Tariffs and regulations
Tariffs and duty rates are constantly revised and are subject to change without notice.
Austrade strongly recommends you reconfirm these prior to selling to the Philippines.
For further information please see the Philippine Tariff Commission website.
Tariffs and non-tariff barriers
Tariff
Single-column tariff based on the Harmonised System. The Harmonised System is an international product nomenclature formed under the auspices of the World Customs Organisation 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.
Value-Added tax
A value-added tax (VAT) of 12% is levied on the sale of goods and services and on the imports of goods into the Philippines. The VAT on imported goods is basd on the total value used by the Bureau of Customs in determining tariffs and duties. Exempted from payment of VAT are, among others, agricultural and marine food products in their original state and breeding stock and genetic materials.
Excise taxes
Excise taxes, both specific and ad valorem, are levied on wines and spirits, beer, cigarettes and tobacco products, lubricating oils and grease, processed gas, waxes, denatured alcohol, cinematographic films, saccharine, coal, cars, non-essential goods, mineral products, naphtha and other similar products of distillation, asphalt, and petroleum and other fuel products.
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.
Exports of fresh fruits from Australia to the Philippines will commence with the acceptance by the Philippine government of the revised Specific Commodity Understanding No 2 (Conditions for export of fruit fly host fruits from Australia to the Philippines) which will allow cold disinfestation treatment of fruits to be conducted either in-transit or pre-shipment (on-shore) in Australia. The Secretaries of the Philippine Department of Agriculture and the Australian Department of Agriculture, Forestry and Fisheries (DAFF) will officially sign the revised SCU under the Sanitary and Phytosanitary (SPS) Protocols for Australia during the Philppine-Australia Agriculture Forum to be held sometime in 2013.
Chicken, beef, pork and lamb are allowed into the country provided the necessary import permits are obtained from the Bureau of Animal Industry. There are no protocols in place for the importation of game meat such as crocodile, kangaroo and emu. Applications for the issuance of a special permit for the one-time importation of game meat will have to be lodged with 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 require 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.
The Philippine Government uses the transaction value system of import valuation in compliance with the WTO Agreement on Customs Valuation. This system looks at the price agreed upon by the buyer and seller, including other payments made by the buyer for the goods as purchased.
The Philippine Bureau of Customs (BOC) monitors the entry of goods into the country. 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
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
- name and address of importer or distributor
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.
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.
Food and Drug Administration contact details:
Director
Food and Drug Administration
Alabang, Muntilupa City
Tel: (63) 2 807 0751 / 807 8275
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.
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 Sanitary and 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 Consulate.
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.
The Philippine Food Fortification Law of 2000 requires that all staple foods such as rice, sugar, flour, salt and cooking oil – be fortified and has identified Vitamin A, iron, and iodine as the three most needed micronutrients in the country. The law aims to provide 50 percent or more of the recommended daily allowance (RDA) of Vitamin A and iron among at-risk groups, particularly children below 6 years old and women of reproductive age.
This law applies to all manufacturers or producers, importers, traders, tollees, retailers repackers of staple foods as well as restaurants and food service establishments. Sanctions for non-compliance include fines of not more than P1 million and revocation of permits and licenses depending on the gravity of the offense.
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.
Product registration with the Food and Drug Administration can take anywhere from 3 – 6 months provided documentation is complete.
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 can in US or Australian dollars, CIF or FOB (Incoterms 1990). Terms of payment are usually stipulated through letters of credit.
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:
- Free on board (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 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' above).
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 legal units of measurement in the Philippines is based on the metric system or the SI (International System of Units). The use of the metric system is further reinforced by the Consumer Act of the Philippines.