Law Summary
Purpose and Background
This Executive Order modifies the nomenclature and rates of import duty on certain imported articles, as per Section 104 of the Tariff and Customs Code of 1978, aiming to enhance global competitiveness and streamline customs administration in the Philippines.
- Global Competitiveness Focus: Aligns with the Medium-Term Philippine Development Plan (MTPDP) 1993-1998 emphasizing economic and human development.
- Trade Liberalization Agreement: Resulted from discussions at the Economic Caucus (July 22, 1993) and the People’s Economic Summit (September 8, 1993).
- Tariff Reduction Commitment: Announced in the State of the Nation Address (July 25, 1994) to achieve a uniform tariff rate.
Modification of Import Duties
The Executive Order sets forth specific modifications to the import duty rates applicable to certain articles.
- Authority: Based on Section 401 of the Tariff and Customs Code, which allows the President to alter import duties upon NEDA's recommendation.
- Annex A: Specific articles and their corresponding rates of import duty are detailed in Annex A of the Order.
Implementation of Tariff Structure
The Executive Order establishes a two-tiered tariff structure set for full implementation by January 1, 2003.
- Tariff Rates:
- Raw Materials: 3%
- Finished Products: 10%
- Future Uniform Rate: From January 1, 2004, a uniform ad valorem rate of 5% will apply to the listed articles.
Continuation of Existing Duties
Duties on tariff headings not specified or marked with "xxx" in Annex A will remain unchanged.
- Existing Rates: All current duties on unspecified tariff headings remain in force until further notice.
Duty Levies on Consumption
Upon enactment, the prescribed duties will apply to articles entering or being withdrawn for consumption in the Philippines.
- Effective Date: Duties come into effect starting 30 days post-publication in two newspapers of general circulation.
Revocation of Conflicting Issuances
This Executive Order revokes or modifies previous orders and regulations that conflict with its provisions.
- Executive Order 204 (s. 1994): Specifically mentioned as being revoked where inconsistent with this Executive Order.
Publication Requirement
The Executive Order mandates publication before it takes effect.
- Publication: Must occur in two newspapers of general circulation for the Order to become effective.
Key Takeaways
- Objective: To achieve global competitiveness through trade liberalization and a simplified tariff structure.
- Tariff Structure: Introduction of a two-tiered tariff system transitioning to a uniform rate.
- Implementation Timeline: Key dates include January 1, 2003, for the two-tier system and January 1, 2004, for the uniform rate.
- Revocation of Conflicting Rules: Conflicting Presidential issuances are revoked to align with this Order's provisions.
This Executive Order is significant in shaping the future landscape of import duties in the Philippines, promoting a competitive environment for local industries against foreign products.