Business opportunities
Austrade's business development specialists have prepared a select range of market profiles with potential business opportunities and to assist in your exporting investigations. Please see the list of industries at the end of this profile that you may be interested in.
In conjunction with the market profiles, the Opportunities Online website may be a useful addition to your information sources. The database established by Austrade aims to deliver international sales leads ('export opportunities'), including tenders, generated by our overseas network to Australian businesses.
Registering is simple and once this is done you will have the option of accessing a weekly newsletter featuring the most recent opportunities uploaded onto the system in industry sectors of interest to you. Another feature is the ability to view, and also print, the complete page of opportunity details.
For general inquiries concerning Austrade’s services, please contact Austrade Direct on 13 28 78.
Business etiquette
Buisness hours in the Philippines:
- Business hours are Monday to Friday between 8.00am to 5.00pm or 9.00am to 6.00pm, and some private companies are open on Saturday between 9.00am to noon.
- Banks are open Monday to Friday between 9.00am to 3.00pm.
- Shopping centres, department stores and supermarkets are open Monday to Friday between 9.00am to 7.30pm.
- Shopping malls are open daily between 10.00am to 9.00pm. Some movie theatres run a main feature beginning as late as midnight.
Business practices:
- 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 regulations
Import restrictions
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 1000 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)
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.
Packing, marking and labelling
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' above).
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)
Weights and measures
The metric system.
Insurance
Normal commercial practice. However, advice should be obtained from Philippine importers and insurance companies.
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').
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' above).
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.
Documentation
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
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.
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.
Taxation
Corporations are classified as domestic or foreign. Additionally, a foreign corporation is either resident or non-resident.
Domestic corporation and resident foreign corporation:
- income tax rate is 35 per cent
- domestic corporation – tax base is net worldwide income
- resident foreign corporations – tax base is net Philippine-source income
- capital gains tax is the regular 35 per cent corporate tax rate
- profit remittance tax rate is 15 per cent
Non-resident corporations have incomes in the form of dividends, rents, royalties, compensation, remuneration for technical services, and capital gains are subject to a tax of 35 per cent gross amount.
The taxable year for corporate taxpayers may be either calendar year ending 31 December or fiscal year ending 30 June. With regard to the withholding of taxes, a tax due on the income of a non-resident foreign corporation is withheld at source.
Product samples in non-commercial quantities and giveaways, which visitors bring in, are not subject to import duties or taxes. However, a company forwarding samples or giveaways by air or sea to a potential client must declare in the accompanying documents that the samples or giveaways have minimal, or no commercial value and are not of a commercial quality.
General information:
- Value added tax of 10 per cent is levied on all goods, whether imported or domestically produced. VAT on imports is initially levied on the duty paid value.
- Exemptions include most petroleum products, some chemical preparations, unprocessed foodstuffs (eg. corn and rice) and printed material.
- Industries exempt from VAT include power, water, fertilisers and life insurance.
- An import surcharge of three per cent applies to a wide range of petroleum products, both crude and processed.
- In addition to VAT, excise tax is levied on a range of excisable items.
- Charges may be either specific, expressed in Pesos per measure, or ad valorem, assessed on the importer's registered wholesale price (excluding the VAT).
- An ad valorem tax, at varying rates, is levied on motor vehicles.
- It is based on the importer's selling price, net of excise and VAT.
- Specified luxury items are subject to a tax of 20 per cent, assessed on the imported value, net of excise and VAT.
Business travel
Moving around the Philippines by air, land and sea is easy with national highways connecting the major islands and an extensive public transportation system.
The Ninoy Aquino International Airport (NAIA) is located to the south of the main city areas, approximately nine kilometres from Makati. It takes about 30 minutes by car to the major Makati or Roxas Boulevard hotels, except during peak hours (between 7.00am–10.00am and 4.00pm–7.00pm) where the trip may take one hour or more.
Taxis are plentiful and inexpensive, but use a reputable taxi company (ie. check that the company name is on the door and that it has a meter – although it is common for the meter to be ‘broken’). In this case, agree on the fare before departure.
Taxis from NAIA to the Makati hotels will cost around P300. Avis (Tel: 532 0605, 532 5758) and R&E Taxi (Tel: 363 1889, 364 9058, 364 9089) are among the most reputable metered taxi services. Both have stands at the airport and at hotels in Makati’s business district.
Avoid the use of public buses and jeepneys.
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