(Last updated: 30 May 2011)

Business opportunities

Austrade’s business development specialists have prepared a range of market profiles that offer potential to assist in your exporting investigations. Austrade’s in-market teams have identified opportunities for Australian exporters in various industries (see 'Profiled industries in this market' on the left side of this page).

Business etiquette

Business tips

Suits are recommended for business meetings and for more formal occasions, a dinner jacket and tie are suitable.

Filipinos normally use two forms of address/names. Their ‘full name’ is used for official business transactions such as signing of contracts while their ‘nickname’ is the one that is usually seen on their business card and the name that they prefer other people to address them during a conversation.

During first time meetings it is recommended to address the Filipino person by using their surname and title (eg. ‘Secretary Cruz’ or ‘Director Mendoza’) as a sign of respect. After the initial meeting, titles can generally be disregarded in conversation, but it is preferable to use them in correspondence.

Please also note: Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. For more information, go to the Attorney General's Department on foreign bribery.

Tariffs and non-tariff barriers

Tariff

Single-column tariff based on the Harmonised System. The Harmonized System is an international product nomenclature formed under the auspices of the World Customs Organization and was developed not only for customs purposes but also for the collection of trade statistics and for all kinds of transactions in international trade.

Most duties are ad valorem, assessed on the export value plus insurance and freight charges. An ASEAN margin of preference on the existing tariff is negotiated periodically on a product-by-product basis.

The Philippines is a member of the Association of South East Asian Nations (ASEAN). Preferential rates are applied to imports from other ASEAN members.

As a signatory to the ASEAN, Australia, New Zealand Free Trade Agreement (AANZFTA) which entered into force on 1 January 2010, AANZFTA is expected to deliver new opportunities and create greater certainty across the board for Australian exporters and investors in the Philippines.

Australian exporters can now access Austrade’s AANZFTA tariff finder. The tool provides an easy reference for Australian exporters who want to know what the applicable tariff rate is for their products under the AANZFTA.

Non-tariff barriers

Imports are classified into three categories:

• prohibited
• regulated
• unrestricted

Importation of agricultural products is now allowed subject to quarantine requirements. Used textiles/garments remain prohibited imports.

Due to infestation by fruit fly, a number of fresh fruit or vegetable varieties originating from mainland Australia are not allowed into the Philippines.

Chicken, quail, kangaroo, emu and wild pig meat are allowed into the country provided the necessary import permits are obtained from the Bureau of Animal Industry.

Regulated imports include goods restricted for reasons of public health and safety and protection of domestic industries. Unrestricted imports do not required prior approval of the Central Bank and may be processed by banks authorised as agents. Import licences are required for an extensive list of goods. Prior import permits are required for a range of items subject to import clearance.

As of January 1, 2000 the Philippine Government shifted to the transaction value system of import valuation, in compliance with the WTO Agreement on Customs Valuation. The transaction value system looks at the price agreed upon by the buyer and seller, including other payments made by the buyer for the goods as purchased.

As of 1 April 2000, with the lapse of the contract between the Philippine Government and SGS, the Philippine Bureau of Customs (BOC) took over the function of monitoring shipments. The BOC uses a selection system to determine the appropriate clearance channel of imports. Shipments classified as low risk are assigned to the 'green lane' where they are cleared for release without physical inspection. High-risk shipments are channelled either to the 'yellow lane' where they are subject to documentary examination, or to the 'red lane', where they undergo documentary and physical inspection.

To qualify for the 'Super Green Lane' list, an importer:

• must not have been the subject of disciplinary action
• must have had transactions with the BOC for at least one year
• should be among the top 1,000 importers in terms of duties and taxes paid

Goods exempt from inspection requirements include:

• fresh, frozen or chilled foodstuffs, live animals, works of art, current newspapers and periodicals, private motor vehicles and parcel post
• consignments valued at less than US$500 FOB (Incoterms 2000)
• purchases by the government or any of its corporations, agencies and instrumentalities
• manufactured armaments imported by the Department of National Defence
• raw materials and supplies for the semiconductor and allied enterprises (conditions apply)
• crude oil and petroleum products in bulk (conditions apply)
• precious artefacts, metals and gemstones
• imports by export processing zone enterprises
• a letter of credit will be opened by the Central Bank or its agents upon presentation of the proforma invoice (see 'Methods of quoting and payment' below)

Product certification, labelling and packaging

Labelling and marking

Drugs must be labelled with the product's generic name.

The generic name must appear above the brand name, in a larger typeface, enclosed in a border with a contrasting background.

