Import Shipment Procedure in the Philippines: A Guide

An archipelago comprising 7,641 islands, the Philippines shares its sea borders with Indonesia, China, Japan, Taiwan, Palau, Malaysia, and Vietnam. Philippines’ top trade destinations include Singapore, Japan, China, Korea, and the United States. Here are the best import shipment procedures and practices to follow in the Philippines.

Importer Registration

In order to list yourself as an importer, first and foremost, the business requires an Import Clearance Certificate which is issued by the Bureau of Internal Revenue. Post this, importers register with the BOC (Bureau of Customs) and simultaneously open an account with the CRPS (Client Profile Registration System). The Customs Client Profile Accreditation costs US$20 which is around P1000 and takes 15 days to process. This accreditation needs to be updated annually whereas, the import clearance certificate has a validity of three years.

Imported goods Classification

Importation in the Philippines falls under 4 classifications:

• Free Importation – goods that can be freely imported
• Regulated importation – goods that are subject to certain regulations and require permits, declaration, and clearances
• Restricted importation – unless authorized by law these goods are restricted from entering the country
• Prohibited importation – goods that are absolutely prohibited from crossing borders

What category the goods to be imported fall under, can be verified with:

1.     Bureau of Customs - Customer Assistance and Response Services can be reached by dropping an email to boc.cares@customs.gov.ph or visiting the BOC website at https://customs.gov.ph/.

2.     Bureau of Import Services of the Department of Trade and Industry – You can visit its website at https://www.dti.gov.ph/negosyo/imports/import-facilitation/. Apart from the category of imports, you will find information on the import procedures, guidelines for accreditation, import clearance, and other important import information

3.     The Department of Agriculture (https://www.da.gov.ph) verifies the import status of agricultural products and declares the requirement for a Minimum Access Volume (MAV) Import Certificate. The MAV import certificate is required for the import of products such as chicken, pork, etc.

Documents Required

The import shipment procedure in the Philippines cannot be carried out without the following documents.

A printout of the Single Administrative Document (SAD) which requires the signatures of the declarant and customs broker, if any. It needs to be duly notarized and submitted to the Formal Entry Division (FED) or its corresponding office along with the below-mentioned documents:

1.     Duly endorsed Airway Bill or Bill of Lading, or certification by the vessel or aircraft carrier/ agent

2.     Letter of Credit, commercial invoice, or any other certifiable commercial document that provides proof of payment. If there is no sale then the commercial value of the goods needs to be declared.

3.     Packing list

4.     Duly notarized Supplemental Declaration on Valuation (SDV)

5.     Documents that may be required as per the rules and regulations are:

• Clearance or Import Permit;
• Proof of Origin for Free Trade Agreements (FTAs);
• Authority to Release Imported Goods (ATRIG);
• Copy of an Advance Ruling if the ruling was used in the goods declaration;
• Discharge Port Survey Reports or Load Port Survey Reports for bulk or break-bulk importations;
• Document proving duties and taxes exemption;
• Other documents such as Tax Debit Memo (TDM) or Tax Credit Certificate (TCC)

Tariffs and Taxes for importers

The Philippines follows the United Nation’s SITC (Standard International Trade Classification). Import tariffs range anywhere from zero to 65 percent. If the goods being imported are in production domestically, they tend to incur higher tariffs. Non-agricultural goods tariffs are around 6.7%.

A VAT (value-added tax) of 12% is applicable for imported goods by the Philippines Customs. For goods that are under the value of P10,000 (US$200), no tariff or tax is levied

Philippines is a member of the ASEAN (Association of Southeast Asian Nations) and benefits from significantly reduced tariff rates, barring a few sensitive food products. The Philippines has signed five FTAs with the following countries: India, China, Australia, and New Zealand, Japan, and Korea.

Conclusion

The Philippines is a strategic and dynamic trading nation. It complies with the ASEAN-wide economic integration, providing immense opportunities to both exporters and importers. Staying well versed with export and import shipment procedures and up-to-date with the local knowledge can ensure smooth trade with the country and avert any customs-related interruptions and frustrations.