Philippines - Trade Barriers Philippines - Trade Barriers
The average tariffs on agricultural products stayed flat at 11.49 percent from 2018 to 2019, although this does not include the recent conversion of rice quantitative restrictions to tariffs, which the Philippine Tariff Commission is still calculating. The Philippines maintains a two-tiered tariff policy for sensitive agricultural products including rice, corn, pork, chicken meat, sugar, and coffee. These products are subject to a tariff rate quota (TRQ) and all imports outside of the minimum access volume are taxed at a higher out-of-quota rate. In-quota and out-of-quota tariff rates averaged 36.5 percent and 41.2 percent, respectively, and have not changed since 2005.
On February 14, 2019, President Rodrigo Duterte signed into law the Republic Act (RA) No. 11203 or “An Act liberalizing the importation, exportation, and trading of rice, lifting for the purpose the quantitative import restriction on rice, and for other purposes". The law amends RA No. 8178 or the Agricultural Tariffication Act of 1996 and replaces the quantitative restrictions (QR) on rice imports with tariffs.
The Implementing Rules and Regulations (IRRs) of RA No. 11203, as contained in Joint Memorandum Circular (JMC) 01-2019, were approved on March 5, 2019. A 350,000 ton-rice TRQ will be levied a 40 percent duty. Out-quota tariffs are at 180 percent (or the tariff equivalent based on the WTO Agreement on Agriculture upon the expiration of the waiver of the special treatment for rice, whichever is higher).
At present, a few TRQ products have achieved unified in-quota and out-of-quota tariff rates, including chicken, frozen or chilled (40 percent); turkey livers, frozen or chilled (40 percent); potatoes, fresh and chilled (40 percent); and roasted coffee beans (40 percent). Currently, there is an additional special safeguard duty in place for chicken meat, which effectively doubles the rate of out-of-quota tariff protection. Administrative Order (A.O.) 9 of 1996, as amended by A.O. 8 of 1997 and A.O. 1 of 1998, established rules for implementing TRQs and allocating import licenses.
Excise Taxes on Alcohol Products
Republic Act No. 10351 entitled, “An Act Restructuring the Excise Tax on Alcohol and Tobacco,” otherwise known as the 2012 Sin Tax Reform, provided revised excise tax rates imposed on distilled spirits, wines and fermented liquors. While the excise tax rates are among the lowest in the region, the annual increase is open-ended. The schedule of excise tax rates and related regulations are available at https://www.bir.gov.ph/index.php/tax-information/excise-tax.html. Below is a summary:
The excise tax on imported and domestically produced distilled spirits regardless of the raw material used is composed of a uniform ad valorem (“according to value”) tax and a specific tax based on the following schedule:
A. Effective on January 1, 2013
1, An ad valorem tax equivalent to 15 percent of the net retail price (excluding excise tax and value-added tax) per proof liter; and
2. A specific tax of twenty pesos (PhP20.00) per proof liter.
B. Effective on January 1, 2015
1. An ad valorem tax equivalent to 20 percent of the net retail price (excluding excise tax and value-added tax) per proof liter; and
2. A specific tax of twenty pesos (PhP20.00) per proof liter.
C. Effective on January 1, 2016 and every year thereafter, the specific tax of twenty pesos (PhP20.00) shall increase by four percent.
The excise tax on wines is based on the following schedule:
A. Effective on January 1, 2013
For sparkling wines regardless of proof, if the net retail price (excluding excise tax and value-added tax) per 750 ml is:
a. Five hundred pesos (PhP500.00) or less, the excise tax is two hundred fifty pesos (PhP250.00);
b. More than five hundred pesos (PhP500.00), the excise tax is seven hundred pesos (PhP700.00).
For still wines and carbonated wines containing fourteen percent alcohol by volume or less, the excise tax is thirty pesos (PhP30.00).
For still wines and carbonated wines containing more than fourteen percent alcohol by volume but not more than twenty-five percent alcohol by volume, the excise tax is sixty pesos (PhP60.00).
B. Effective on January 1, 2014 and every year thereafter, the excise tax imposed shall increase by four percent.
C. Fortified wines (natural wines to which distilled spirits are added to increase their alcohol strength) containing more than twenty-five percent alcohol by volume are classified as distilled spirits.
