23 June 2017
Import/Export Procedures of the Philippines
The Philippines has developed strong international ties, obtaining membership of ASEAN (1967), the WTO (1995) and China-ASEAN Free Trade Area (2010). In addition, the Philippines is strengthening ties with China, the EU and have negotiated a number of trade agreements including:
- Regional free trade agreements (FTAs) signed under the auspices of ASEAN with six countries individually, including China, Japan, Korea, India, Australia and New Zealand
- Bilateral FTA between the Philippines and Japan (currently undergoing review)
- FTA signed with EFTA member states in 2016
The Philippines’ key trading partners include Japan, the US, the Chinese mainland and Hong Kong, with two-thirds of merchandise exports going to these places. Major items exported include electronic equipment, coconut oil, machinery, woodcrafts and furniture. For a full analysis on trade policy see the Philippines Market Profile on the HKTDC website.
A Hong Kong company must have clearance with the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) before importing any goods:
1. Obtain an Importer’s Clearance Certificate (ICC) from the BIR. The ICC will only be issued to applicants who have complied with the existing tax laws and regulations. Once the ICC is received, a Hong Kong company can be fully accredited by the BOC as an importer. The timeline of processing and releasing an ICC is usually five working days upon receipt of the application.
2. Approach the BOC with the ICC and complete an Import Entry Declaration and an accompanying Supplemental Declaration on Valuation. These may be submitted electronically via Electronic Data Interchange or by regular manual processing procedures.
3. The following import documents are also required:
- Commercial invoice
- Bill of lading
- Certificate of origin
- Packing list
- Special certificates, which are required depending on the nature of the goods being shipped, such as the required permits from government agencies for regulated goods
Once presence in the Philippines has been established (see Section 2), the Hong Kong company can approach the BOC immediately to complete an Export Declaration Form. As with importing, additional documents, such as commercial invoice, evidence of the final destination of the goods, should also be provided.
The Philippines classifies commodities into three types:
1. Freely importable commodities, which require no permit.
2. Regulated commodities, which require clearances or permits from appropriate government agencies. These include live animals, meat, plants, medicines, firearms, oil and petroleum products.
3. Prohibited items, which are not allowed to be imported/exported. These include right-hand drives motor vehicles, used clothing, guns, misbranded drugs and food.
A full list of regulated and prohibited items can be found on the Philippines DTI website.
Tariff Classification and Import/Export Duties
The Philippines adopts the Harmonised System (HS) and most goods imported/exported are subject to import/export duties. Exceptions include goods brought into special economic zones and any goods stored in a customs bonded manufacturing warehouse. In addition to import/export duties, some goods may be liable for tax (e.g. VAT and excise tax).
The Philippine Government’s comprehensive tariff reform program has reduced tariff rates significantly in recent years, although as a protective measure, the Philippines retains higher tariff rates on sensitive agricultural products such as grains, livestock, sugar, certain vegetables, and coffee.
The rates applicable are dependent on the origin of the goods (certificate of origin will need to be presented) and there are three categories:
1. Special preferential rates – applicable if there is a special preferential trade arrangement (e.g. ASEAN member states).
2. Preferential rates – applicable if the country has a Most Favoured Nation (MFN) status with the Philippines. The MFN tariffs currently range from 0% to 65% with approximately 46% of tariff lines having duty rates of 1% or 3%. Tariff lines with duties greater than 20% account for 6% of total lines.
3. Ordinary rates – for any other country.
Applicable rates can be identified on Philippine Tariff Finder on the website of the Philippines’s Tariff Commission.
There are no export taxes levied except on logs (20%).
Product Standards and Labelling Requirements
Information on the Philippine product standards can be found on the Standards and Conformance Portal on the DTI website.
- Regulatory Environment
- Establishing a Presence
- Intellectual Property Protection
- Staff Recruitment
- Tax Considerations
- Import/Export Procedures
- Further information