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Tariff and Customs Code

PRESIDENTIAL DECREE NO. 1464

.
A DECREE TO CONSOLIDATE AND CODI FY ALL THE TARIFF AND CUSTOMS
LAWS OF THE PHILIPPINES

WHEREAS, the Tariff and Customs Code of the Philippines known as Republic Act No.
1937 has been amended by several Presidential Decrees dating back to the year 1972;

WHEREAS, there exist in the said Code a s ubstantial number of provisions rendered obsolete
by subsequent issuances of amendatory laws, decrees and executive orders thereby making it
imperative to consolidate, codify and integrat e such amendatory laws, decrees and executive
orders to harmonize their provisions for the proper guidance of the public and efficient
administration thereof;

WHEREAS, there likewise exist in the said Code certain provisions which are impractical in
application, thus, necessitating revision in orde r to infuse flexibility, keep pace with the
changing needs and demands of trade and commer ce as well as strengthen the punitive force
of the law against smuggling and ot her forms of customs fraud.

NOW, THEREFORE, I, FERDINAND E. MARCO S, President of the Republic of the
Philippines, by virtue of the powers in me ve sted by the Constitution, do hereby order and
decree as follows:
Section 1. Codification of all Tariff and Cu stoms Laws. — All tariff and customs laws
embodied in the present Tariff and Customs Code and various laws, presidential decrees and
executive orders including new amendments thereto made in this Decree, are hereby
consolidated into a single Code to be known as the Tariff and Customs Code of 1978 which
shall form an integral part of this Decree.

Sec. 2. Effectivity. — The provisions of the Tariff and Customs Code of 1978 shall take
effect immediately without prej udice, however, to effectivity dates of the various laws,
decrees and executive orders which have so far amended the provisions of the Tariff and
Customs Code of the Philippines: Provided, however, that the tariff rates indicated in the
previous executive orders are now hereby consid ered statutory rates, except those which have
been reduced to the zero level, in which case the rates previous to the reduction will be
considered the statutory rates.
DONE in the City of Manila, this 11th day June, in the year of Our Lord, nineteen hundred
and seventy-eight.
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TARIFF AND CUSTOMS CODE OF THE PHILIPPINES

(As Amended by Eexecutive Orders Nos.. 1, 2, 5, 8, 61, 94, 115, 116 & 148, Series
of 1994)

TITLE 1
IMPORT TARIFF

Section 100. Imported Articles Subject to Duty. — All articles, when imported from any
foreign country into the Philippines, shall be subject to duty upon each importation, even
though previously exported from the Philippine s, except as otherwise specifically provided
for in this Code in other laws.
Sec. 101. Prohibited Importations. — The importa tion into the Philippines of the following
articles is prohibited:
(a) Dynamite, gunpowder, ammunitions and other explosives, firearms and weapons of war,
and parts thereof, except when authorized by law.
(b) Written or printed articles in any form containing any matter advocating or inciting
treason, or rebellion, or insurr ection, sedition or subversion against the Government of the
Philippines, or forcible resistance to any law of the Philippines, or containing any threat to
take the life of, or inf lict bodily harm upon any person in the Philippines.
(c) Written or printed articles, negatives or cinematographic film, photographs, engravings,
lithographs, objects, paintings, drawings or other representation of an obscene or immoral
character.
(d) Articles, instruments, drugs and substanc es designed, intended or adapted for producing
unlawful abortion, or any printed matter which adve rtises or describes or gives directly or
indirectly information where, how, or by whom unlawful abortion is produced.
(e) Roulette wheels, gambling outfits, loaded dice, marked cards, machines, apparatus or
mechanical devices used in gambling or the dist ribution of money, cigars, cigarettes or other
articles when such distribu tion is dependent on chance, in cluding jackpot and pinball
machines or similar contrivances, or parts thereof.
(f) Lottery and sweepstakes tickets except those authorized by the Philippine Government,
advertisements thereof, and lists of drawings therein.
(g) Any article manufactured in w hole or in part of gold, silver or other precious metals or
alloys thereof, the stamps, brands or marks or which do not indicate the actual fineness of
quality of said metals or alloys.

(h) Any adulterated or misbrande d articles of food or any adulterated or misbranded drug in
violation of the provisions of the “Food and Drugs Act.”
(i) Marijuana, opium, pipes, coca leaves, hero in or any other narcotics or synthetic drugs
which are or may hereafter be declared habit forming by the President of the Philippines, or
any compound, manufactured salt, derivative, or preparation thereof, except when imported
by the Government of the Philippines or any person duly authorized by the Dangerous Drugs
Board, for medicinal purposes only.
(j) Opium pipes and parts thereof, of whatever material.
(k) All other articles and parts thereof, the importation of which prohibited by law or rules
and regulations issued by competent authority. (As amended by Presidential Decree No. 34)
Sec. 102. Abbreviations. — The following abbrevia tions used in this Code shall represent the
terms indicated:
ad val. For ad valorem.
.
e.g. For ‘exempli gratia’ meaning ‘for example’.

i.e. For ‘id est’ meaning ‘that is’
hd. For head.
kg For kilogramme.

kgs. For kilogrammes.
l For litre.
g.w. For gross weight.
l.w. For legal weight.
n.w. For net weight.
Sec. 103. General Rules for the Interpretation of the Harmonized System. — Classification
of goods in the Nomenclature shall be governed by the following principles:
1. The titles of Sections, Chapters and Sub-Chapters are provided for ease of reference only;
for legal purposes, classifications shall be dete rmined according to the terms of the headings
and any relative Section or Chapter Notes an d, provided such headings or Notes do not
otherwise require, according to the following provisions.
.
2. (a) Any reference in a heading to an article shall be taken to include a reference to that
article incomplete or unfinish ed, provided that, as presented, the incomplete or unfinished
article has the essential character of the complete or finished article.It shall also be taken to
include a reference to that article complete or fi nished (or falling to be classified as complete
or finished by virtue of this Rule), presented unassembled or disassembled.

(b) Any reference in a heading to a material or substance shall be taken to include a reference
to mixtures or combinations of that mate rial or substance with other materials or
substances.Any reference to goods of a given materi al or substance shall be taken to include a
reference to goods consisting wholly or partly of such material or substance.The classification
of goods consisting or more than one material or substance shall be according to the
principles of Rule 3.
3. When by application of Rule 2 (b) or for any other reason, goods are, prima facie,
classifiable under two or more headings, cl assification shall be effected as follows:
(a) The heading which provides the most specific description shall be preferred to headings
providing a more general description. However, wh en two or more headings each refer to part
only of the materials or substances contained in mixed or composite goods or to part only of
the items in a set put for retail sale, those headi ngs are to be regarded as equally specific in
relation to those goods, even if one of them give s a more complete or precise description of
the goods.
.
(b) Mixtures, composite goods consisting of di fferent materials or made up of different
components, and goods put up in sets for retail sale, which cannot be classified by reference
to 3(a), shall be classified as if they consiste d of the material or component which gives them
their essential character insofar as this criterion is applicable.
(c) When goods cannot be classified by reference to 3 (a) or 3 (b), they shall be classified
under the heading which occurs last in numer ical order among those which equally merit
consideration.
4. Goods which cannot be classified in accordan ce with the above Rules shall be classified
under the heading appropriate to the goods to which they are most akin.
.
5. In addition to the foregoing provisions, the following Rules shall apply in respect to the
goods referred to therein:
(a) Camera cases, musical instrument cases, gun cases, drawing instrument cases, necklace
cases and similar containers, specifically shaped or fitted to contain a specific article or set of

