Trade facilitation reforms

Reforms and amendments on existing regulatory laws will facilitate the free flow of traded goods. These include:

  • Cabotage Law which allows foreign vessels to dock at any Philippine port for loading and unloading of foreign cargoes. It is also expected to increase port revenues and provide price-competitive shipping service that will help exporters to compete effectively in the international market. It will further help decongest Manila ports as most shipments normally have to unload first in Manila before shipping directly to other domestic ports around the country.
  • CMTA which makes PHL compliant with the Revised Kyoto Convention which is a blueprint for “modern and efficient customs procedures” of the World Customs Organization. The law also aims to significantly reduce human intervention in Bureau of Custom’s (BOC) process and promotes transparency and accountability of the BOC.
  • BOC’s Customs Memorandum Order (CMO) 29-2015 which discards two (2) import forms such as the Import Entry and Internal Revenue Declaration (IEIRD) and the Supplemental Declaration on Valuation (SDV). This will reduce their transaction costs with the BOC in the release of their imported items.
  • Another BOC policy that would be beneficial to exporters is the non-requirement of Certificate of Exemption for importation of lithium Ion batteries provided that these are imported as finished product. This was reiterated in Customs Memorandum Circular No. 96 -2015 pursuant to Dangerous Drugs Board Regulation 1-2014.

The BOC also revised its port operation manual, thereby abolishing the requirements of Notice of Stuffing and the presence of Stuffing Inspector during the stuffing/loading of export cargo container (CMO 4- 2015).

PHL pushing for WTO TFA ratification

Philippine products and services are bound to reach an even wider international market once the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA) is ratified.

The WTO TFA, a key component of the Doha Development Agenda, aims to speed up the movement, release, and clearance of goods across borders. The agreement includes provisions for advance rulings and pre-arrival processing, the use of electronic payment and promotion of the use a single window, provisions for customs cooperation and coordination, and reduced documents and formalities with common customs standards.

Negotiations on the agreement started in 2004 and will enter into force once two-thirds of the WTO members have completed their domestic ratification process.To ratify the WTO TFA, the Philippines will submit its Instrument of Acceptance signed by President Benigno Aquino III to the WTO through its Philippine Mission in Geneva.

The TFA is also consistent with customs reform initiatives in other international fora such as the World Customs Organization (WCO), Asia Pacific Economic Cooperation’s (APEC) Trade Facilitation Action Plans and activities of its Sub-Committee on Customs Procedures, and ASEAN trade facilitation initiatives.Philippine reforms are currently underway through the Customs Modernization and Tariff Act (CMTA) now pending ratification in Congress.

The CMTA adopts trade facilitation measures that will expedite import and export clearance. This legislation will improve customs services through a simplified, secured, and harmonized cargo clearance process. The CMTA addresses, as well, the country’s international trade commitments and deals with transparency and accountability issues in the Bureau of Customs (BoC).

DTI Undersecretary for Industry Development Dr. Ceferino S. Rodolfo said that the TFA will significantly benefit MSMEs since the implementation of rational, efficient, and simple rules would encouragethem toparticipate more actively in international trade.

“Our MSMEs can now easily export goods and finished products as well as import intermediate goods which will serve as industry inputs for processing and re-export, fully integrating our industries into the Global Value Chain (GVC). This will result into a spill over effect to other industries, thus generating jobs, disseminating upgraded technology, and advancing the skills and capability of our local entrepreneurs,” Rodolfo said.

The Philippines serves a crucial processing link along the GVC chain, both as a source and destination for intermediate goods, with a 56% overall participation rate measured by share of foreign value added in total exports. The country was ranked 8th in the list of the top 25 developing economy exporters in the 2013 World Investment Report of the United Nations Conference on Trade and Development.