Policy basis and constitutional/statutory anchors
- The Executive Order is grounded on the long-standing commercial practice of barter in the Southern Philippines.
- It recognizes regional trade integration through BIMP-EAGA, where barter is a major form of commercial exchange.
- It acknowledges Section 104 of Republic Act No. 10863 (Customs Modernization and Tariff Act) that imported goods are subject to duty upon importation, including goods previously exported, except as otherwise provided by law.
- It relies on the ASEAN Free Trade Agreement and the ASEAN Trade in Goods Agreement (ATIGA) effective preferential tariff scheme, including elimination of import duties on several products traded within the region, with exceptions for rice, corn and sugar.
- It implements Article V, Section 2(e) of Republic Act No. 11054 (Organic Law for the Bangsamoro Autonomous Region in Muslim Mindanao), which provides that the Bangsamoro Government exercises authority over barter and countertrade, without prejudice to the general supervision of the President.
- It is issued under the President’s constitutional control and duty to ensure faithful execution of laws, as referenced in Section 17, Article VII of the 1987 Constitution.
Mindanao Barter Council: creation and attachment
- The Mindanao Barter Council (MBC) is created to supervise, coordinate, and harmonize policies, programs, and activities on barter in the Southern Philippines (Section 1).
- The MBC facilitates an enabling environment conducive to the growth and development of barter in Mindanao (Section 1(a)).
- The MBC formulates and issues rules and regulations on the registration or accreditation of qualified traders authorized to engage in barter within Barter Ports, including the imposition of reasonable registration fees and facilitation of documentary requirements needed to avail of zero-tariff benefits under the ATIGA (Section 1(b)).
- The MBC issues comprehensive guidelines governing barter, including: (1) a mechanism for the valuation of barter goods, (2) a list of allowable barter goods, and (3) measures to prevent smuggling and circumvention of customs laws (Section 1(c)).
- The MBC reviews existing government agency policies, rules, and regulations affecting barter and submits recommendations to the President and Congress (Section 1(d)).
- The MBC performs other functions as may be assigned by the President (Section 1(e)).
- The MBC is attached to the Department of Trade and Industry (DTI) for policy and program coordination (Section 1).
- The MBC establishes a principal office in Jolo, Sulu, as necessary and practicable (Section 1).
- The MinDA provides technical, administrative, and secretariat support to the MBC (Section 3).
Council composition and participation
- The MBC chairperson is the DTI Secretary (Section 2).
- The MBC vice-chairpersons are the Chairperson of the Mindanao Development Authority (MinDA) and the Commissioner of the Bureau of Customs (BOC) (Section 2).
- Members are representatives of specified agencies with rank not lower than an Assistant Secretary and with full authorization to decide for their respective agencies (Section 2).
- The member agencies include:
- Department of Finance
- Department of Foreign Affairs
- Department of Agriculture
- DTI - Autonomous Region in Muslim Mindanao
- Maritime Industry Authority
- Philippine Coast Guard
- Philippine Ports Authority (Section 2).
- The MBC may call on or invite representatives from major Muslim ethno-linguistic groups, including Tausug, Maguindanaoan, Maranaw, Yakan, and Sama, to participate in its proceedings (Section 2).
Barter ports and where barter may occur
- Barter Ports are established in Siasi and Jolo in Sulu, and Bongao in Tawi-Tawi (Section 4).
- Creation of Barter Ports in other areas requires approval of the President, upon the recommendation of the MBC (Section 4).
- Barter Ports pertain only to ports accredited by the MBC in the locations stated (Section 4).
- Barter Ports exclude ports owned or operated by private individuals or entities (Section 4).
- The BOC and the Bureau of Internal Revenue must establish offices in Barter Ports to ensure systematic and streamlined processing of entry and exit of allowable barter goods (Section 4).
Allowable barter goods and customs/tax rules
- Goods traded under the barter system must enter Philippine territory only through Barter Ports established for that purpose (Section 5).
- Goods enjoying tariff protections and/or quantitative restrictions—specifically including rice, corn and sugar—remain regulated by applicable laws, rules, and regulations (Section 5).
- Goods requiring special import permits and/or subject to standard requirements remain regulated by applicable laws, rules, and regulations (Section 5).
- Qualified traders must import or export allowable barter goods only after securing the required goods declaration or export declaration, clearances, licenses, and any other requirements prescribed under existing laws (Section 5).
- For importation, submission of requirements after arrival but before release from customs custody is governed by relevant laws, rules, and regulations (Section 5).
Applicability of existing trade remedies and taxes
- The Executive Order preserves the operation of existing mechanisms on countertrade, prosecution of dumping protests, countervailing measures, safeguards, and other trade remedies (Section 6).
- The free entry of goods within the framework of ATIGA does not override those existing mechanisms (Section 6).
- National and local tax laws apply to all goods imported under this Order where the valuation determined by appropriate authorities exceeds PHP 10,000.00, or a threshold amount adjusted by the Secretary of Finance pursuant to Republic Act No. 10863 (Section 6).
Funding, fees, and accrual of registration proceeds
- Operationalization of the MBC is funded from sources to be determined by the Department of Budget and Management, subject to government accounting and auditing laws, rules, and regulations (Section 7).
- Appropriations for succeeding years are incorporated in the regular budget of the DTI (Section 7).
- Proceeds from registration fees collected under this Order accrue to the general fund of the National Government (Section 7).
- Registration fee proceeds must be remitted monthly to the National Treasury (Section 7).
Duration, separability, repeal, and sunset operation
- The MBC performs its functions until the Bangsamoro Government is organized and an office on barter becomes fully operational, unless sooner dissolved by the President (Section 8).
- If any provision of the Executive Order is declared invalid, illegal, or unconstitutional, the unaffected provisions remain in force (Section 9).
- Executive Order No. 427 (s. 1990), Memorandum Order No. 160 (s. 1993), MO No. 304 (s. 1995), and all other inconsistent orders, rules, regulations, and related administrative issuances are repealed, amended, or modified accordingly (Section 10).