Posted on 28 Jan 2008
Tariffs on 4,515 lines have been reduced to zero from three percent making the
The tariff reduction is contained under Executive Order 617, which was signed by President Gloria Arroyo in April last year but was not published due to budgetary constraints, was finally published in a major daily last January 18.
Apart from EO 617, the National Economic and Development Authority (NEDA) board also approved four other EOs.
EO 617 refers to the tariff reduction commitment of the Philippine government under Phases I and II of the 11 Priority Integration Program (PIP) of ASEAN.
Under the CEPT schedule, 80 percent of ASEAN countries' tariff lines must be reduced to zero this year and 100 percent by 2010 when the free trade area takes its full effect. CEPT is the main vehicle of ASEAN to carry out the trade liberalization in the region.
The PIP is an accelerated sectoral program in ASEAN wherein tariff reduction on 11 sectors must be eliminated faster than the rest to jumpstart the integration of ASEAN as an economic block.
PIP, which comprises a total of 4,515 tariff lines, has brought the country's compliance to the CEPT schedule of tariff reduction at 80 percent.
Phase 1 of the PIP covers 4,273 tariff lines while Phase 11 comprises 242 lines only for a total of 4,515 tariff lines.
The 11 priority sectors and their country coordinators are wood-based & automotive —
The only contentious lines under EO 617 that somehow caused a stir at the Committee on Tariff and Related Matters (CTRM) but was nonetheless resolved was the inclusion of the used motor vehicles.
The Chamber of Automotive Manufacturers of the Philippines Inc. had strongly opposed the inclusion of the used motor vehicles and wanted them stricken out.
The CTRM technical also agreed that used motor vehicles should not have been included in the zero tariff rating as these items are prohibited under EO 156 of the Motor Vehicle Development Program (MVDP).
To resolve the issue, the Cabinet-level CTRM had decided to put an asterisk on the tariff lines covering used motor vehicles instead of striking it out in the list.
The asterisk would point to a footnote that says importation of used motor vehicles is prohibited under EO 156 otherwise known as the Motor Vehicle Development Program and as such will not be entitled to zero tariffs specified under the EO.Meantime, the other four approved EOs are: Approved AICO Arrangement of Philippine Autoparts Components Inc. with Indonesia and Malaysia; Implementation of the Philippine Commitments Under the ASEAN-China Free Trade Agreement; EOs 677 and 679 implementing the Grant of Preferential Tariff on the Approved AICO Arrangements of Honda Cars Philippines Inc. and Toyota Motor Philippines Corp. with Indonesia and; EO 678 on the reduction of tariff on chlorinated polypropylene and video projectors and parts.
EO 678 created a separate tariff line for chlorinated polypropylene at 3 percent and reduced to zero the duty on video projectors and parts thereof as well as parts of television receivers and some monitors covered under ASEAN Harmonized Tariff Nomenclature.
