The CESO pool

It was called “the cesspool.” This was where career officials with CESO eligibility ended up, on “floating” status, shortly after Gloria Macapagal-Arroyo was swept to power by EDSA II in January 2001.

CESO stands for Career Executive Service Board. Career civil servants take the CESO exam for promotions or eligibility for certain positions. They cannot be demoted or assigned to positions lower than their CESO eligibility. But they can be placed in the freezer or on floating status.

Back in the heady days after the second people power revolt, the headhunters for the new team wanted to get rid of certain undesirables from the Estrada administration. About 10 officials, however, had CESO eligibility and could not be summarily removed.

In consultation with the Civil Service Commission (CSC), the Palace search committee put the officials in the freezer or on floating status. The committee called it “the CESO pool,” which inevitably evolved into “the cesspool,” from which other agencies could recruit the officials.

Those who were still in the pool after six months, with no takers from other offices, were eased out of government service. This process of attrition was cleared with the CSC, and the attrition was not challenged by any of those affected.

Some quarters are now suggesting the same route for certain officials of the Bureau of Customs (BOC). Current CSC chief Francisco Duque, however, reportedly thinks the process violates civil service laws.

Those laws authorize Customs Commissioner Ruffy Biazon to reshuffle BOC officials any time or put them in the freezer, without asking them to relinquish their posts. The order for BOC collectors to relinquish their positions could be Biazon’s idea of providing a face-saving exit, so it won’t be said that any official got sacked.

There is widespread skepticism over the benefits of a reshuffle in fighting corruption in the BOC. And even if the extreme proposal – to replace the entire BOC rank and file – is carried out, there’s no guarantee that the replacements will be any better. They will probably behave for a certain period, but once the heat is off, the opportunities for corruption will still be there for the taking. And didn’t President Aquino himself advice Pinoys to seize opportunity when it presents itself?

The administration is working on proposed legislation to modernize Customs operations. An idea is also being kicked around to place Revenue Commissioner Kim Henares concurrently in charge of the BOC while Congress deliberates on the Customs modernization law – a proposal that certain quarters think is legally not feasible (and bad for the health of Henares). Some exasperated Pinoys, meanwhile, are proposing the abolition of the BOC altogether.

*   *   *

Another radical proposal, although less extreme than the abolition of the bureau, is to turn the entire country into a free port, with the BOC focusing mainly on preventing the entry of prohibited drugs, weapons, health hazards and other dangerous contraband. The Asia-Pacific is headed toward a tariff-free trade zone anyway, the proponents argue, although the Philippines is lagging behind in ongoing initiatives.

Hong Kong has flourished as a free port, according to the proponents who include certain local and foreign businessmen. The government will have to weigh the projected revenue losses against the potential increase in national production if the country becomes a free port.

Proponents point out that the scheme will compel Filipinos to become globally competitive. It will loosen the stranglehold of the miniscule elite on many economic activities.

To those who fear a flood of competition from abroad, proponents argue that the goods are flooding the country illegally anyway, and fueling corruption in the process. The transformation into a free port can be gradual, over several years.

A less radical proposal is to minimize opportunities for graft by reducing tariffs. Within a certain tariff range, this can be done by executive order. Abolition of tariffs, however, requires legislation.

*   *   *

If the BOC will retain all its personnel and functions in the next three years, another option to reduce graft, increase collections and enhance the fight against smuggling is to hire the services of a private firm with an international presence and track record for inspecting, verifying and certifying traded goods from their point of origin and then upon arrival in the Philippines.

We used to have the Geneva-based Societe Generale de Surveillance (now SGS S.A.). There are several other companies with proven international track records offering similar services.

When the government terminated the SGS contract, there was no replacement for its pre-shipment inspection overseas for cargo headed for the Philippines. Shipment inspection, valuation and certification were then left entirely to BOC personnel and importers-exporters in Philippine ports.

The SGS contract was terminated supposedly because it was too expensive. The cost of such services, however, should be amply offset by government savings from reduced smuggling and graft.

Some critics also said such services should not be handled by a private company. The critics must have been overjoyed by the results of the termination of the deal.

Smuggling and the corruption it engenders are bad for legitimate business, bad for foreign direct investment and jobs, and therefore bad for any national leader aspiring for inclusive economic growth.

P-Noy put the spotlight on the rot in the BOC in his State of the Nation Address. Now that the manure has hit the fan, he can’t afford to backpedal on his criticism and his call for reforms. The BOC is a cesspool and the cleanup must be drastic.