The excise tax on beer, lager beer, ale, porter and other fermented liquors except tuba, basi, tapuy, and similar fermented liquors is based on the following schedule:
A. Effective on January 1, 2013
If the net retail price (excluding excise tax and value-added tax) per liter is fifty pesos and sixty centavos (PhP50.60) or less, the excise tax is fifteen pesos (PhP15.00) per liter;
If the net retail price (excluding excise tax and value-added tax) per liter is more than fifty pesos and sixty centavos (PhP50.60), the excise tax is twenty pesos (P20.00) per liter.
B. Effective on January 1, 2014
If the net retail price (excluding excise tax and value-added tax) per liter is fifty pesos and sixty centavos (PhP50.60) or less, the excise tax is seventeen pesos (PhP17.00) per liter;
If the net retail price (excluding excise tax and value-added tax) per liter is more than fifty pesos and sixty centavos (PhP50.60), the excise tax is twenty one pesos (PhP21.00) per liter.
C. Effective on January 1, 2015
If the net retail price (excluding excise tax and value-added tax) per liter is fifty pesos and sixty centavos (PhP50.60) or less, the excise tax is nineteen pesos (PhP19.00) per liter;
If the net retail price (excluding excise tax and value-added tax) per liter is more than fifty pesos and sixty centavos (PhP50.60), the excise tax is twenty-two pesos (PhP22.00) per liter.
D. Effective on January 1, 2016
If the net retail price (excluding excise tax and value-added tax) per liter is fifty pesos and sixty centavos (PhP50.60) or less, the excise tax is twenty-one pesos (PhP21.00) per liter.
If the net retail price (excluding excise tax and value-added tax) per liter is more than fifty pesos and sixty centavos (PhP50.60), the excise tax is twenty-three pesos (PhP23.00) per liter.
E. Effective on January 1, 2017, the excise tax on all fermented liquors is twenty-three pesos and fifty centavos (PhP23.50) per liter.
F. Effective on January 1, 2018 and every year thereafter, the excise tax shall increase by four percent.
G. Fermented liquors which are brewed and sold at micro-breweries or small establishments such as pubs and restaurants shall be subject to a specific tax of twenty-eight pesos (PhP28.00) per liter effective on January 1, 2013. Effective on January 1, 2014 and every year thereafter, the specific tax shall increase by four percent.
For inquiries, please contact:
Ma. Rosario O. Puno
Chief and Officer-in-Charge
Excise LT Regulatory Division
Bureau of Internal Revenue
Room 102 Ground Floor National Office Bldg.
Diliman, Quezon City
Tel: (+632) 928-8501 ext. 7580
Import Requirements for Food Products
The Philippines is a signatory to the World Trade Organization (WTO) and has lifted quantitative restrictions (QRs) on imports of food products except for rice. Tariff-Rate Quotas (TRQs) still remain on a number of sensitive products such as corn, poultry meat, pork, sugar, and coffee. Minimum Access Volumes (MAV) have been established for these commodities.
Sanitary and phytosanitary import clearances that serve as import licenses are required prior to the importation of all agricultural commodities, including feeds, live animals, meat and poultry products, plant and plant products, seafood, and fishery items. In addition, a minimum access volume certificate is required for products entering at the lower in-quota duty such as pork, poultry, corn, coffee, and coffee extract. In all cases, imported meat, fish, and produce require a registered importer to receive the shipment.
Import Regulations for Processed Food Products
Philippine food regulations generally follow the U.S. Food and Drug Administration policies and guidelines for food additives, good manufacturing practices, and suitability of packaging materials for food use. Hence, compliance with U.S. regulations for packaged foods, particularly for labeling, will almost always assure compliance with Philippine regulations. All food products offered for sale in the Philippines must be registered with the Philippine Food and Drug Administration (FDA). Registration of imported products may only be undertaken by a Philippine entity, although some documentation and, for certain types of products, samples need to be provided by the exporter.
Products have been divided into three categories:
Low Risk (LR) Food Products are foods that are unlikely to contain pathogenic microorganisms and will not normally support their growth because of food characteristics that are unlikely to contain harmful chemicals. This includes snack foods, breakfast cereals, pasta and noodles, alcoholic beverages, coffee, tea, refined and raw sugars, and honey.
Medium Risk (MR) Food Products are foods that may contain pathogenic micro-organisms but will not normally support their growth because of food characteristics; or food that is unlikely to contain pathogenic micro-organisms because of food type or processing, but may support the formations of toxins or the growth of pathogenic micro-organisms. This includes milk powder, tomato products, canned or bottle fruit and vegetable preserve, processed meat and poultry, processed fish and fish products.
