to do.

The use of transaction value will eliminate the need for pre-shipment inspection, but there has been an aggressive lobby from local and foreign chambers of commerce and industry to retain the services of a third party contractor until the BOC's new valuation system has been tried and tested.

At present, pre-shipment inspection is being done for all Philippine-bound imports by SGS. All goods are inspected and their declared value are validated by the SGS before they are shipped. This cuts down the processing time and prevents clogging up at the Bureau of Customs.

After the expiration of SGS' contract, government will bid out the pre-shipment processing contract. Aside from SGS, a British agent Inter Tech has also expressed interest in making a bid, as well as a local company.

Local and foreign business groups are proposing that government facilitate pre-arrival processing to avoid clogging at the BOC. They expressed fears of chronic cargo congestion at the country's 13 customs zones if it the inspection of 24,000 TEU shipments arriving every month is left to the BOC.

SGS has been handling pre-shipment inspection and valuation in the country since 1987.