Law Summary
Justification for Tariff Protection
- Studies from the Board of Investments and the Department of Industry identified increased raw material costs.
- These cost increases threaten the viability of the local phthalic anhydride industry.
- Competing imported items drain the country’s foreign exchange resources.
- Tariff protection is deemed necessary as an interim measure.
Grant of Post-Operative Tariff Protection
- The President certifies that phthalic anhydride production is entitled to post-operative tariff protection.
- This protection is in the form of increased customs duties on imported phthalic anhydride.
- Tariff rates can be modified during the effectivity period based on industry conditions.
- Modifications follow Section 401 of the Tariff and Customs Code.
Specific Tariff Classifications and Rates (Section 1)
- Articles are covered under Section 104 of Republic Act No. 1937 as amended by Presidential Decree No. 34.
- Tariff Heading Breakdown:
- 29.15 A: Polycarboxylic acids and derivatives including dimethyl terephthalate and terephthalic acid, subject to a 10% ad valorem duty.
- 29.15 B: Phthalate plasticizers and esters of phthalic anhydrides, subject to a 50% ad valorem duty.
- 29.15 C: Phthalic anhydrides specifically, subject to a 30% ad valorem duty.
Effectivity and Enforcement (Section 2)
- The tariff rates apply 30 days after issuance of the Executive Order.
- Applicable to articles entered or withdrawn from warehouses for consumption in the Philippines.
Legal Authority and Implementation
- Issued under the constitutional powers of the President of the Philippines.
- Based on Section 8(c) of Republic Act No. 5186 (Investment Incentives Act).
- Reflects governmental efforts to support nascent industries via protective tariffs.