The Republic of the Philippines, 2002

Chapter 1 : Tariffs

 

Objective

 

APEC economies will achieve free and open trade in the Asia-Pacific region by:

 

a.                   progressive reduction of tariffs until the Bogor goals are fully achieved; and

 

b.         ensuring the transparency of APEC economies’ respective tariff regimes.

 

 

Guidelines

 

Each APEC economy will:

 

a.                   take into account, in the process of achieving the above objective, intra-APEC trade trends, economic interests and sectors or products related to industries in which this process may have positive impact on trade and on economic growth in the Asia-Pacific region;

 

b.                  ensure that the achievement of the above objective is not undermined by the application of unjustifiable measures; and

 

c.         consider extending, on a voluntary basis, to all APEC economies the benefits of tariff reductions and eliminations derived from sub-regional arrangements.

 

 

Collective Actions

 

APEC economies will:

 

a.                   participate and ensure the expeditious supply and updates of the WTO Integrated Database and any other APEC databases;

 

b.                  arrange for seminars and/or workshops on industrial tariffs negotiations in consultation with international organisations, where appropriate,  including  WTO Secretariat on WTO Integrated Tariff Database; and

 

c.                   study lessons from modalities for tariff reduction and elimination in regional arrangements.

 

The current CAP relating to tariffs can be found in the Tariffs and Non-Tariff Measures Collective Action Plan

 

 

 The Philippines' Approach to Tariffs in 2002

 

            The Philippines continues to pursue the Tariff Reform Program, a comprehensive review and rationalization of the country’s tariff structure which started in 1980.  The Program calls for the progressive reduction in applied rates of duty. The targeted final rate under the Program is a uniform rate of 5% by year 2004, except for “sensitive” agricultural products. “Sensitive” agricultural products relate to those agricultural products the quantitative restrictions of which were lifted and converted into tariff equivalents under the WTO Agreement on Agriculture (please see Attachment A for the list of “sensitive” agricultural products).  

 

            The Philippines continues to reduce bound tariffs in line with WTO commitments. It has eliminated tariffs on substantially all information technology products by the agreed timetable of 2000 under the WTO Information Technology Agreement (ITA).

 

            The Philippines participates in the Common Effective Preferential Tariff Scheme for the ASEAN Free Trade Area (CEPT-AFTA). Under the CEPT Scheme, the Philippines will reduce tariffs to 0-5% by 2002, with some flexibility. Tariffs on 60% of the products included in the CEPT Scheme will be reduced to 0% by 2003; those on “sensitive” agricultural products to a range of 0-5% by 2010.

 

 


 

 

Case Study of a Tariff Liberalisation Initiative

                       

 

The ongoing Tariff Reform Program is considered the most significant tariff liberalization initiative ever undertaken, on a most-favored-nation basis, by the Philippine Government as it would bring down to 5% tariffs across all product sectors, with the exception of “sensitive” agricultural products.* The magnitude of the tariff reductions may be gleaned from the table below which show the simple average applied tariffs by sector prevailing in 1996 and in 2002.

 

 

                                    Sector                                                   1996                 2002    

 

            All goods                                                               13.99                5.27

            Agriculture excluding fish**                                         17.94                6.81

            Fish and fish products                                                            19.80                7.06

            Petroleum oils                                                               5.40                  2.60

            Wood, pulp, paper and furniture                                     17.59                6.02

            Textiles and clothing                                                       21.19                9.53

            Leather, rubber, footwear and travel goods            17.60                5.63

            Metals                                                                          13.77                4.49

            Chemical and photographic supplies                                    7.69                  3.59

            Transport equipment                                                      14.33                7.91

            Non-electric machinery                                                         6.25                  1.88

            Electric machinery                                                         13.13                3.93

            Mineral products, precious stones and metals                    10.44                4.13

            Manufactured articles, n.e.s.                                        15.65                4.09

 

 

 

 

 

 

 

*           The figures provided for this sector do not include "sensitive" agriculture products.

 


 

The Philippines' Approach to Tariffs in 2002

Section

Improvements Implemented Since Last IAP

Current Tariff Arrangements

Further Improvements Planned

 

Bound Tariffs

 

 

 

Reduced bound tariffs in line with WTO commitments.  As a result, the simple average bound tariff fell from 27.53% in 2001 to 26.18% in 2002.

 

 

 

The Philippines continues to reduce bound tariffs in line with WTO commitments. 65% of the Philippines’ total tariff lines are bound under the WTO. Tariffs on industrial products, except textiles, reached their bound levels in 1999. Tariffs on agricultural and textile products are being reduced and will reach their bound levels in 2003 and 2004, respectively.  

