Asia-Pacific Economic Council (APEC), Asia Free Trade Agreement (AFTA, free trade zone of the ASEAN), Asia Europe Meeting (ASEM)), Japan Philippines Economic Partnership Agreement (JPEPA), ASEAN-Australia-New Zealand Free Trade Agreement; and the ASEAN - China Free Trade Area.
Non Tariff Barriers
Imports generally enjoy a liberalized regime. However, imports of certain products are regulated and sometimes forbidden in accordance with the current laws, for reasons of health, national security, or international requirements or in order to protect the development of local industry. Imports are currently classified into three categories according to the degree of restriction they are subject to: freely imported products, regulated and forbidden products. For regulated products, an import license is necessary which can be obtained by applying to the authorities concerned (for example, certain foodstuffs or pharmaceutical products require the authorization of the Food and Drug Authority). The third category comprises products which it is forbidden to import such as: explosives, firearms and war weapons, precious metals, narcotics, drugs, and coffee.
Customs Duties and Taxes on Imports
The Philippine Customs system is based on the Standard International Trade Classification (SITC) of the United Nations (Revision 2). Duties are usually calculated ad valorem, and specified in the Philippines Customs Code. There is a program of reduction and simplification of the duties in conformity with the liberalization policy of the Philippine Government. A Customs system which will classify imported products into only two categories is envisaged: raw materials and finished products. For these categories, fixed rates of respectively 3% and 10% duty will be applied. For the calculation of import duties, the Philippines currently use the system of value based on the price of domestic consumption. Besides, the Philippine government has a contract with the services of SGS SA (Société Générale de Surveillance), a Swiss company providing inspection and valuation of imported goods with value higher than 500 USD, so as to avoid any over-invoicing or under-invoicing.
All imported articles invite import taxes, even those having been previously exported (except special mention envisaged in the Tariff and Customs Code or another regulation). The entry form must be filled in at the Customs Office in the 30 days following the unloading of the last package, failing to do which amounts to abandonment of the goods and ipso facto confiscation of the cargo. The importation of certain commodities is regulated or prohibited. Imports are classified as follows: - Freely Importable Commodities; - Regulated Commodities; - Prohibited or Banned Commodities, see the list here.
Import documents required for shipments to the Philippines include: • Commercial invoice/Pro forma invoice; • Bill of lading (for sea freight) or air waybill (for air freight); • Certificate of origin (if requested); • Packing list; • Special certificates/import clearance/permit depending on the nature of goods being shipped and/or requested by the importer/bank; • Commercial Invoice of Returned Philippine Goods.
The majority of companies use the services of agents, distributors, and intermediaries for distribution, who distribute on the traditional channels. Most of the Philippine's national importes and distributors are located in Manila.
Doing business in the Philippines requires going through a broad network of subcontractors.
Among its 642 013 stores, in 2007, the Philippines had 638 826 traditional grocers, 1 550 local stores, 1 157 supermarkets, 22 warehouse stores and 458 shopping malls. 9 306 pharmaceutical stores distributed in 7 481 traditional medical stores and 1 825 industrial stores (Nielsen, Retail and shopper trends Asia Pacific 2008).
Conveying products to the Philippines and everywhere in the country can prove to be a long and expensive process. As the country is an archipelago and due to the bad condition of the highway network, the sea route is the primary mode of transport