High Risk (HR) Food Products are foods that may contain pathogenic micro-organisms and will support the formation of toxins or the growth of pathogenic micro-organisms and foods that may contain harmful chemicals. This includes milk and dairy based drinks, cheese, frozen processed meat, and infant formula.
Each class per brand of product must be registered with the FDA by the importer before the product can be imported. Only products with a valid Certificate of Product Registration from the FDA will be allowed for sale in the Philippines.
The following is the list of requirements for the initial registration of food products:
- Completed Integrated Application Form as prescribed by current FDA regulations;
- Proof of Payment of Fees as prescribed by current FDA regulations;
- Clear and complete loose labels or artwork, as applicable, of all packaging sizes, or equivalent as defined by FDA regulations except for bulk raw materials, ingredients and food additives intended for further processing or for distribution to establishments/manufacturers for further processing;
- Pictures of the product from all angles and in different packaging sizes, and from at least two different perspectives allowing visual recognition of a product as the same with the others being registered, as applicable.
- For food supplements, a sample in actual commercial presentation must be submitted.
- As applicable, documents to substantiate claims, such as technical, nutritional or health studies or reports, market-research studies, Certificate of Analysis, quantitative studies and computations, scientific reports or studies published in peer-reviewed scientific journals, certificates or certification to support use of logo/seal on Halal, Organic, or Kosher foods and in compliance with current labelling regulations.
A Certificate of Product Registration (CPR) shall be issued by the FDA and shall be valid for two years. Subsequent renewal of CPR shall be valid for a period of five years.
Exporters must be aware that the Philippine importer needs to secure a license to operate (LTO) from the FDA to import these products. This is a prerequisite for the registration of all food products. The license lists names of foreign suppliers or sources of the products being registered.
The cost of an initial two-year licensing fee is US$80 (PhP4,000). Renewal of License to Operate, valid for five years, is US$160 (PhP8,000).
More information on the types of food products falling under each risk category, as well as the complete requirements for product registration and application for license to operate is available at the link below:
Import Regulations for Plant Products
The Bureau of Plant Industry (BPI) regulates imports of all plant products, including live plants, and fresh and processed fruits and vegetables. All imported plant products and planting materials, including highly processed plant products (for example, frozen French fries and raisins) require Phytosanitary Quarantine Clearances (PQC) from BPI, which also serve as import licenses. These permits are applied for by an accredited Philippine importer for each shipment and must be secured for all imports before the shipment leaves the country of origin. BPI accepts the following certificates for highly processed plant products in lieu of the USDA Phytosanitary Certificates:
1) A certified true copy of the Philippine Food and Drug Administration/Bureau of Food and Drug (FDA) Certificate of Product Registration (CPR); and a photocopy of the U.S. Federal or State Government Health Certificate/Certificate of Free Sale; OR
2) Original U.S. Federal or State Government Health Certificate/Certificate of Free Sale.
Import Regulations for Meat and Poultry Products
In 2005, the Department of Agriculture issued Administrative Order No. 26 (AO 26), which updated its Administrative Order No. 39 (2000) or the “Revised Rules, Regulations and Standards Governing the Importation of Meat and Meat Products into the Philippines.” AO 26 reiterates the need for a DA-accredited importer to obtain a Veterinary Quarantine Clearance (VQC) certificate prior to the importation of meat and meat products. A VQC will now be valid for 60 days from the date of issuance, within which the meat or meat products are to be shipped from the country of origin. A VQC is non-transferable and can only be used by the consignee to whom it was issued. A one shipment/bill-of-lading per VQC issued policy is strictly followed. The complete text of Administrative Order No. 26 may be obtained at: http://www.da.gov.ph/agrilaws/ao_2005/ao_26.pdf.
At present, all U.S. meat establishments that are regulated and inspected by the USDA Food Safety and Inspection Service (FSIS) are eligible to export meat and poultry to the Philippines.
There is a great deal of sensitivity in the Philippines tp U.S. food products that are packed in cartons with labels indicating shipment to another country. Such markings should be covered or removed since the Philippines does not require the cartons to be marked for export to the Philippines.
A summary of Philippine export requirements for meat and poultry products from the United States may be obtained from: http://www.fsis.usda.gov/wps/portal/fsis/topics/international-affairs/exporting-products/export-library-requirements-by-country/Philippines.
