Includes the barriers (tariff and non-tariff) that U.S. companies face when exporting to this country.
The average tariffs on agricultural products stand at 11.63% for July 1 to December 31, 2020. The Philippines maintains a two-tiered tariff policy for sensitive agricultural products including rice, corn, pork, chicken meat, sugar, and coffee. These products are subject to a tariff rate quota (TRQ) and all imports outside of the minimum access volume are taxed at a higher out-of-quota rate. In-quota and out-of-quota tariff rates averaged 36.5% and 41.2%, respectively, and have not changed since 2005.
On February 14, 2019, President Rodrigo Duterte signed into law the Republic Act (RA) No. 11203 or “An Act liberalizing the importation, exportation, and trading of rice, lifting for the purpose the quantitative import restriction on rice, and for other purposes”. The law amends RA No. 8178 or the Agricultural Tariffication Act of 1996 and replaces the quantitative restrictions (QR) on rice imports with tariffs.
On January 18, 2021, President Duterte signed Executive Order No. 123, maintaining the 5% tariff on mechanically deboned or mechanically separated poultry meat (MDM/MSP). Scheduled to increase to 40% on January 1, 2021, local stakeholders successfully petitioned to preserve the lower duty through December 31, 2022. EO 123 separates the matter of lower tariff rates with the previous tariff concessions given to trading partners in connection with the Philippines’ quantitative restrictions on rice imports. Other tariff concessions given to trading partners have expired with passage of RA 11203, with the rates of several major U.S. agricultural products (including frozen potatoes and some dairy products) returning to their higher previous levels.
Aiming to diversify market sources and maintain affordable rice prices, on May 15, 2021 President Duterte signed Executive Order 135, levying a unified rate of 35% duty for both in- and out-of-quota Most Favored Nation (MFN) tariff rates. The order places the MFN duty in line with the ASEAN rate of 35% and will expire in one year.
Responding to surging pork prices due to African swine fever’s devastating impact on the hog sector, the Philippines has temporarily lowered pork tariff rates and increased the quota volume. On May 15, 2021, Executive Order 134 was issued setting pork tariffs lower than the original 30% in-quota and 40% out-quota rates. The President also issued Executive Order 133 on May 11, 2021, raising the Minimum Access Volume or tariff rate quota of pork imports from 54,210 MT to 254,210 MT.
At present, a few TRQ products have achieved unified in-quota and out-of-quota tariff rates, including chicken, frozen or chilled (40%); turkey livers, frozen or chilled (40%); potatoes, fresh and chilled (40%); and roasted coffee beans (40%). Currently, there is an additional special safeguard duty in place for chicken meat, which effectively doubles the rate of out-of-quota tariff protection. Administrative Order (A.O.) 9 of 1996, as amended by A.O. 8 of 1997 and A.O. 1 of 1998, established rules for implementing TRQs and allocating import licenses.
Excise Taxes on Alcohol Products
Republic Act (RA) No. 11467 provides a structure for increasing excise taxes each year and the law does not include a sunset provision. Below are the details of RA 1147 per alcohol product category:
The ad valorem tax on distilled spirits is 22% of the net retail price (excluding excise tax and value added tax). For 2021, the specific tax is ₱47.00 per proof liter, and will increase to ₱52.00 in 2022, ₱59.00 in 2023, ₱66.00 in 2024, and by 6% every year thereafter, effective on January 1, 2025. The ad valorem tax puts imported alcohol products at a price disadvantage compared to alcohol products made from locally sourced ingredients.
A specific tax of ₱53.00 per liter is levied on all types of wines. The rate will increase 6% effective on January 1, 2022, and every year thereafter. This is a departure from the previous tax structure which varied according to the wine type, price, and alcohol content. More sparkling wines are expected to enter the market boosted by the lower excise tax.
Other Fermented Liquor
For 2021, the specific tax on other fermented liquor including beer is ₱37.00 per liter. It will increase by ₱2.00 each year until it reaches ₱43.00 in 2024, and increase 6% effective on January 1, 2025, and every year thereafter.
For more information, please see the FAS information on the Philippines: New Excise Tax Structure for Alcohol Products.
Import Requirements for Agricultural Products
The Philippines is a signatory to the World Trade Organization (WTO) and has lifted quantitative restrictions on imports of all food products, including rice most recently. Tariff-Rate Quotas (TRQs) remain on a number of sensitive products such as corn, poultry meat, pork, sugar, and coffee. Minimum Access Volumes (MAV) have been established for these commodities.