articles, suitable for long-term use and presented with the articles for which they are intended,
shall be classified with such articles when of a kind normally sold therewith.The Rule does
not, however, apply to containers which gi ve the whole its essential character;
.
(b) Subject to the provisions of Rule 5(a) a bove, packing materials and packing containers
presented with the goods therei n shall be classified with the goods if they are of a kind
normally used for packing such goods.However , this provision does not apply when such
packing materials or packing containers are clearly suitable for repetitive use.
6. For legal purposes, the classification of goods in the subheadings of a heading shall be
determined according to the terms of those subheadings and any related Subheading Notes
and, mutatis mutandis, to the above Rules, on th e understanding that only subheadings at the
same level are comparable.For the purposes of the Rule the relative Section and Chapter
Notes also apply, unless the context otherwise requires.
Sec. 104. All Tariff Sections, Chapters, headings and subheadings and the rates of import duty
under Section 104 of Presidential Decree No. 34 and all subsequent amendment issues under
Executives Orders and Presidential Decrees are hereby adopted and form part of this Code.
There shall be levied, collected, and paid upon all imported articl es the rates of duty indicated
in the Section under this Section except as othe rwise specifically provided for in this Code:
provided, that the maximum rate shall not exceed one hundred per cent ad valorem.
The rates of duty herein provided or subsequently fixed pursuant to Section four hundred one
of this Code shall be subject to periodic investigation by the Tariff Commission and may be
revised by the President upon recommendation of the National Economic and Development
Authority.
The rates of duty herein provided shall apply to all products whether imported directly or
indirectly of all foreign countries, which do not discriminate against Philippine export
products. An additional 100% across-the-board dut y shall be levied on the products of any
foreign country which discriminate s against Philippine export products.
The tariff Sections, Chapters, headings and subheadings and the rate of import duty under
Section one hundred four of this Code shall be as follows:
.
(This portion containing the voluminous descri ption of rates of import duties, has been
deleted for the convenience of readers who are mo re interested on the substantive provisions
of the Code)
.
Sec. 105. Conditionally-Free Importations. — The fo llowing articles shall be exempt from the
payment of import duties upon compliance with the formalities prescribed in, or with, the
regulations which shall be prom ulgated by the Commissioner of Customs with the approval of
the Secretary of Finance; Provided, That any article sold, barter ed, hired or used for purposes
other than that they were intended for without prior payment of the duty, tax or other charges
which would have been due and payable at the time of entry if the article had been entered
without the benefit of th is section, shall be subject to forfeiture and the importation shall
constitute a fraudulent practice against custom s revenue punishable under Section Thirty-six
hundred and two, as amended of this Code: Pr ovided, further, That a sale pursuant to a
judicial order or in liquidation of the estate of a deceased person shall be subject to the
preceding proviso, without prejudice to the payment of duties, taxes and other charges:
Provided, finally, That the President may upon r ecommendation of the Secretary of Finance,
suspend, disallow or completely withdraw, in w hole or in part, any of the conditionally-free
importation under this section:
a. Aquatic products (e.g., fishes, crustaceans, mo llusks, marine animals, seaweeds, fish oil,
roe), caught or gathered by fishing vessels of Philippine registry: Provided, That they are

imported in such vessels or in crafts attached thereto: And provided, further, That they have
not been landed in any foreign territory or, if so landed, they have bee
n landed solely for
transshipment without having been advanced in condition;

b. Equipment for use in the salvage of vessels or aircrafts, not available locally, upon
identification and the giving of a bond in an amount equal to one and one-half times the
ascertained duties, taxes and ot her charges thereon, conditioned for the exportation thereof or
payment of the corresponding duties, taxes and other charges with in six (6) months from the
date of acceptance of the import entry: Provided, That the Collector of Customs may extend
the time for exportation or payment of dutie s, taxes and other charges for a term not
exceeding six (6) months from the expiration of the original period;

c. Cost of repairs, excluding the value of th e article used, made in foreign countries upon
vessels or aircraft documented, registered or licensed in the Philippines, upon proof
satisfactory to the Collector of Customs (1) that adequate facilities for such repairs are not
afforded in the Philippines, or (2) that such vessels or aircrafts, while in the regular course of
her voyage or flight was compelled by stress of w eather or other casualty to put into a foreign
port to make such repairs in order to secure th e safety, seaworthiness or airworthiness of the
vessel or aircraft to enable her to reach her port of destination;
d. Articles brought into the Philippines for repa ir, processing or reconditioning to be re-
exported upon completion of the repair, proc essing or reconditioning: Provided, That the
Collector of Customs shall require the giving of a bond in an amount equal to one and one-
half times the ascertained duties, taxes a nd other charges thereon, conditioned for the
exportation thereof or payment of the correspondi ng duties, taxes and other charges within six
(6) months from the date of acceptance of the import entry;
e. Medals, badges, cups and other small articles bestowed as trophies or prizes, or those
received or accepted as honorary distinction;
f. Personal and household effects belonging to residents of the Philippines returning from
abroad including jewelry, precious stones and other articles of luxury which were formally
declared and listed before departure and identif ied under oath before the Collector of Customs
when exported from the Philippines by such returning resident s upon their departure
therefrom and during their stay abroad; personal and household effects including wearing
apparel, articles of personal adornment (except luxury items), toilet articles, portable
appliances and instruments and similar person al effects, excluding vehicles, watercrafts,
aircrafts, and animals purchased in foreign co untries by residents of the Philippines which
were necessary, appropriate and normally us ed for the comfort and convenience in their
journey and during their stay ab road upon proof satisfactory to th e Collector of Customs that
same have been in their use abroad for more than six (6) months and accompanying them on
their return, or arriving within a reasonable time which, barri ng unforeseen circumstances, in
no case shall exceed ninety (90) days before or after the owners’ return: Provided, That the
personal and household effects shall neither be in commercial quantities nor intended for
barter, sale or hire and that the total dutia ble value of which shall not exceed two thousand
pesos (P2,000.00): Provided further, That the returning residents have not previously received
the benefit under this section within one year from and after the last exemption granted:
Provided furthermore, That a fifty (50) per ce nt ad valorem duty across the board shall be
levied and collected on the personal and househol d effects (except luxury items) in excess of
two thousand pesos (P2,000.00): And provided, finally, That the personal and household
effects (except luxury items) of a returning resident who has
not stayed abroad for six (6)
months shall be subject to fifty (50)per cen t ad valorem duty across the board, the total

dutiable value of which does not exceed two thousand pesos (P2,000.00); any excess shall be
subject to the corresponding dut y provided in this Code;
g. Wearing apparel, articles of personal ador nment, toilet articles, portable tools and
instruments, theatrical costumes and similar e ffects accompanying travelers, or tourists. or
arriving within a reasonable time before and af ter their arrival in the Philippines, which are
necessary and appropriate for the wear and use of such persons according to the nature of the
journey, their comfort and convenience: Provide d, That this exemption shall not apply to
articles intended for other persons or for bart er, sale or hire: Provided, further, That the
Collector of Customs may, in his discretion, require either a written commitment or a bond in
an amount equal to one and one-half times the ascertained duties, taxes and other charges
conditioned for the exportation thereof or payment of the corresponding duties, taxes and
other charges within three (3) months from th e date of acceptance of the import entry: And
Provided finally, That the Co llector of Customs may extend the time for exportation or
payment of duties, taxes and other charges for a term not exceeding three (3) months from the
expiration of the original period;
g-1. Personal and household effects and vehicles belonging to foreign consultants and experts
hired by, and/or rendering service to, the governme nt, and their staff or personnel and families,
accompanying them or arriving within a reasonable time before or after their arrival in the
Philippines, in quantities and of the kind necessary and suitable to the profession,
rank or
position of the person importing them, for their own use and not for barter, sale or hire
provided that, the Collector of Customs may in his discretion require either a written
commitment or a bond in an amount equal to one and one-half times the ascertained duties,
taxes and other charges upon the articles classi fied under this subsection; conditioned for the
exportation thereof or payment of the correspondi ng duties, taxes and other charges within six
(6) months after the expiration of their term or contract; And Provided, finally, That the
Collector of Customs may extend the time for exportation or payment of duties, taxes and
other charges for term not exceeding six (6) months from the expiration of the original period;

h. Professional instruments and implements, tools of trade, occupation or employment,
wearing apparel, domestic animals, and pers onal and household effects belonging to persons
coming to settle in the Philippines or Filipinos and/or their families and descendants who are
now residents or citizens of othe r countries, such parties hereinafter referred to as Overseas
Filipinos, in quantities and of the class suitable to the prof ession, rank or position of the
persons importing them, for their own use and not for barter or sale, accompanying such
persons, or arriving within a reas onable time, in the discretion of the Collector of Customs,
before or after the arrival of their owners, which shall not be later than February 28, 1979
upon the production of evidence sati sfactory to the Collector of Customs that such persons are
actually coming to settle in the Philippines, th at change of residence was bona fide and that
the privilege of free entry was never granted to them before or that such person qualifies
under the provisions of Letters of Instructio ns 105, 163 and 210, and that the articles are
brought from their former place of abode, sha ll be exempt from the payment of customs
duties and taxes: Provided, That vehicles, vessel s, aircrafts, machineries and other similar
articles for use in manufacture, sh all not be classified hereunder;

i. Articles used exclusively for public entertainm ent, and for display in public expositions, or
for exhibition or competitionfor prizes, and devices for projecting pictures and parts and
appurtenances thereof, upon identification, examination, and appraisal and the giving of a
bond in an amount equal to one and one-half ti mes the ascertained duties, taxes and other

