Law Summary
Post-Operative Tariff Protection
- The project requires post-operative tariff protection against competition from imported synthetic fibers.
- Such protection is in the form of increased customs duties on imported polyester fibers.
- This tariff protection is granted pursuant to Section 8(c) of Republic Act No. 5186 (Investment Incentives Act).
- The increased tariffs may be modified during their effectivity based on a review by the Tariff Commission.
- Modifications follow Section 401 of the Tariff and Customs Code, considering the tariff structure on imported textiles and domestic industry conditions.
Schedule of Import Duty Rates (Section 1)
- Specific articles classified under Section 104 of Republic Act No. 1937 are subject to designated import duties:
- Yarn of continuous synthetic or artificial textiles (Tariff Heading 51.01):
- Polyester filament yarn: 50% ad valorem duty, except when directly imported by textile mills with prior authorization from the Tariff Commission and Board of Investments.
- Other yarns: 30% ad valorem duty.
- Discontinuous synthetic or artificial textiles (Tariff Heading 56.01):
- Polyester staple fibers: 30% ad valorem duty, except when directly imported by textile spinning mills with prior authorization.
- Other discontinuous synthetic fibers: 5% ad valorem duty.
- Yarn of continuous synthetic or artificial textiles (Tariff Heading 51.01):
Effective Date of Import Duties (Section 2)
- Import duties prescribed apply to articles entered or withdrawn from warehouse for consumption in the Philippines.
- The rates become effective 30 days after the issuance of the executive order.
Price Control and Adjustment Mechanism (Section 3)
- Any unjustified increase in the prices of locally produced products benefiting from these tariff changes can trigger modifications in tariff rates.
- The Board of Investments is responsible for presenting cases of price increases to the Tariff Commission for appropriate action.
Legal Authority and Execution
- The executive order is issued under the authority of President Ferdinand E. Marcos.
- It is based on recommendations from the Board of Investments and statutory provisions of the Investment Incentives Act.
- The Executive Secretary formally promulgated the order in Manila on January 21, 1972.