All goods must have labels in English or Filipino with the following information:

• brand, trademark or trade name
• physical or chemical composition (where applicable)
• metric length
• net contents or weight
• country of manufacture
• name and address of manufacture or repacker

Failure to comply with any part of the above regulations is subject to penalty. Goods not bearing adequate marks of origin are subject to a marking duty of five per cent.

Customs authority contact details:

Commissioner of Customs
Bureau of Customs
Manila, The Philippines
Tel: (63) 2 527 8402 to 27 (South Harbour)
Fax: (63) 2 245 4101 (North Harbour)

Packaging

Packing should be secure and guard against tropical dampness and heat. Contents should not be indicated on outer containers. The use of rice, straw and chaff is prohibited. Excluding shipments of over 500 barrels or cases, all packages and cases in each shipment must be numbered consecutively. Textiles, shipped either as piece goods or in one piece, must be in bales or cases containing not more than 1100m each. Permitted textile remnants must be in bales of a gross weight not exceeding 136kg (see 'Import restrictions').

Special certificates

Animals and animal products of cattle, sheep, swine and goats require a certificate of ante- and post-mortem inspection.

Imports of livestock, meat and meat products, plants and plant products must be accompanied by health certificates issued by the approved authority in the country of origin. In Australia this is usually the Australian Quarantine and Inspection Service, Commonwealth Department of Agriculture, Fisheries and Forestry-Australia, or relevant state department of agriculture.

A phytosanitary certificate, issued by the approved authority in the country of origin, accompanying imports of plants and plant products, must be forwarded to the plant quarantine authorities at the port of entry.

Food, drugs, pharmaceuticals and cosmetics require certification that the items comply with Philippine specifications. This is in the form of a declaration by the shipper and must be filed with the Philippines Consul. Five copies are required.

Insecticides, Paris greens, lead arsenates and fungicides require a declaration by the manufacturer or shipper that the goods are not falsely labelled and are not dangerous to health.

Chemicals and chemical products must be accompanied by a certificate indicating the specific chemical name. Trade names should also be included (see 'Public health requirements' above).

Wheat flour requires a certificate of classification and analysis showing protein content, ash content, moisture and extraction for the particular brand or brands indicated in the invoice.

Essences, flavouring extracts and other preparations containing distilled spirits (ethyl alcohol) required a certificate giving the source and percentage content of the alcohol used in their manufacture.

Certificate of free sale - if requested the certificate should be issued by a responsible government authority in the exporting country stating that the products are sold freely in that country.

Must be legalised by the Philippine consulate.

Export entry - to be submitted only when specified in the letter of credit. If so specified, five copies are required.

Methods of quoting and payment

Quotes should be in US dollars, CIF (Incoterms 1990). Terms of payment are usually stipulated through letters of credit (see 'Import restrictions').

Documentary requirements

Fax signatures are not permitted.

Note: Mail between Australia and the Philippines may be occasionally subject to delay and exporters should ensure that certification and dispatch (by air mail) of all documents is given the highest priority.

Commercial invoice

Three copies are required and must bear the following signed declaration: 'All the information contained herein is correct. The value (....... amount per unit) (Current Domestic Value) declared is the same value as that stated in all other documents filed in connection with this exportation. Signed, ..................................... Director, Secretary, Partner, Proprietor'.

Detailed costs of the following must be shown:

• FOB value separate from the CIF or C&F value (Incoterms 1990)
• value of packing materials used in consignment
• value of labour used in packing goods for export
• freight to docks
• pier and handling charges

Bill of lading/airway bill

At least three signed negotiable and five nonnegotiable copies are required. One negotiable and four non-negotiable bills are to be included with the original documents. One negotiable copy stamped 'For consular purposes only' together with one non-negotiable copy are to be presented to the Consulate. The bill of lading must show gross weights, quantity and volume (in pounds and kilograms), freight and other charges.

Packing list

Five copies are required and must be certified by seller, manufacturer, exporter or his duly authorised representative.

Public health requirements

Stringent regulations apply to food, drugs and pharmaceuticals, insecticides, fungicides, and essences and flavourings containing distilled spirits. The requirements for specific products should be checked with the importer.

Health certificates issued by the approved authority in the country of origin must accompany imports of livestock, meat and meat products, plants and plant products and chemical products (see 'Special certificates' below).

Import permits issued by the appropriate Philippine Government agency are required for a number of specified items (see 'Import restrictions').

Although Australia is not classified as an 'infected area', consignments containing gunnies, hessian cloth, burlaps, wood shavings, used clothing, hides, hair and wool products may sometimes be required to be fumigated. The cost is payable by the consignee.

Insurance

Normal commercial practice. However, advice should be obtained from Philippine importers and insurance companies.

Weights and measures

The metric system.