charges thereon, conditioned for exportation thereof or payment of the corresponding duties,
taxes and other charges within six (6) months from the date of acceptance of the import entry;
Provided, That the Collector of Customs may ex tend the time for exportation or payment of
duties, taxes and other charges fo r a term not exceeding six (6) months from the expiration of
the original period; and technica l and scientific films when imported by technical, cultural and
scientific institutions, and not to be exhibited for profit: Provided, further, That if any of the
said films is exhibited for profit, the proceeds therefrom shall be subject to confiscation, in
addition to the penalty provided under Section Th irty-six hundred and ten as amended, of this
Code;
j. Articles brought by foreign film producers di rectly and exclusively used for making or
recording motion picture films on location in the Philippines, upon their identification,
examination and appraisal and the giving of a bond in an amount equal to one and one-half
times the ascertained duties, taxes and othe r charges thereon, conditioned for exportation
thereof or payment of the corresponding duties, taxes and other charges within six (6) months
from the date of acceptance of the import entr y, unless extended by the Collector of Customs
for another six (6) months; photographic and cinematographic films, undeveloped, exposed
outside the Philippines by resident Filipino c itizens or by producing companies of Philippine
registry where the principal actors and artists employed for the production are Filipinos, upon
affidavit by the importer and identification that such exposed films are the same films
previously exported from the Philippines. As used in this paragraph, the terms “actors” and
“artists” include the persons operating the phot ographic cameras or other photographic and
sound recording apparatus by which the film is made;
k. Importations for the official use of forei gn embassies, legations, and other agencies of
foreign governments: Provided, That those foreign countries accord like privileges to
corresponding agencies of the Philippines;
Articles imported for the personal or family us e of the members and attaches of foreign
embassies, legations, consular officers and ot her representatives of foreign governments:
Provided, That such privilege shall be accorded under special agreements between the
Philippines and the countries which they represen t: And Provided, further, That the privilege
may be granted only upon specific instructions of the Secretary of Finance in each instance
which will be issued only upon request of the Department of Foreign Affairs;
l. Imported articles donated to, or for the accoun t of, any duly registered relief organization,
not operated for profit, for free distribut ion among the needy, upon certification by the
Department of Social Services and Developmen t or the Department of Education, Culture and
Sports, as the case may be;
m. Containers, holders and other similar receptacles of any material including kraft paper
bags for locally manufactured cement for expor t, including corrugated boxes for bananas,
mangoes, pineapples and other fres h fruits for export, except other containers made of paper,
paperboard and textile fabrics, which are of such character as to be readily identifiable and/or
reusable for shipment or transportation of goods shall be delivered to the importer thereof
upon identification, examination and appraisal and the giving of a bond in an amount equal to
one and one-half times the ascertained duties, ta xes and other charges within six (6) months
from the date of acceptance of the import entry;
n. Supplies which are necessary for the reasonable requirements of the vessel or aircraft in
hervoyage or flight outside the Philippines, including articles transferred from a bonded
warehouse in any collection district to any vessel or aircraft engaged in foreign trade, for use
or consumption of the passengers or its crew on board such vessel or aircrafts as sea or air

stores; or articles purchased abroad for sale on board a vessel or aircraft as saloon stores or air
store supplies: Provided, That any surplus or excess of such vessel or aircraft supplies arriving
from foreign ports or airports shall be dutiable;
o. Articles and salvage from vessels recovered afte r a period of two (2) years from the date of
filing the marine protest or the time when the vessel was wrecked or abandoned, or parts of a
foreign vessel or her equipment, wrecked, ab andoned in Philippine waters or elsewhere:
Provided, That articles and salvage recovered w ithin the said period oftwo (2) years shall be
dutiable;
p. Coffins or urns containing human remains, bones or ashes, used personal and household
effects (not merchandise) of the deceased pers on, except vehicles, the value of which does not
exceed ten thousand pesos (P10,000.00), upon identification as such;
q. Samples of the kind, in such quantity and of such dimension or construction as to render
them unsalable or of no appreciable commercial value; models not adapted for practical use;
and samples of medicines, properly marked “sam ple-sale punishable by law,” for the purpose
of introducing a new article in the Philippine market and imported only once in a quantity
sufficient for such purpose by a person duly regist ered and identified to be engaged in that
trade: Provided, That importations under this subs ection shall be previously authorized by the
Secretary of Finance: Provided, however, That importation of sample medicine shall be
previously authorized by the Secretary of Heal th that such samples are new medicines not
available in the Philippines: Pr ovided, finally, That samples not previously authorized and/or
properly marked in accordance w ith this section shall be levied the corresponding tariff duty.
Commercial samples, except those that are not readily and easily identifiable (e.g., precious
and semi-precious stones, cut or uncut, and jewelr y set with precious stones), the value of any
single importation of which does not exceed ten thousand pesos (P10,000.00) upo
n the giving
of a bond in an amount equal to twice the ascerta ined duties, taxes and other charges thereon,
conditioned for the exportation of said samples within six (6) months from the date of the
acceptance of the import entry or in default ther eof, the payment of the corresponding duties,
taxes and other charges. If the value of any single consignment of such commercial samples
exceeds ten thousand pesos (P10,000.00),the importer thereof may select any portion of same
not exceeding in value of ten thousand peso s (P10,000.00) for entry under the provision of
this subsection, and the exces s of the consignment may be entered in bond, or for
consumption, as the importer may elect;
r. Animals (except race horses), and plants for scientific, experimental, propagation, botanical,
breeding, zoological and national defense purposes: Provided, That no li
ve trees, shoots,
plants, moss, and bulbs, tubers and seeds fo r propagation purposes may be imported under
this section, except by order of the Government or other duly authorized institutions: Provided,
further, That the free entry of animals for breed ing purposes shall be restricted to animals of
recognized breed, duly registered in the book of record established for that breed, certified as
such by the Bureau of Animal Industry: Provided, furthermore, That certificate of such record,
and pedigree of such animal duly authenti cated by the proper custodian of such book of
record, shall be produced and submitted to the Co llector of Customs, together with affidavit
of the owner or importer, that such animal is th e animal described in said certificate of record
and pedigree: And Provided, fina lly, That the animals and plants are certified by the National
Economic and Development Authority as necessary for economic development;
s. Economic, technical, vocational, scientific , philosophical, historical, and cultural books
and/or publications: Provided, Th at those which may have already been imported but pending

release by the Bureau of Customs at the effectivity of this Decree may still enjoy the privilege
herein provided upon certification by the Depart ment of Education, Culture and Sports that
such imported books and/or publications are for economic, technical, vocational, scientific,
philosophical, historical or cultural purposes or that the same are educational, scientific
or cultural materials covered by the Internatio nal Agreement on Importation of Educational
Scientific and Cultural Materi als signed by the President of the Philippines on August 2, 1952,
or other agreements binding upon the Philippines.

Educational, scientific and cultural materi als covered by international agreements or
commitments binding upon the Philippine Governme nt so certified by the Department of
Education, Culture and Sports.

Bibles, missals, prayer books, Koran, Ahadith an d other religious books of similar nature and
extracts therefrom, hymnal and hymns for religious uses;

t. Philippine articles previously exported from the Philippines and returned without having
been advanced in value or improved in cond ition by any process of manufacture or other
means, and upon which no drawback or bounty ha s been allowed, including instruments and
implements, tools of trade, machinery and equipm ent, used abroad by Filipino citizens in the
pursuit of their business, occ upation or profession; and forei gn articles previously imported
when returned after having been exported and loaned for use temporarily abroad solely for
exhibition, testing and experimentation, for scie ntific or educational purposes; and foreign
containers previously imported which have been used in packing exported Philippine articles
and returned empty if imported by or for the account of the person or institution who exported
them from the Philippines and not for sale, barter or hire subject to identification: Provided,
That any Philippine article falling under this subsection upon which drawback or bounty has
been allowed shall, upon re-importation thereo f, be subject to a duty under this subsection
equal to the amount of su ch drawback or bounty.
u. Aircraft, equipment and machinery, spare part s commissary and catering supplies, aviation
gas, fuel and oil, whether crude or refined, a nd such other articles or supplies imported by and
for the use of scheduled airlin es operating under Congressional franchise: Provided, That such
articles or supplies are not locally available in reasonable quantity, quality and price and are
necessary or incidental for the proper operati on of the scheduled airline importing the same;
v. Machineries, equipment, tools for production, pl ants to convert mineral ores into saleable
form, spare parts, supplies, materials, accessories, explosives, chemicals, and transportation
and communication facilities imported by and fo r the use of new mines and old mines which
resume operations, when certified to as such by the Secretary of Agriculture and Natural
Resources upon the recommendation of the Direct or of Mines, for a period ending five (5)
years from the first date of actual commerci al production of saleable mineral products:
Provided, That such articles are not locally av ailable in reasonable quantity, quality and price
and are necessary or incidental in the proper operation of the mine; a nd aircrafts imported by
agro-industrial companies to be used by them in their agriculture and industrial operations or
activities, spare parts and accessories thereof;
w. Spare parts of vessels or aircraft of forei gn registry engaged in foreign trade when brought
into the Philippine exclusively as replacements or for the emergency repair thereof, upon
proof satisfactory to the Collector of Customs that such spare parts shall be utilized to secure
the safety, seaworthiness or airworthiness of the vessel or aircraft, to enable it to continue its
voyage or flight;

x. Articles of easy identification exported from the Philippines for repair and subsequently
reimported upon proof satisfactory to the Collector of Customs that such articles are not
capable of being repaired locally: Provided, That the cost of the repairs made to any such
article shall pay a rate of duty of thirty per cent ad valorem;
y. Trailer chassis when imported by shipping co mpanies for their exclusive use inhandling
containerized cargo, upon posting a bond in an amount equal to one and one-half times the
ascertained duties, taxes and othe r charges due thereon to cover a period of one year from the
date of acceptance of the entry, which period for meritorious reasons may be extended by the
Commissioner of Customs from year to ye ar, subject to the following conditions:
1. That they shall be properly identified a nd registered with the Land Transportation
Commission;

