QuestionsQuestions (EXECUTIVE ORDER NO. 440)
EO 440 reduces (or restores to original) the rates of import duty on specifically listed crude petroleum oils and refined petroleum products, modifying the rates previously set under EO 336, consistent with the President’s authority under RA 8479 (Downstream Oil Industry Deregulation Act) and the Tariff and Customs Code of 1978.
It imposes a single and uniform tariff duty of three percent (3%) on both imported crude oil and imported refined petroleum products, subject to a presidential power to reduce the rate when warranted, and automatic adjustment beginning Jan. 1, 2004 (or upon WTO/ASEAN tariff program implementation).
Sections 401 and 402 of PD 1464 (Tariff and Customs Code of 1978) empower the President to increase, reduce, or remove existing import duty rates and to modify the form of duty and tariff nomenclature under Section 104.
EO 440 explains that EO 336 adjusted duties from three percent (3%) to five percent (5%) on listed petroleum products, and EO 440 modifies that adjustment by restoring the original MFN and AFTA-CEPT rates specified in its Annex.
Only the articles specifically listed in Annex “A” are affected. They are identified by their tariff classification under Section 104 of the Tariff and Customs Code of 1978 (as amended).
Section 1 provides that listed articles formerly raised to 5% are instead subject to the original MFN and AFTA-CEPT rates in Annex A. Section 4 operationalizes this by stating that articles entered and withdrawn from warehouses for consumption shall be levied the MFN rates.
MFN rates are applied broadly to imports regardless of origin, while AFTA-CEPT rates apply specifically to imports from ASEAN member states that grant CEPT concessions for the same product, subject to origin rules.
Under Section 5, once EO 440 takes effect, listed articles entered and withdrawn for consumption are imposed AFTA-CEPT rates if the imports qualify under the Rules of Origin under the CEPT Agreement.
It provides the legal basis for according CEPT (AFTA-CEPT) rates to imports coming from ASEAN Member States applying CEPT concessions to the same product, as reflected in Annex A and interpreted under the CEPT Agreement and its Interpretative Notes.
Section 3 states that rates of import duty on tariff headings not enumerated and those listed but represented by the symbol “X X X” shall remain in force and effect.
It shall take effect on the date of effectivity of RA 9337 (VAT Reform Law), specifically upon the effectivity of the VAT Reform Law.
The text states RA 9337 expands the VAT base, including imposing VAT on petroleum products, which is expected to increase government revenues but also increase retail prices, prompting the government to adjust import duty rates accordingly.
To explain that while excise taxes may have been reduced to zero for certain socially sensitive products (kerosene, diesel, fuel oil), implementation of RA 9337’s VAT expansion still increases retail prices—hence the need for tariff duty adjustments under EO 440.
Section 6 revokes or modifies all presidential issuances, administrative rules and regulations, or parts thereof that are contrary to or inconsistent with EO 440.
Section 7 requires publication in two (2) newspapers of general circulation. Publication is important for due process and notice, and it is a condition tied to the law’s effectiveness framework.
RA 8479’s automatic adjustment provisions (starting Jan. 1, 2004 or upon implementation of uniform tariff programs) set the baseline expectation for tariff levels, while EO 336 and EO 440 are specific presidential issuances exercising statutory tariff powers to modify rates for interim revenue measures and later policy alignment with Congress’s tax laws (VAT on petroleum products).