Sanitary and phytosanitary import clearances that serve as import licenses are required prior to the importation of all agricultural commodities, including feeds, live animals, meat and poultry products, plant and plant products, seafood, and fishery items. In addition, a minimum access volume certificate is required for products entering at the lower in-quota duty such as pork, poultry, corn, coffee, and coffee extract. In all cases, all agricultural and food products require a registered importer to receive the shipment.
In 2010, the Philippines issued Administrative Order 9, requiring that an SPSIC be issued to an accredited importer prior to shipment of imported food and agricultural products to the country (e.g., plant and plant products, fishery products, live animals, meat and poultry products, fertilizers, animal feed, and pet food) and functions as an import permit.
Import Regulations for Processed Food Products
Philippine food regulations generally follow the U.S. Food and Drug Administration policies and guidelines for food additives, good manufacturing practices, and suitability of packaging materials for food use. Hence, compliance with U.S. regulations for packaged foods, particularly for labeling, will almost always assure compliance with Philippine regulations. All food products offered for sale in the Philippines must be registered with the Philippine Food and Drug Administration (FDA). Registration of imported products may only be undertaken by a Philippine entity, although some documentation and, for certain types of products, samples need to be provided by the exporter.
Products are divided into three categories:
Low Risk Food Products are foods that are unlikely to contain pathogenic microorganisms and will not normally support their growth because of food characteristics that are unlikely to contain harmful chemicals. This includes snack foods, breakfast cereals, pasta and noodles, alcoholic beverages, coffee, tea, refined and raw sugars, and honey.
Medium Risk Food Products are foods that may contain pathogenic micro-organisms but will not normally support their growth because of food characteristics; or food that is unlikely to contain pathogenic micro-organisms because of food type or processing but may support the formations of toxins or the growth of pathogenic micro-organisms. This includes milk powder, tomato products, canned or bottle fruit and vegetable preserve, processed meat and poultry, processed fish and fish products.
High Risk Food Products are foods that may contain pathogenic micro-organisms and will support the formation of toxins or the growth of pathogenic micro-organisms and foods that may contain harmful chemicals. This includes milk and dairy based drinks, cheese, frozen processed meat, and infant formula.
Each class per brand of product must be registered with the FDA by the importer before the product can be imported. Only products with a valid Certificate of Product Registration from the FDA will be allowed for sale in the Philippines.
The following is the list of requirements for the initial registration of food products:
- Completed Integrated Application Form as prescribed by current FDA regulations;
- Proof of Payment of Fees as prescribed by current FDA regulations;
- Clear and complete loose labels or artwork, as applicable, of all packaging sizes, or equivalent as defined by FDA regulations except for bulk raw materials, ingredients and food additives intended for further processing or for distribution to establishments/manufacturers for further processing;
- Pictures of the product from all angles and in different packaging sizes, and from at least two different perspectives allowing visual recognition of a product as the same with the others being registered, as applicable.
- For food supplements, a sample in actual commercial presentation must be submitted.
- As applicable, documents to substantiate claims, such as technical, nutritional or health studies or reports, market-research studies, Certificate of Analysis, quantitative studies and computations, scientific reports or studies published in peer-reviewed scientific journals, certificates, or certification to support use of logo/seal on Halal, Organic, or Kosher foods and in compliance with current labelling regulations. FDA will only allow stickers to be used to correct deficiencies for up to six months, then US manufacturers are required to design special packaging for the Philippines market to meet Philippine labelling requirements available here: https://www.fda.gov.ph/wp-content/uploads/2021/03/Administrative-Order-No.-2014-0030.pdf.
A Certificate of Product Registration (CPR) shall be issued by the FDA and shall be valid for two years. Subsequent renewal of CPR shall be valid for a period of five years. Exporters must be aware that the Philippine importer needs to secure a license to operate (LTO) from the FDA to import these products. This is a prerequisite for the registration of all food products. The license lists names of foreign suppliers or sources of the products being registered. The cost of an initial two-year licensing fee is $80 (PhP4,000). Renewal of License to Operate, valid for five years, is $160 (PhP8,000).
Import Regulations for Plant Products
The Bureau of Plant Industry (BPI) regulates imports of all plant products, including live plants, fruits and vegetables, and some processed plant products (i.e., raisins, frozen potatoes) that may already be covered by the Philippine Food and Drug Administration. In addition to the Sanitary and Phytosanitary Import Clearance (SPSIC), shipments of fruits and vegetables must be accompanied by a USDA Phytosanitary Certificate or a Processed Plant Product Certificate issued by APHIS at the port of origin. The United States has market access for the Philippines: blueberries, broccoli, cauliflower, lettuce, carrots, cabbage, celery, and potatoes. Wheat, corn, soybeans, and other plant products that have been traditionally imported are allowed under International Standard Phytosanitary Measures.