2. That they shall be subject to customs supervision fee to be fixed by the Collector of
Customs and subject to the approval of the Commissioner of Customs;
3. That they shall be deposited in the Customs zone when not in use; and
4. That upon the expiration of the period prescr ibed above, duties and taxes shall be paid,
unless otherwise re-exported.
The provisions of Sec. 105 of Presidential Decree No. 34, dated October 27, 1972, to the
contrary notwithstanding any officer or employee of the Department of Foreign Affairs,
including any attache, civil or military, or member of his staff assigned to a Philippine
diplomatic mission abroad by his Department or any similar officer or employee assigned to a
Philippine consular office abroad, or any pers onnel of the Reparations Mission in Tokyo or
AFP military personnel detailed with SEAT O or any AFP military personnel accorded
assimilated diplomatic rank on duty abroad w ho is returning from a regular assignment
abroad, for reassignment to his Home office, or who dies, resigns, or is retired from the
service, after the approval of this Decree, shal l be exempt from the payment of all duties and
taxes on his personal and household effects, including one motor car whi
ch must have been
ordered or purchased prior to the receipt by the mission or consulate of his order of recall, and
which must be registered in his name: Provi ded, however, That this exemption shall apply
only to the value of the motor car and to a ggregate assessed value of said personal and
household effects the latter not to exceed thirty per centum (30%) of the total amount received
by such officer or employee in salary and allo wances during his latest assignment abroad but
not to exceed four years; And Provided, finally, That the officer or employee concerned must
have served abroad for not less than two years.
The provisions of general and special laws, including those granting franchises, to the
contrary notwithstanding, there shall be no exemptions whatsoever from the payment of
customs duties except those provided for in this Code; those granted to government agencies,
instrumentalities or government-owned or contro lled corporations with existing contracts,
commitments, agreements, or obligations (requi ring such exemption) with foreign countries;
international institutions, associations or or ganizations entitled to exemption pursuant to
agreements or special laws; and those that may be granted by the President upon prior
recommendation of the National Economic and De velopment Authority in the interest of
national economic development.
Sec. 106. Drawbacks. — a. On Fuel Used for Propulsion of Vessels. — On all fuel imported
into the Philippines used for propulsion of vessels engaged in trade with foreign countries, or
in the coastwise trade, a refund or tax credit shall be allo wed not exceeding ninety-nine (99)
per cent of the duty imposed by law upon such fuel, which shall be paid or credited under

such rules and regulations as may be prescribed by the Co mmissioner of Customs with the
approval of the Secretary of Finance.
b. On Petroleum Oils and Oils Obtained from Bituminous Minerals, Crude Eventually Used
for Generation of Electric Power and for the Ma nufacture of City Gas. — On petroleum oils
and oils obtained from bituminous materials, cr ude oils imported by non-electric utilities, sold
directly or indirectly, in the same form or after processing, to electric utilities for the
generation of electric power and for the manufacture of city gas, a refund or tax credit shall be
allowed not exceeding fifty per cent (50%) of the duty imposed by law upon such oils, which
shall be paid or credited under such rules and regulations as may be prescribed by the
Commissioner of Customs with the appr oval of the Secretary of Finance.
c. On Articles Made from Imported Materials. — Upon exportation of articles manufactured
or produced in the Philippines, including the packing, covering, putting up, marking or
labeling thereof either in whole or in part of imported materials for which duties have been
paid, refund or tax credit shal l be allowed for the duties paid on the imported materials do
used including the packing, covering, putting up, marking or labeling thereof, subject to the
following conditions:
1. The actual use of the imported materials in the production or manufacture of the article
exported with their quantity, value, and amount of duties paid thereon, having been
established;

2. The duties refunded or credited shall not exce ed one hundred (100) per cent of duties paid
on imported materials used;
3. There is no determination by the National Economic and Development Authority of the
requirement for certification on non-availability of locally-produced or manufactured
competitive substitutes for the imported mate rials used at the time of importation;
4. The exportation shall be made within one (1) year after the importation of materials used
and claim of refund or tax cred it shall be filed within six (6) months from the date of
exportation;
5. When two or more products result from th e use of the same imported materials, an
apportionment shall be made on its equitable basis.
For every application of a drawback, there shal l be paid to and collected by the Bureau of
Customs as filing, processing and supervision fees the sum of Five Hundred Pesos (P500.00)
which amount may be increased or decreased when the need arises by the Secretary of
Finance upon the recommendation of the Commissioner of Customs.

d. Payment of Partial Drawbacks. — The Secr etary of Finance may, upon recommendation of
the Commissioner of Customs, promulgate rules and regulations allowing partial payments of
drawbacks under this section.
e. Payment of the Drawbacks. — Claims for ref und or tax credit eligible for such benefits
shall be paid or granted by the Bureau of Customs to claimants within sixty (60) days after
receipt of properly accomplished claims: Pr ovided, That a registered enterprise under
Republic Act Numbered Fifty-one hundred and eighty-six or Republic Act Numbered Sixty-
one hundred and thirty-five which has previously enjoyed tax credit based on customs duties
paid on imported raw materials and supplies, shall not be entitled to drawback under this
section, with respect to the same importa tion subsequently processed and re-exported;
Provided, further, That is as a result of the refund or tax credit by way of drawback of
customs duties, there would necessarily result a corresponding refund or credit of internal
revenue taxes on the same importation, the Coll ector of Customs shall likewise certify the

same to the Commissioner of Customs who shall cause the said refund or tax credit of internal
revenue taxes to be paid, refunded or credited in favor of the importer, with advice to the
Commissioner of Internal Revenue.

TITLE II
ADMINISTRATIVE PROVISIONS
PART I
BASES OF ASSESSMENT OF DUTY

Sec. 201. — Basis of Dutiable Value. — The dutia ble value of an imported article subject to
an ad valorem rate of duty shall be based on the cost (fair market value) of same, like or
similar articles, as bought and sold or offered fo r sale freely in the usual wholesale quantities
in the ordinary course of trad e in the principal markets of th e exporting country on the date of
exportation to the Philippines (excluding internal excise taxes to be remitted or rebated) or
where there is none on such date, then on the cost (fair market value) nearest to the date of
exportation, including the va lue of all container, covering and/ or packings of any kind and all
other expenses, costs and charges incident to placing the article in a condition ready for
shipment to the Philippines, and freight as well as insurance premium covering the
transportation of such articles to th e port of entry in the Philippines.

Where the fair market value or price of the artic le cannot be ascertained thereat or where there
exists a reasonable doub t as to the fairness of such value or price, th en the fair market value or
price in the principal market in the country of manufacture or origi n, if it is not the country of
exportation, or in a third country with the same stage of economic development as the country
of exportation shall be used.

When the dutiable value of the article cannot be ascertained in accordance with the preceding
paragraphs or where there exists a reasonable doubt as to the cost (fair market value) of the
imported article declared in the entry, the correct dutiable value of the article shall be
ascertained by the Commissioner Of Customs from the reports of the Revenue or Commercial
Attache (Foreign Trade Promotion Attache), purs uant to Republic Act Numbered Fifty-four
Hundred and Sixty-six or other Philippine diplomatic officers or Customs Attaches and from
such other information that may be available to the Bureau of Customs. Such values shall be
published by the Commissioner of Customs from time to time.

When the dutiable value cannot be ascertained as provided in the preceding paragraphs, or
where there exists a reasonable doubt as to the du tiable value of the imported article declared
in the entry, it shall be domestic wholesale sellin g price of such or similar article in Manila or
other principal markets in the Philippines or on the date the duty become payable on the
article under appraisement, on the usual wholesal e quantities and in the ordinary course of
trade, minus:
(a) not more than twenty-five (25) per cen t thereof for expenses and profits; and

(b) duties and taxes paid thereon. (as amended by E.O. 156)
Sec. 202. Bases of Dutiable Weight. — On articles that are subject to the specific rate of duty,
based on weight, the duty sha ll be ascertained as follows:

(a) When articles are dutiable by the gross weight, the dutiable weight thereof shall be the
weight of same, together with the weight of all containers, packages, holders and packing, of
any kind, in which said articles are contained, held or packed at the time of importation.

(b) When articles are dutiable by the legal weight thereof shall be the weight of same,
together with the weight of the immediate cont ainers, holders and/or packing in which such
articles are usually contained, held or packed at the time of importation and/or, when
imported in retail packages, at the time of their sale to the public in usual retail quantities:
Provided, That when articles are packed in singl e container, the weight of the latter shall be
included in the legal weight.

(c) When articles are dutiable by the net weight, the dutiable weight thereof shall be only the
actual weight of the articles at the time of importation, excluding the weight of the immediate
and all other containers, holders or packing in which such articles are contained, held or
packed.