 

The contact person for further information is:

 

The Chairman

Tariff Commission

Philippine Heart Center Building

East Avenue, Diliman

Quezon City

 

Tel: (632) 926-2805

Fax: (632) 921-7960

E-mail: tarcm@pworld.net.ph

            tarcm@mydestiny.net

 

 

The Philippines will continue to reduce bound tariffs on agricultural and textile products as per WTO commitments.

 

Applied Tariffs

 

 

 

Reduced the simple average applied tariff from 6.70% in 2001 to 5.27% in 2002.

 

 

The Philippines is implementing the Tariff Reform Program that calls for the progressive reduction of applied tariffs. The targeted final rate is a uniform rate of 5%, except “sensitive” agricultural products. 

 

Tariffs for products covered under the Early Voluntary Sectoral Liberalization (EVSL) initiative are being reduced in line with the Tariff Reform Program.

 

Detailed information on the Philippines’ applied tariffs may be obtained from http://www.apectariff.org/tdb.
cgi

 

The contact person for further information is:

 

 

 

The Chairman

Tariff Commission

Philippine Heart Center Building

East Avenue, Diliman

Quezon City

 

Tel: (632) 926-2805

Fax: (632) 921-7960

E-mail: tarcm@pworld.net.ph

            tarcm@mydestiny.net

 

 

The Philippines will progressively reduce applied tariffs in line with the Tariff Reform Program.

 

Tariff Quotas

 

 

 

Increased tariff quotas in  line with WTO commitments.

 

 

The Philippines maintains tariff quotas for “sensitive” agricultural products, the quantitative restrictions of which were lifted and converted into tariff equivalents under the WTO Agreement on Agriculture. These products include live animals (except live bovine animals), pork, sheep or goat meat, poultry meat, potatoes, coffee, maize and sugar.

 

The contact person for further information is:

 

The  Chairman

Tariff Commission

Philippine Heart Center Building

East Avenue, Diliman

Quezon City, Philippines

 

Tel:  (632) 926-2805

Fax: (632) 921-7960

E-mail:  tarcm@pworld.net.ph

            tarcm@mydestiny.net

 

 

The Philippines will gradually expand tariff quotas according to WTO commitments.

 

Tariff Preferences

 

 

Reduced the simple average preferential tariff from 3.87% in 2001 to 3.39% in 2002.

 

 

The Philippines participates in the Common Effective Preferential Tariff Scheme for the ASEAN Free Trade Area (CEPT-AFTA). As of 2000, the Philippines has phased in 100% of all manufactured products in the CEPT Scheme (except those in the General Exception List), with preferential tariffs of 20% and below.  97% of products in the Philippines’ Inclusion List are now dutiable at 0-5%. 

 

The contact point for further information is:

 

The National AFTA Unit

Bureau of International Trade Relations

Department of Trade and Industry

361 Senator Gil J. Puyat Avenue

Makati City 1200 Philippines

 

Tel: (632) 890-5149

Fax: (632) 890-4812

E-mail: bitr_mon@dti.dti.gov.ph

 

 

Under the CEPT Scheme, the Philippines will:

 

-           reduce tariffs to 0-5% by             2002, with some             flexibility;

 

-           reduce tariffs on 60% of             the products included in              the CEPT Scheme to             0% by 2003; and

 

-           reduce tariffs on             “sensitive” agricultural             products to a range of

             0% - 5% by 2010

 

 

 

Transparency of Tariff Regime

 

 

 

No improvements implemented.

 

The Philippines conducts public hearings/consultations on petitions for tariff modification as well as Philippine participation in tariff schemes, e.g., WTO, CEPT-AFTA and EVSL. Tariff changes are published in two newspapers of general circulation before they take effect.  Any new issuances are reflected in the Tariff and Customs Code of the Philippines.  The Philippines also provides updates on tariff changes to the APEC Tariff Database and the WTO Integrated Database.

 

The contact person for further information is:

 

The Chairman

Tariff Commission

Philippine Heart Center Building

East Avenue, Diliman

Quezon City

 

Tel: (632) 926-2805

Fax: (632) 921-7960

E-mail: tarcm@pworld.net.ph

            tarcm@mydestiny.net

 

 

No further improvements are required.

 


 


Improvements in The Philippines' Approach to Tariff  Measures since 1996

Section

Position at Base Year (1996)

Cumulative Improvements Implemented to Date

 

Bound Tariffs

 

 

 

In 1996, the Philippines’ simple average bound tariff stood at 31.56%.