DA Department Circular No. 04 Series of 2016 specifies the requirements and procedures for importing plants, planting materials, and plant products for commercial purposes. Commodities of plant origin that are processed to the point that they are incapable of being infested with quarantine pests are deemed as Category 1 and do not require an SPSIC or a Phytosanitary Certificate (PC). Instead of an SPSIC, an importer should obtain a Plant Quarantine Service Certificate from BPI; likewise, the Processed Plant Product certificate from APHIS (PPQ Form 578) takes the place of a PC. Categories 2, 3, and 4 all require an SPSIC and PC prior to shipment to the Philippines. For more information on the four categories and the details on licensing and registration for Philippine importers are available in the Department Circular mentioned above.
Import Regulations for Meat and Poultry Products
In 2005, the Department of issued Administrative Order No. 26 (AO 26), which updated its Administrative Order No. 39 (2000) or the “Revised Rules, Regulations and Standards Governing the Importation of Meat and Meat Products into the Philippines.”
In 2010, Administrative Order 9 (AO 9) was issued, requiring that a Sanitary and Phytosanitary Import Clearance (SPSIC) be issued to an accredited importer prior to shipment of imported food and agricultural products to the country and functions as an import permit. The SPSIC replaced the Veterinary Quarantine Clearance for meat and poultry products. An SPSIC is valid for 60 days from the date of issuance, within which the product is to be shipped from the country of origin. The SPSIC is nontransferable and can only be used by the consignee to whom it was issued. The Philippines follows a one shipment/bill-of-lading per Import Clearance policy.
At present, all U.S. meat establishments that are regulated and inspected by the USDA Food Safety and Inspection Service (FSIS) are eligible to export meat and poultry to the Philippines. A summary of Philippine export requirements for meat and poultry products from the United States may be obtained from the U.SDA website (https://www.fsis.usda.gov/inspection/import-export/import-export-library).
Sensitive Agricultural Products
Tariff rates for sensitive agricultural products were established in Executive Order 313 of March 1996, which set varying in-quota and out-quota rates for products considered important to domestic agriculture: pork, poultry, coffee, sugar, rice and corn. In-quota rates apply to products imported within established minimum access volumes (MAV). Any imports in excess of the MAV are assessed the out-of-quota rate. MAV products are those for which the Philippine Government is committed to providing minimum market access in exchange for the lifting of quantitative import restrictions in the WTO.
The MAV Administration, including its allocation, is handled by a special MAV Management Committee. Please contact the USDA Foreign Agricultural Service in Manila (AgManila@usda.gov) for further information on minimum access volumes and current MAV license holders.
Import Regulations for Biotechnology-Derived Products
On April 3, 2002, the Department of Agriculture issued Administrative Order No. 8 (AO 8), which regulates the importation and release into the environment of genetically modified plants and plant products. The Bureau of Plant Industry issues permits for the importation of regulated articles and/or combined trait products for contained use or trials, as well as for direct use as food or feed or for direct processing of genetically modified (GM) plants and plant products. Under AO 8, no regulated article shall be imported or released into the environment without the conduct of a satisfactory risk assessment.
A Joint Department Circular (JDC) was approved in March 2016 that replaced existing Philippine genetically engineered regulations embodied in the Philippine Department of Agriculture’s Administrative Order No. 8 (AO 8). AO 8 was replaced after the Philippine Supreme Court, in a December 8, 2015 decision, ruled that AO 8 did not sufficiently cover minimum requirements of the principles of risk assessment as embodied in the National Biosafety Framework. The JDC requires more public consultation and provides more consideration to socio-economic issues and environmental impacts in risk assessment procedures, compared to AO 8. The JDC was implemented on April 14, 2016.
All shipments of regulated articles must be accompanied by a letter declaring the shipment may or may not contain GMOs. This declaration is issued by the shipper, importer, certified laboratory or responsible office in the country of origin.
A detailed report that specifically addresses import regulations and standards entitled “The Philippines: Food and Agricultural Import Regulations & Standards Country Report (FAIRS),” can be obtained from the Global Agricultural Information Network (GAIN). From https://gain.fas.usda.gov/, click “Search” and select “Philippines” as the country and “Food and Agricultural Import Regulations and Standards” as the category. The latest report is published by June of each year.