(d) Articles affixed to cardboa rd, cards, paper, wood or similar common material shall be
dutiable together with the weight of such holders.
(e) When a single package contains imported arti cles dutiable according to different weights,
or to weight and value, the common exterior re ceptacles shall be prorated and the different
proportions thereof treated in accordance with the pr ovisions of this Code as to the dutiability
or non-dutiability of such packing.
Sec. 203. Rate of Exchange. — For the asse ssment and collection of import duty upon
imported articles and for other purposes, the value and prices thereof quoted in foreign
currency shall be converted into the currency of the Philippines at the current rate of exchange
or value specified or published, from time to time, by the Central Bank of the Philippines.

Sec. 204. Effective Date of Rates of Import Dut y. — Imported articles shall be subject to the
rate or rates of import duty existin g at the time of entry, or withdrawal from warehouse, in the
Philippines, for consumption.
On and after the day when this Code shall go in to effect, all articles previously imported, for
which no entry has been made, and all articles previously entered without payment of duty
and under bond for warehousing, transportation, or any other purpose, for which no permit of
delivery to the importer or his agent has been is sued, shall be subject to the rates of any duty
imposed by this Code and to any other dut y, upon the entry, or withdrawal thereof from
warehouse, for consumption.
On article abandoned or forfeited to, or seized by, the government, and then sold at public
auction, the rates of duty and the tariff in fo rce on the date of the auction shall apply:
Provided, That duty based on the weight, volume and quantity of articles shall be levied and
collected on the weight, volume a nd quantity at the time of their entry into the warehouse or
the date of abandonment, forfeiture and/or seizure.
Sec. 205. Entry, or Withdrawal from Warehouse, for Consumption. — Imported articles shall
be deemed “entered” in the Philippines for c onsumption when the specified entry form is
properly filed and accepted, together with any related documents required by the provisions of
this Code and/or regulations to be filed with such form at the time of entry, at the port or
station by the customs official designated to re ceive such entry papers and any duties, taxes,
fees and/or other lawful charges required to be paid at the time of making such entry have
been paid or secured to be paid with the cust oms official designated to receive such monies,
provided that the article has previously arri ved within the limits of the port of entry.

Imported articles shall be deemed “withdrawn” from warehouse in the Philippines for
consumption when the specified form is properl y filed and accepted, together with any related
documents required by any provisions of this Code and/or regulations to be filed with such
form at the time of withdrawal, by the customs official designated to receive the withdrawal
entry and any duties, taxes, fees and/or other lawful charges requi red to be paid at the time of
withdrawal have been deposited with the customs official designated to receive such payment.

PART 2
SPECIAL DUTIES

Sec. 301. Dumping Duty. —
a. Whenever the Secretary of Finance (herei nafter called the “Secretary”) has reason to
believe, from invoices or other documents or newspapers, magazines or information made
available by any government agency or interested party, that a specific ki nd or class of foreign
article, is being imported into, or sold or is likely to be sold in the Philippines, at a price less
than its fair value, the importation and sale of which might injure, or retard the establishment
of, or is likely to inju re, an industry producing like goods in th e Philippines, he shall so advise
the Tariff Commission (hereinafter called the “C ommission”), and shall instruct the Collector
of Customs to require an anti-dumping bond of twice the dutiable value of the imported
article coming from the specific country.

b. The Commission, upon receipt of the advice from the Secretary shall conduct an
investigation to:
1. Verify if the kind or class of article in question is being imported into, or sold or is likely
to be sold in the Philippines at a price less than its fair value;

The fair value of an article shall be its home co nsumption price, excluding internal excise tax.
If the fair value of an article cannot be determined, the following rules shall apply:
i. If the home consumption pr ice is unreliable because of association or a compensatory
arrangement between the exporter and the importer or a third party, or if the quality of like to
similar articles sold by the producers for home c onsumption is negligible in relation to the
quality sold for exportation to countries other than the Philippines as to be an inadequate basis
for comparison, then the fair valu e of the articles shall be based from the export price of like
articles sold to countries other than the Philippines, or

ii. If the country of e xport is a state-controlled economy, th en the fair value of like articles
shall be the home consumption price of like articles in a proxy country at the same stage of
economic development which is a proven or established competitive pr oducer of the article
under consideration.

iii. In the case where products are not imported directly from the country of origin but are
exported to the country of importation from an intermediate country, the fair value shall be
the home consumption in the country of origin or the country of export whichever is higher.
iv. If the fair value of such or like articles cannot be dete rmined in accordance with the
preceding paragraphs then, the fair value of the article under consideration shall be its cost of
production as determined of calculate d from reasonably available data.
2. Determine if, as a result thereof, an industry producing like goods in the Philippines, is
being injured or is likely to be injured or is retarded from being established by reason of the
importation or sale of that kind or class of article into the Philippines: Provided, That a
finding that an article is being imported into the Philippines at a price less than its fair market

value shall be deemed prima facie proof of injury, or retarding the establishment of an
industry producing like goods in the Philippines: And provided, further, That in determining
whether the domestic industry has suffered is being threatened with injury, the Commission
shall determine whether the wholesale prices at which the domestic products are sold are
reasonable, taking into account th e cost of raw materials, labor, overhead, a fair return on
investment and the overall effi ciency of the industry; and
3. Ascertain the difference, if any, between the pu rchase price and the fair market value of the
article. The Commission shall submit its findings to the Secretary within sixty (60) days after
the submission of the memoranda of the parties which shall not be later than fifteen (15) days
after the termination of the public hearing.
c. The Secretary shall, within sixty (60) da ys after receipt of the report of the Commission,
decide whether the article in question is being imported in violation of this section and shall
give due notice of such decision and shall direct the Commissioner of Customs to cause the
dumping duty, to be levied, collected and paid, as prescribed in this section, in addition to any
other duties, taxes and charges as prescribed in this section, addition to any other duties, taxes
and charges imposed by law on such article, and on the articles of the same specific kind or
class subsequently imported under similar circ umstances coming from the specific country.

d. The “Dumping Duty” as provided for in sub-section “c” hereof shall be eq
ual to the
difference between the actual purchase price and the fair value of the article as determined in
the dumping decision. All importations of like ar ticles within sixty (60)days immediately
preceding the filing of the protest are covered by the investigation. However, in cases of
subsequent importations of the same kind or cl ass of article from the specific country named
in the protest, the dumping duty shall be equal to the difference between the actual purchase
price and the fair value actually existing at the time of importation as determined by the Tariff
Commission from the supporting documents subm itted or from other reliable sources.

e. Pending investigation and final decision of the case, the article in question, and articles of
the same specific kind or class subsequently imported under similar circumstances, shall be
released to the owner, importer, consignee or agent upon the giving of a
bond in an amount
equal to twice the estimated dutiable value thereof.
f. Any aggrieved party may appeal only the am ount of the dumping duty to the Court of Tax
Appeals in the same manner and within the same period provided for by law in the case of
appeal from decision of the Commissioner of Customs.
g. (1) The article, if it has not been previously released under bond as provided for in
subsection “e” hereof, shall be released af ter payment by the party concerned of the
corresponding dumping duty in addition to any ordi nary duties, taxes, and charges, if any, or
re-exported by the owner, importer, consignee or agent, at his option and expense, upon the
filing of a bond in an amount eq ual to twice the estimated dutiable value of the article,
conditioned upon presentation of landing certifi cate issued by a consular officer of the
Philippines at the country of destination; or
(2) If the article has been prev iously released under bond, as provided in s ubsection “e” hereof,
the party concerned shall be required to pa y the corresponding dumping duty in addition to
any ordinary duties, taxes and charges, if any.
h. Any investigation to be conducted by the Commission under this section shall include a
public hearing or hearings where the importer, consignee or agent, of the imported article, the
local producers of a like article, other parties directly affected, and such other parties as in the

judgment of the Commission are entitled to appear, shall be given an opportunity to be heard
and to present evidence bear ing on the subject matter.
i. The established dumping duty shall be subjec t to adjustment based on the prevailing home
consumption price or the exporter’s sales price to third country or the home consumption price
of a proxy country or in the absence thereof, the cost of production. The Commission shall
conduct quarterly examination and/ or verification of the fair value to determine the necessity
of adjustment. Should the Secretary, upon receipt of the report of the Commission, find that
there is a need for an adjustment he shall di rect the commissioner of Customs to effect the
necessary adjustment in dumping duty.
The Philippines Finance Attache or, in the absenc e thereof, the Commercial Attache or, in the
absence thereof, the diplomatic officer and/or consular officer abroad shall be advised by the
Secretary of any article cove red by dumping decision. The conc erned Attache or the Officer
shall submit quarterly report on home consumption prices, or in the absence thereof, the cost
of production, of said articles to the Secretary and the Commissi on, thru the department head.
j. Whenever the Commission, on its own motion or upon the application of any interested
party, finds that any of the conditions which necessitated the imposition of the dumping duty
has ceased to exist, it shall submit the nece ssary recommendation to the Secretary for the
discontinuance or modification of such dumping duty. Any decision or order made under this
section by the Secretary shall be published in th e Official Gazette and/or in a newspaper of
general circulation.
k. Any dumping decision promulga ted by the Secretary shall be effective for a period of five
years from the time of its promulgation except upon the representation of the interested party
of the necessity to continues the implementatio n of said decision, in which case the Secretary
shall advice the Commission to conduct an inve stigation to determine whether the conditions
in paragraphs b-1 and b-2 still exist. The act ion for extension shall be brought before the
Secretary at least six (6) months be fore the expiration of the period.
The findings of the Commission shall be submitted to the Secretary at least three (3) months
before the expiration of the period.
[All industries protected by any dumping decision fo r five years or more from the time of its
promulgation may apply for extension to the Secr etary within six (6) months from effectivity
of this Decree. The decision shall be deemed terminated upon failure to file the application
within the period so provided.]