Sensitive Agricultural Products
Tariff rates for sensitive agricultural products were established in Executive Order 313 of March 1996, which set varying in-quota and out-quota rates for products considered important to domestic agriculture: pork, poultry, coffee, sugar, rice and corn. In-quota rates apply to products imported within established minimum access volumes (MAV). Any imports in excess of the MAV are assessed the out-of-quota rate. MAV products are those for which the Philippine Government is committed to providing minimum market access in exchange for the lifting of quantitative import restrictions in the WTO.
The MAV Administration, including its allocation, is handled by a special MAV Management Committee. Please contact the USDA Foreign Agricultural Service in Manila (AgManila@fas.usda.gov) for further information on minimum access volumes and current MAV license holders.
Rice is considered the country’s most sensitive agricultural product. In 2002, the Philippine Government opened its rice market when it allowed the private sector, mainly traders, to import rice. Prior to this, the National Food Authority (NFA) was the sole importer of rice. Rice imports are assessed a 40 percent in-quota tariff and a 50 percent tariff for volumes beyond the quota. Import licenses are regulated by the NFA. In 2004, the government completed negotiations with other WTO members for the extension of its quantitative restrictions (QR) on rice, and in December 2006, its request for extension was approved.
In July 2014, the WTO granted the Philippines request to extend quantitative restrictions on rice imports through July 2017. In exchange, the in-quota limit was raised to 805,200 MT (from 350,000 MT) and the in-quota tariff reduced from 40 percent to 35 percent (the out-of-quota tariff remained at 50 percent), through July 1, 2017. On November 5, 2015, Philippine President Aquino III signed Executive Order No. 190 (EO 190) which put in effect the 805,200 MT MAV and the corresponding MFN tariff changes.
The third and final QR expired in July 2017 and legislators are in the process of amending an existing local law (i.e., Republic Act No. 8178 or RA 8178) to replace the quota with tariffs.
Import Regulations for Biotechnology-Derived Products
On April 3, 2002, the Department of Agriculture issued Administrative Order No. 8 (AO 8), which regulates the importation and release into the environment of genetically modified plants and plant products. The Bureau of Plant Industry issues permits for the importation of regulated articles and/or combined trait products for contained use or trials, as well as for direct use as food or feed or for direct processing of genetically-modified (GM) plants and plant products. Under AO 8, no regulated article shall be imported or released into the environment without the conduct of a satisfactory risk assessment.
A Joint Department Circular (JDC) was approved in March 2016 that replaced existing Philippine genetically engineered (GE) regulations embodied in the Philippine Department of Agriculture’s Administrative Order No. 8 (AO 8). AO 8 was replaced after the Philippine Supreme Court, in a December 8, 2015 decision, ruled that AO 8 did not sufficiently cover minimum requirements of the principles of risk assessment as embodied in the National Biosafety Framework. The JDC requires more public consultation and provides more consideration to socio-economic issues and environmental impacts in risk assessment procedures, compared to AO 8. The JDC was implemented on April 14, 2016.
All shipments of regulated articles must be accompanied by a letter declaring the shipment may or may not contain GMOs. This declaration is issued by the shipper, importer, certified laboratory or responsible office in the country of origin.
A detailed report that specifically addresses import regulations and standards entitled “The Philippines: Food and Agricultural Import Regulations & Standards Country Report (FAIRS),” can be obtained from the FAS homepage. Choose “Market and Trade Data”, “Attaché Report Search”, and then select “FAIRS Country Reports.” You can also access the report through the following URL:
Import Requirements for Pharmaceutical Products
A U.S. firm that desires to export pharmaceutical products for commercial distribution to the Philippines must secure License to Operate (LTO) and Certificate of Product Registration (CPR) from the Philippine Food and Drug Administration (FDA). FDA is the government regulatory agency tasked with the administration and enforcement of laws pertaining to the manufacture and sale of food, drugs, and cosmetics in the Philippines.
The FDA also regulates household/urban hazardous substances and health devices. Importers of these products must also secure CPR prior to distribution and marketing in the Philippines.
The checklist of requirements for obtaining a license to operate and a certificate of product registration may be found in the following links:
Queries related to pharmaceutical product imports:
Atty. Katherine M. Austria Lock
Center for Drug Regulation and Research (CDRR)
Food and Drug Administration
Civic Drive, Filinvest Corporate City , Alabang, Muntinlupa City
Tel: (+632) 857-1990
Email: firstname.lastname@example.org; email@example.com