 

Reduced the simple average bound tariff to 26.1853% (1997-2001).

 

Applied Tariffs

 

 

 

In 1996, the Tariff Reform Program was already being implemented, including the progressive reduction of tariffs on products covered under EVSL. The simple average tariff was 13.99%; those on EVSL sectors were as follows:

 

>  environmental goods – 6.14%

>  fish and fish products – 19.12%

>  toys  - 25.45%

>  gems and jewelry – 9.11%

>  medical equipment and instruments - 3.58%

>  forest products – 17.89%

>  oilseeds and oilseed products – 18.09%

>  chemicals – 6.39%

>  natural and synthetic rubber -  4.84%

>  fertilizers – 3.47%

>  food sector – 28.02%

>  energy sector – 9.15%

>  automotive – 14.80%

>  civil aircraft  - 11.46%

 

 

Reduced the simple average applied tariff to 5.27% (1997-2002).

 

The simple average applied tariffs on EVSL sectors have been reduced significantly:

 

>  environmental goods – 2.56%

>  fish and fish products – 6.02%

>  toys  - 5.50%

>  gems and jewelry – 4.59%

>  medical equipment and instruments – 2.57%

>  forest products – 5.77%

>  oilseeds and oilseed products – 5.29%

>  chemicals – 2.67%

>  natural and synthetic rubber -  2.26%

>  fertilizers - 1.10%

>  food sector – 8.21%

>  energy sector – 4.27%

>  automotive – 7.21%

>  civil aircraft  - 3.82%

 

 

Tariff Quotas

 

 

 

In 1996, the Philippines had already promulgated the administrative order providing for the gradual expansion of tariff quotas according to WTO commitments.

 

 

Gradually increased tariff quotas according to WTO commitments (1997-2002).

 

Tariff Preferences

 

 

 

In 1996, the Philippines had already signed on to the CEPT-AFTA Scheme. The simple average preferential tariff was at 10.56%.

 

 

Reduced the simple average preferential tariff to 3.39%  (1997-2002).

 

Transparency of Tariff Regime

 

 

 

In 1996, the Philippines was already conducting public hearings/consultations on petitions for tariff modifications. Any new issuances are reflected in the Tariff and Customs Code of the Philippines.  Updates were being provided to the APEC Tariff Database and the WTO Integrated Database.

 

 

 


 

APEC INDIVIDUAL ACTION PLAN:  TARIFF SUMMARY REPORT FOR 2002

(PLEASE COMPLETE BOXES)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All Goods

Agriculture excluding Fish

Fish and Fish Products

Petroleum Oils

Wood, Pulp, Paper and Furniture

Textiles and Clothing

Leather, Rubber, Footwear and Travel Goods

Metals

Chemical & Photographic Supplies

Transport Equipment

Non-Electric Machinery

Electric Machinery

Mineral Products, Precious Stones & Metals

Manufactured Articles, n.e.s

ITEM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bound tariff lines as a percentage of all lines

64.58

12.18

0.11

*

2.02

14.51

1.12

3.61

11.68

0.96

7.68

4.17

2.42

4.10

Duty-free tariff lines as a percentage of all lines

5.87

0.80

0.07

0.00

0.14

0.04

0.07

0.14

0.36

0.23

1.63

1.55

0.33

0.51

Preferential tariff lines as a percentage of all lines

99.75

12.33

1.97

0.18

5.35

14.73

3.11

11.69

16.41

2.91

10.23

6.99

5.66

8.19

Ratio of tariff lines with quotas to all lines

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Simple average bound tariff rate

26.18

36.24

33.50

*

24.48

30.67

32.84

25.97

20.20

20.00

18.04

19.76

22.29

22.73

Simple average applied tariff rate

5.27

6.81

7.06

2.60

6.02

9.53

5.63

4.49

3.59

7.91

1.88

3.93

4.13

4.09

Simple average applied preferential tariff rate, where applicable

3.39

4.18

4.36

2.60

3.42

4.50

4.02

3.15

2.82

5.90

1.57

2.52

3.40

3.34

Average applied tariff rate for all lines subject to duty

5.60

7.28

7.33

2.60

6.18

9.55

5.77

4.54

3.67

8.61

2.24

5.06

4.38

4.35

Import-weighted average applied tariff rate (CIF 2001)

3.05

4.64

2.95

2.98

4.97

6.33

6.01

3.89

4.86

8.73

1.71

1.17

3.78

2.26

Import-weighted average bound tariff rate (CIF 2001)

19.95

31.81

11.49

*

22.66

27.75

30.33

25.97

22.05

14.51

23.90

5.77

13.93

 8.79