l. The Secretary and the Commi ssion shall promulgate all rules and regulations necessary to
carry out their respective f unctions under this Section.
Sec. 302. Countervailing Duty. —
a. Whenever any article is directly or indirectly granted any bounty, subsidy or subvention
upon its production, manufacture or exportation in the country of origin and/or exportation,
and the importation of which has been determ ined by the Secretary, after investigation and
report of the Commission, as lik ely to injure an established industry, or prevent or
considerably retard the establishm ent of an industry in the Philippines, there shall be levied a
countervailing duty equal to the ascertained or estimated amount of such bounty,
countervailing duty equal to th e ascertained or estimated amount of such bounty, subsidy or
subvention: Provided, That the injury criterion to a domestic industry shall be applied only in
case of imports from countries which adhere to the GATT Code on Subsidies and
Countervailing Duties; Provided further, That the exemption of any exported article from duty

or tax imposed on like articles when destined for consumption in the country of origin and/or
exportation or the refunding of such duty or tax, shall not be deemed to constitute a grant of a
bounty, subsidy or subvention within the meaning of this subsection: Provided, furthermore,
That should an article be allowed drawback by the country of origin and/or exportation, only
the ascertained or estimated excess of the amount of the drawback over the total amount of
the duties and/or internal ta xes, if any, shall constitute a bounty, subsidy or subvention:
Provided, finally, That petitions for imposition of countervailing duty shall be filed with the
Secretary of Finance. Upon finding of a prim a facie case of bounty, subsidy or subvention
enjoyed by the imported article and injury to, or likelihood of injury to a domestic industry,
the Secretary shall refer the case to the Tariff Commission for investigation for investigation
and shall instruct the Commissioner of Custom s to require the filing of countervailing bonds
for importations entered during the pendency of countervailingproceedings;

b. The Secretary shall, after re ceipt of the reports of the Commission, decide whether the
article in question is granted any bounty, s ubsidy or subvention and if so, fix the
countervailing duty equal to the ascertained or estimated bounty, subsidy or subvention.He
shall give due notice of his decision and shall direct the Commissione r of Customs to cause
the countervailing duty to be levied, collected a nd paid in addition to any ordinary duties,
taxes and charges imposed by law on such articles and on articles of the same specific kind or
class subsequently imported under similar circumstances;
c. Pending investigation and final decision of th e case, the article in question shall not be
released from customs custody to the owner except upon the filing of a bond equal to the
ascertained or estimated amount of bounty, subsi dy or subvention as provisionally determined
by the Secretary of Finance;
d. The article, if not previously released under bond as provided for in this section, shall be
released after payment by the party concer ned of the corresponding countervailing duty in
addition to any ordinary duties, taxes and char ges, if any, or re-exported upon the filing of a
bond in an amount twice the estimated dutiabl e value of the article, conditioned upon the
presentation of a landing certificate issued by a consular officer of the Philippines at the
country of destination. If th e article has been previously released under bond, the party
concerned shall be required to pay the corresponding countervailing duty in addition to
ordinary duties, taxes and other charges, if any;

e. Whenever the Commission, on its motion or u pon application of any interested party, finds
that the condition which necess itated the imposition of the countervailing duty has ceased to
exist, it shall submit the necessary recommendati ons to the Secretary for the discontinuance of
the imposition of that duty. Any order made unde r this section by the Secretary shall be
published in the Official Gazette and/or in a newspaper of general circulation;

f. Any countervailing decision promulgated by the Secretary shal l be effective for a period of
five (5) years from the time of its prom ulgation except upon the representation of the
interested party of the necessity to continue the implementation of said decision, in which
case the Secretary shall advise the Commission to conduct an investigation to determine
whether the conditions in paragraph “a” still ex ist. The action for extension shall be brought
before the Secretary at least six (6) m onths before the expiration of the period.
The findings of the Commission shall be submitted to the Secretary at least three (3) months
before the expiration of the period.
g. The Secretary and the Commissi on shall promulgate all rules and regulations necessary to
carry out their respective f unctions under this section.

Sec. 303. Marking of Imported Articles and Containers. —
a. Marking of Articles. — Except as hereinafter provided, every article of foreign origin (or
its container, as provided in subsection “b” hereof) imported into the Philippines shall be
marked in any official language of the Phili ppines and in a conspicuous place as legibly,
indelibly and permanently as the nature of th e article (or container) will permit in such
manner as to indicate to an ultimate purchaser in the Philippines the name of the country of
origin of the article. The Comm issioner of Customs shall, with the approval of the department
head, issue rules and regulations to —
1. Determine the character of words and phrases or abbreviation thereof which sha
ll be
acceptable as indicating the country of orig in and prescribe any reasonable method of
marking, whether by printing, stenciling, stam ping, branding, labelling or by any other
reasonable method, and a conspicuous place on the article or container where the marking
shall appear.

2. Require the addition of any ot her words or symbols which may be appropriate to prevent
deception or mistake as to the origin of the article or as to the origin of any other article with
which such imported article is usually comb ined subsequent to importation but before
delivery to an ultimate purchaser; and
3. Authorize the exception of any article from the requirements of marking if –
a. Such article is incapable of being marked;

b. Such article cannot be marked prior to shipment to the Philippines without injury;

c. Such article cannot be marked prior to ship ment to the Philippines, except at an expense
economically prohibitive of its importation;
d. The marking of a container of such article will reasonably indicate the origin of such article;
e. Such article is a crude substance;
f. Such article is imported for use by the importer and not intended for sale in its imported or
any other form;
g. Such article is to be processed in the Philippines by the importer or for his account
otherwise than for the purpose of concealing the origin of such article and in such manner that
any mark contemplated by this section would necessarily be obliterated, destroyed or
permanently concealed;
h. An ultimate purchaser, by reason of the char acter of such article or by reason of the
circumstances of its importation must necessarily know the country of origin of such article
even though it is not marked to indicate its origin;
i. Such article was produced more than twenty years prior to its importation into the
Philippines; or
j. Such article cannot be mark ed after importation except at an expense which is economically
prohibitive, and the failure to mark the articl e before importation was not due to any purpose
of the importer, producer, se ller or shipper to avoid compliance with this section.
b. Marking of Containers. — Whenever an ar ticle is excepted under subdivision (3) of
subsection “a” of this section from the require ments of marking, the immediate container, if
any, of such article, or such ot her container or containers of such article as may be prescribed
by the Commissioner of Customs with the approva l of the department head, shall be marked
in such manner as to indicate to an ultimate purchaser in the Philippines the name of the

country of origin of such article in any official language of the Philippines, subject to all
provisions of this section, incl uding the same exceptions as are applicable to articles under
subdivision (3) of subsection “a”.

c. Marking Duty for Failure to Mark. — If at the time of importation any article (or its
container, as provided in subsection “b” hereof ), is not marked in accordance with the
requirements of this section, th ere shall be levied, collected and paid upon such article a
marking duty of 5 per cent ad valorem, which sha ll be deemed to have accrued at the time of
importation, except when such article is expor ted or destroyed under customs supervision and
prior to the final liquidati on of the corresponding entry.

d. Delivery Withheld Until Marked. — No impor ted article held in customs custody for
inspection, examination or appraisement shall be delivered until such article and/or its
containers, whether released or not from customs custody, shall have been marked in
accordance with the requirements of this section and until the amount of duty estimated to be
payable under subsection “c” of th is section shall have been deposited. Nothing in this section
shall be construed as excepting any article or its container from the particular requirements of
marking provided for in any provision of law.

e. The failure or refusal of the owner or importer to mark the articles as herein required within
a period of thirty days after due notice shall constitute as an act of abandonment of said
articles and their disposition sh all be governed by the provisions of this Code relative to
abandonment of imported articles.
Sec. 304. Discrimination by Foreign Countries. —
a. The President, when he finds that the public interest will be serves thereby, shall by
proclamation specify and declare new or additional duties in an amount not exceeding one
hundred (100) per cent ad valorem upon articles who lly or in part the growth or product of, or
imported in a vessel of, any foreign country whenev er he shall find as a fact that such country

1. Imposes, directly or indirectly, upon the disp osition or transportation in transit through or
re-exportation from such country of any article wholly or in part the growth or product of the
Philippines, any unreasonable char ge, exaction, regulation or limitation which is not equally
enforced upon the like articles of every foreign country; or

