Alvin Baterna

Jashmine Bation
Kate Elleso
Shiela Hernane
Precy Trimidal

Intrade 6: Activity 3.1

Directions:  Do the this  research with your group: 

The Philippine tariff system 

A tariff is a tax levied by the government on goods and services imported from
other countries that aim to raise costs and make imports less attractive, or at least less 
affordable, than domestic goods and services. Tariffs are usually implemented as a
way of limiting trade from particular countries or of minimizing imports of specific 
types of products and services.In addition to discouraging the purchase of imported
goods, tariffs at one time were also the major source of governmental income. The
Philippines follows the United Nation’s Standard International Trade Classification
(SITC). Import tariffs can range from 0 to 65 percent. Imported goods in sectors
which have high domestic production typically incur higher tariffs. For non-
agricultural goods, tariffs average at 6.7 percent. 
The enactment of Republic Act No. 1937 otherwise known as the Tariff and
Customs Code of the Philippines paved birth of our present tariff system. Since the
Philippines has faced a lot of changes in our tariff system from the Spaniards who
first introduced to us the Philippine Tariff Act 1909 down to the present Tariff and
Customs Code. As the presidential Decree No. 34 was further amended, modified and
supplemented by new positions to make it a more responsive code in keeping with the
developmental programs of the society. With the accession of the Philippines to the
Customs Co-Operation Council (CCC), the Tariff & Customs Code has to be revised
anew in order to align our tariff system with the CCC Nomenclature, and the result is
the presently enforced Tariff & Customs Code of 1982, revised by virtue of Executive
Order No. 688. This new Code also assimilated various amendments to the Customs
Code under P.D. 1628 & 1980 as well as reprints of the tariff concessions under the
General Agreement on Tariff Multilateral Agreement Negotiations as provided in
Executive Order No. 578, series of 1980, and the tariff concessions granted to
ASEAN member countries as embodied in various Executive Orders from 1978 to
1981.
The Philippines has implemented the 2017 version of the ASEAN Harmonized
Tariff Nomenclature (AHTN). The Philippines’ simple average Most Favored Nation
(MFN) applied tariff rate was 6.2 percent in 2018.  The Philippines’ simple average
MFN applied tariff rate was 9.8 percent for agricultural products and 5.6 percent for
non-agricultural products in 2018. The Philippines has bound 67 percent of its tariff
lines in the World Trade Organization (WTO), with a simple average WTO bound
tariff rate of 25.7 percent. 
As a general rule, imported manufactured goods competing with locally produced
goods face higher tariffs than those without local competition.  The Philippines cites
domestic and global economic developments to justify the modification of applied
rates of duty for certain products to protect local producers. The Philippines
eliminated tariffs on approximately 99 percent of all goods from ASEAN trading
partners under the ASEAN Free Trade Area (AFTA) agreement. The Philippines
Customs apply a value added tax (VAT) for imported goods at 12 percent. The
Philippines’ customs levy no tariff or tax for goods worth less than P10,000
(US$200). To top it all, Philippines as a dynamic and has a strategic trading
location, the country should continue to comply with ASEAN-wide economic
integration, opportunities for both importers and exporters that will continue to grow.
Utilizing experts with up-to-date local knowledge can help exporters and importers to
not only avoid customs-related delays and frustrations but also ensure import and
export activity occurs quickly and remains profitable. Also, it is one of the way to
raise our funds if we implement tariff as to help our economy to rise and to support
our local products by having a bigger taxes on the products that are going in to our
country as our local products is a budget friendly.
References:

https://www.aseanbriefing.com/news/import-and-export-procedures-in-the-
philippines-best-practices/
https://www.shopify.com/encyclopedia/tariff#:~:text=A%20tariff%20is%20a
%20tax,versus%20domestic%20goods%20and%20services.&text=The
%20government's%20hope%20is%20that,imported%20goods%20much%20less
%20desirable.
https://www.trade.gov/knowledge-product/philippines-import-tariff#:~:text=The
%20Philippines'%20simple%20average%20Most,non%2Dagricultural%20products
%20in%202018.
https://www.bworldonline.com/a-long-history-of-philippine-customs-
excellence/#:~:text=In%201957%2C%20Congress%20enacted%20the,known%20as
%20Republic%20Act%20No.&text=Prior%20to%20its%20passage%2C
%20all,Tariff%20Laws%20of%20the%20Philippines