2. Discriminates in fact against the commerce of the Philippines, directly or indirectly, by law
or administrative regulation or practice, by or in respect to any customs, tonnage, or port duty,
fee, charge, exaction, classification, regulation, condition, restriction or prohibition, in such
manner as to place the commerce of the Philippi nes at a disadvantage compared with the
commerce of any foreign country.
b. If at any time the President shall find it to be a fact that any foreign country has not only
discriminated against the commerce of the Philippine s, as aforesaid, but has, after the issuance
of a proclamation as authorized in subsection “a ” of this section, maintained or increased its
said discrimination against the commerce of the Philippines, the President is hereby
authorized, if he deems it consistent with the interests of the Philippines, to issue a further
proclamation directing that such product of said country or such article imported in its vessels
as he shall deem consistent with the public interests, shall be excluded from importation into
the Philippines.

c. Any proclamation issued by the President under th is section shall, if he deems it consistent
with the interest of the Phili ppines, extend to the whole of any foreign country or may be

confined to any subdivision or subdivisions thereof; and the President shall, whenever he
deems the public interests require, suspend, revoke, supplement or amend any such
proclamation.
d. All articles imported contrary to the provisions of this section shall be forfeited to the
Government of the Philippines and shall be liab le to be seized, prosecuted and condemned in
like manner and under the same regulations, restri ctions and provisions as may from time to
time be established for the recovery, collection, distribution and remission or forfeiture to the
government by the tariff and customs laws. Whenev er the provision of this section shall be
applicable to importations into the Philippines of articles wholly or in part the growth or
product of any foreign country, they shall be a pplicable thereto, whether such articles are
imported directly or indirectly.
e. It shall be the duty of the Commission to asce rtain and at all times to be informed whether
any of the discrimination against the commerce of the Philippines enumerated in subsections
“a” and “b” of this section are practiced by any country; and if and when such discriminatory
acts are disclosed, it shall be th e duty of the Commission to bring the matter to the attention of
the President, together with recommendations.
f. The Secretary of finance shall make such rules and regulations as are necessary for the
execution of such proclamation as the Presiden t may issue in accordance with the provisions
of this section. PART 3
FLEXIBLE TARIFF

Sec. 401. Flexible Clause. —
a. In the interest of national economy, general welfare and/or national s ecurity, and subject to
the limitations herein prescribed, the Pr esident, upon recommendation of the National
Economic and Development Authority (hereina fter referred to as NEDA), is hereby
empowered: (1) to increase, reduce or remove existing protective rates of import duty
(including any necessary change in classifica tion). The existing rates may be increased or
decreased to any level, in one or several stag es but in no case shall the increased rate of
import duty be higher than a maximum of one hundred (100) per cent ad valorem; (2) to
establish import quota or to ban imports of a ny commodity, as may be necessary; and (3) to
impose an additional duty on all imports not exceeding ten (10%) per cent ad valorem
whenever necessary; Provided, That upon period ic investigations by the Tariff Commission
and recommendation of the NEDA, the President may cause a gradual reduction of protection
levels granted in Section One Hundred and Four of this Code, including those subsequently
granted pursuant to this section.

b. Before any recommendation is submitted to the President by the NEDA pursuant to the
provisions of this section, except in the impositi on of an additional duty not exceeding ten (10)
per cent ad valorem, the Commission shall conduc t an investigation in the course of which
they shall hold public hearings wherein intere sted parties shall be afforded reasonable
opportunity to be present, produce evidence and to be heard. The Commission shall also hear
the views and recommendations of any govern ment office, agency or instrumentality
concerned. The Commission shall submit their fi ndings and recommendations to the NEDA
within thirty (30) days after the termination of the public hearings.

c. The power of the President to increase or decrease rates of import duty within the limits
fixed in subsection “a” shall include the author ity to modify the form of duty. In modifying
the form of duty, the corresponding ad valorem or specific equivalents of the duty with

respect to imports from the principal competing foreign country for the most recent
representative period shall be used as bases.
d. The Commissioner of Customs shall regularly furnish the Commission a copy of all
customs import entries as filed in the Bure au of Customs. The Commission or its duly
authorized representatives shall have access to , and the right to copy all liquidated customs
import entries and other documents appended ther eto as finally filed in the Commission on
Audit.
e. The NEDA shall promulgate ru les and regulations necessary to carry out the provisions of
this section.
f. Any Order issued by the President pursuant to th e provisions of this section shall take effect
thirty (3) days after promulgation, except in the imposition of additional duty not exceeding
ten (10) per cent ad valorem which shall take effect at the discretion of the President.
Sec. 402. Promotion of Foreign Trade. —
a. For the purpose of expanding foreign markets for Philippine products as a means of
assistance in the economic development of the country, in overcoming domestic
unemployment, in increasing the purchasing power of the Philippine peso, and in establishing
and maintaining better relations between the Philippines and other countries, the President, is
authorized from time to time:
(1) To enter into trade agreements with forei gn governments or instrumentalities thereof; and

(2) To modify import duties (including any nece ssary change in classification) and other
import restrictions, as are required or appropri ate to carry out and promote foreign trade with
other countries: Provided, however , That in modifying import duties or fixing import quota
the requirements prescribed in subsection “a” of Section 401 shall be observed: Provided,
further, That any modification of import dutie s and any fixing of import quotas made pursuant
to this agreement on ASEAN Preferential Tr ading Arrangements ratified on August 1, 1977
shall not be subject to th e limitations of aforesaid section “a” of Section 401.
b. The duties and other import restrictions as mo dified in subsection “a” above, shall apply to
articles which are the growth, produce or manufacture of the specific country, whether
imported directly or indirectly, with which the Philippines has entered into a trade agreement:
Provided, That the President may suspend the ap plication of any concession to articles which
are the growth, produce or manufacture of su ch country because of acts (including the
operations of international cartels) or policies wh ich in his opinion tend to defeat the purposes
set in this section; and the dutie s and other import restrictions as negotiated shall be in force
and effect from and after such time as specified in the Order.

c. Nothing in this section shall be construed to give any authority to cancel or reduce in any
manner any of the indebtedness of any foreign c ountry to the Philippines or any claim of the
Philippines against any foreign country.
d. Before any trade agreement is concluded with any foreign government or instrumentality
thereof, reasonable public notice of the intention to negotiate an agreement with such
government or instrumentality shall be given in order than any interested person may have an
opportunity to present his views to the Commission which shall seek information and advice
from the Department of Agriculture, Department of Natural Resources, Department of Trade
and Industry, Department of Tourism, the Central Bank of the Philippines, the Department of
Foreign Affairs, the Board of Investments a nd from such other sources as it may deem
appropriate.
e. (1) In advising the President, as a resu lt of the trade agreement entered into, the
Commission shall determine whether the domestic industry has suffered or is being threatened

with injury and whether the wholesale prices at which the do mestic products are sold are
reasonable, taking into account th e cost of raw materials, labor, overhead, a fair return on
investment, and the overall efficiency of the industry.
(2) The NEDA shall evaluate the report of th e Commission and submit recommendations to
the President.

(3) Upon receipt of the report of the findi ngs and recommendations of the NEDA, the
President may prescribe such adjustments in th e rates of import duties, withdraw, modify or
suspend, in whole or in part, or institute such other import restrictions as the NEDA
recommends to be necessary in order to full y protect domestic industry and the consumers,
subject to the condition that the wholesale prices of the domestic products concerned shall be
reduced to, or maintained at, the level recommended by the NEDA unless for good cause
shown, an increase thereof, as reco mmended by NEDA, is authorized by the
President. Should increases be made without such authority, the NEDA shall immediately
notify the President, who shall allow the importation of competi ng products in such quantities
as to protect the public from the unauthorized increase in wholesale prices.
f. This section shall not prevent the effectiv ity of any executive agreement or any future
preferential trade agreement with any foreign country.

g. The NEDA and the Commission are authorized to promulgate such reasonable procedure,
rules and regulations as they may deem necessa ry to execute their respective functions under
this section. PART 4
TARIFF COMMISSION

Sec. 501. Chief Officials of the Tariff Co mmission. — The Officials of the Tariff
Commission shall be the Chairman and two (2 ) Member Commissioners to be appointed by
the President of the Philippines.

Sec. 502. Qualifications. — No person shall be eligible for appointment as Chairman and
Tariff Commissioners unless they are natural-bo rn citizens of the Philippines, of good moral
character and proven integrity, and who by expe rience and academic training are possessed of
qualifications requisite for developing expert k nowledge of tariff problems. They shall not,
during their tenure in office, engage in the prac tice of any profession, or intervene directly or
indirectly in the management or control of any private enterprise which may, in any way, be
affected by the functions of their office nor sh all be, directly or indirectly, financially
interested in any contract with the Government , or any subdivision or instrumentality thereof.
Sec. 503. Appointment and Compensation of Of ficials and Employees. — All employees of
the Commission shall be appointed by the Chairman in accordance with the Civil Service Law
except the private secretaries to the Chairm an, Commissioners and Executive Director.
The Tariff Commission shall be reorganized in accordance with the requirements of its
reorganized functions and responsibilities. The Chairman of the Commission, subject to the
approval of the Director-Gener al of the National Economic and Development Authority, shall
determine the new positions-designations and salary scales of the officials an
d employees of
the Commission by taking into account the degree of responsibilities of each position:
Provided, That the Office of Co mpensation and Position Classifi cation shall be furnished a
copy of the new plantilla of positions incorpora ting the new designations to be automatically
included in its manual of positions: Provided, furt her, That the reorganization shall not in any
way affect whatever benefits the officials and employees of the Commission are allowed
under existing law and/or authority.

Sec. 504. Official Seal. — The Commission is authorized to adopt an official seal.
Sec. 505. Functions of the Commission. — The Commission shall investigate —
(a) the administration of, and the fiscal and industrial effects of, the tariff and customs laws of
this country now in force or which may hereafter be enacted;

(b) the relation between the rates of duty on raw materials and the finished or partly finished
products;

(c) the effects of ad valorem and specific dut ies and of compounds specific and ad valorem
duties;
(d) all questions relative to the arrangement of schedules and classification of articles in the
several sections of the tariff law;
(e) the tariff relations between the Philippines and foreign countries, commercial treaties,
preferential provisions, economic alliances, the effect of export bounties and preferential
transportation rates;
(f) the volume of importations compared with domestic production and consumption;
(g) conditions, causes and effects relating to co mpetition of foreign industries with those of
the Philippines, including dump ing and cost of production;
(h) in general, to investigate the operation of customs and tariff laws, including their relation
to the national revenues, their effect upon th e industries and labor of the country, and to
submit reports of its investigati on as hereinafter provided; and
(i) the nature and composition of, and the cl assification of, articles according to tariff
commodity classification and heading number fo r customs revenue and other related purposes
which shall be furnished to NEDA, Board of In vestments, Central Bank of the Philippines,
and Secretary of Finance.
Sec. 506. Assistance to the President and Congre ss of the Philippines. — In order that the
President and the Congress may secure information and assistance, it shall be the duty of the
Commission to —
(a) Ascertain conversion costs a nd costs of production in the principal growing, producing or
manufacturing centers of the Philippines, whenever practicable;

(b) Ascertain conversion costs and costs of pr oduction in the principal growing, producing or
manufacturing centers of foreign countries of articles imported into the Philippines whenever
such conversion costs or costs of production ar e necessary for comparison with those in the
Philippines;

(c) Select and describe representative articl es imported into the Philippines similar to, or
comparable with, those locally produced; select and describearticles of the Philippines similar
to, or comparable with, such imported article; obtain and file samples of articles so selected
whenever advisable;
(d) Ascertain import costs of such re presentative articles so selected;
(e) Ascertain the grower’s, producer’s or manufactu re’s selling prices in the principal growing,
producing, or manufacturing centers in the Philippi nes, of the articles of the Philippines, so
selected;

(f) Ascertain all other facts which will show the difference in, or which affect competition
between, articles of the Philippines and those imported in the principal markets of the
Philippines;
(g) Ascertain conversion costs and costs of production including effects of tariff modifications
or import restrictions on pric es in the principal growing, pr oducing or manufacturing centers
in the Philippines, whenever practicable; and
(h) Submit annual reports of these to the President of the Philippines, copy of which shall be
furnished to the NEDA, Central Bank of thePh ilippines, Department of Finance and the Board
of Investments.
Sec. 507. Reports of the Commission. — The Comm ission shall place at the disposal of the
President and any member of the Congress of the Philippines or its member thereof all
information at its command; shall make such in vestigation and report as may be required by
the President and the Congress of the Philippines and shall report to the President and
Congress on the first Monday of December of each year hereafter a statement of methods
adopted and a summary of all reports made during the year.

Sec. 508. Access to Documents and Assistance to the Commission. — The Commission or its
duly authorized representative shall have access to any document, paper or record, pertinent to
the subject matter under investigation, in the po ssession of any person, firm, co-partnership,
corporation or association enga ged in the production, importation or distribution of any article
under investigation, and shall have the power to summon witnesses, take testimony,
administer oaths, and to issue subpoena duces tecum requiring the production of books,
papers or documents relating to the matter under investigation. The Commission may also
request the views, recommendations and/or assistance of any government office, agency or
instrumentality, and such office, agency or in strumentality shall cooperate fully with the
Commission.
Sec. 509. Sworn Statements. — The Commission may order the taking of sworn statements at
any stage of any proceeding or investigation before it. Such sworn statements may be taken
before any person having power to administer oaths.
Sec. 510. Verified Statements. — The Commission is authorized to require any importer,
grower, producer, manufacturer or seller to file with the Commission a statement, under oath,
giving his selling prices in the Philippine s of any article imported, grown, produced,
fabricated or manufactured by him.
Sec. 511. Rules and Regulations of the Co mmission. — The Commission shall adopt and
promulgate such rules and regulations as may be necessary to carry out the provisions of this
Code.

Sec. 512. Appropriation. — In addition to it s current appropriation the amount of Six
Hundred Thousand is hereby appropriated to ca rry out the purpose of sections five hundred
one and five hundred three of this Code.

TITLE III
EXPORT TARIFF AND PREMIUM DUTY

Sec. 514. Export Products subject to Duty and Rates. — There shall be levied, assessed and
collected an export duty on the gross F.O.B. value at the time of shipment based on the

prevailing rate of exchange, of the following products in accordance with the schedule
specified in the column Export Duty.

In addition to the export duties, herein referred to as basic rate, there shall be levied, assessed
and collected a premium duty on the difference be tween the current price as established by the
Bureau of Customs and the base price of the products in accordance with the schedule
specified under the column Pr emium Duty; Provided, That shoul d the current price of any
export product be below the established base price, then only th e basic rate shall be applied:
Provided, further, That, initially, the base pri ce upon which the premium duty shall be levied
eighty per centum (80%) of the F.O.B. value of exports established by the Bureau of Customs
for February 1974. The National Economic and Development Authority shall, from time to
time, review and establish such base pri ces taking into account, among others, the cost
conditions in various industries.

EXPORT PRODUCTS EXPORT DUTY 1

Wood Products
1. Logs 20%

2. Lumber
3. Veneer
4. Plywood
Mineral Products
1. Metallic ores and concentrates
a) Copper

b) Iron
c) Chromite
2. Gold

3. Non-Metallic
a) Clinker, cement

b) Portland cement
4. Mineral fuel
a) Bunker fuel oil

b) Petroleum pitch
5. Silver
Plant and Vegetable Products

1. Abaca (stripped hemp, manufactured)
2. Banana
3. Coconut
a) Copra

b) Coconut oil
c) Copra meal/cake
d) Dessicated coconut
4. Pineapple
a) Pineapple sliced or crushed

b) Pineapple juice or juice concentrate
5. Sugar and Sugar Products
a) Centrifugal sugar

b) Molasses
6. Tobacco
a) Tobacco leaf

b) Scrap tobacco
Animal Products
1. Shrimp and Prawns
For purposes of computing the duty, the cost of packaging and crating materials shall be
deductible from the export value, provided su ch materials are domestically manufactured
using a substantial portion of local raw materials, as determined by the Board of Investments.

Sec. 515. Flexible Clause. — The President, upon recommendation of the National Economic
and Development Authority, may subject any of th e above products to higher or lower rates of
duty provided in this Title, include additional products, exclude or exempt any product from
this Title, or additionally subject any product to an export quota. In the exercise of this
authority the President shall take into acco unt: (1) the policy of encouraging domestic
processing; (2) the prevailing prices of e xport products in the world market; (3) the
advantages obtained by export products from international agreements to which the
Philippines is a signator y; (4) the preferential treatment granted to our export products by
foreign governments; and (5) the need to meet domestic consumption requirements.

Sec. 516. Assessment and Collection of the Duty . — The duty shall be assessed by the Bureau
of Customs and collected by the Bureau thru au thorized agent banks of the Central Bank not
later than 30 days from the date of shipment.

Sec. 517. Deficiency and Surcharges. — In case th e duty is not fully paid at the time specified
hereof, the deficiency shall be increased by an amount equivalent to twenty-five per centum
(25%) thereof, the total to be collected in th e same manner as the duty. Where the deficiency
is the result of false or fraudulen t statements or representations at tributable to the exporter, the
surcharge shall be fifty per centum (50%).

Sec. 518. Allotment and Disposition of the Pro ceeds. — The proceeds of this duty shall
accrue to the General Fund and shall be allotted for development projects; except that one per
centum (1%) annually shall be set aside for the Export Assistance Fund to be administered by
the Board of Investments and expended in accordance with the General Appropriations Act to

finance export promotion projects; however, thirty per cent of this 1% shall accrue to the
Bureau of Customs which shall constitute as its intelligence fund to be disbursed by the
Commissioner of Customs in the implementation of this Title, such as but not limited to the
purchase of equipment, hiring of personnel if necessary and for such other operational
expenses in the promotion of the export industry.

Sec. 519. Rules and Regulations. — The Commissione r of Customs shall promulgate the rules
and regulations necessary for the implementation of this Title, subject to the approval of the
Secretary of Finance.

Export duties on all export products except l ogs abolished under Executive Order
No. 26 dated July 1, 1986.

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