Tariff Commission reviews MFN tariffs for next five years

The Tariff Commission (TC) is conducting full blast review of the most favored nation (MFN) tariffs to set the new import duty rates and schedules on wide ranging products from various countries, which account for 52 percent of the country’s total imports, over the next five years (2024-2028). MFN tariffs refer to the duty imposed by the government on imported products from countries where the Philippines has no free trade agreements (FTAs) or non-FTA countries. Already, the TC has recently completed a series of public hearings as part of the review process to lay down the five-year tariff on the MFN schedule for all products falling under Chapters 1 to 97 Section 1611 of the Customs Modernization and Tariff Act (CMTA). “The conservative target date of the Commission to submit its Final Report to the CTRM (Committee on Tariff and Related Matters) is in November 2023,” the Commission said in a reply to an email. With the completion of the public consultation, the Commission will verify the information submitted in support of parties’ positions and ocular inspection of plant facilities and production process/es, as appropriate. Upon completion of said procedure a Commission Report, containing its findings and recommendations, will be submitted to the Department of Trade and Industry and National Economic and Development Authority, as the Chair and Co-Chair, respectively, of the NEDA Board CTRM. The Commission’s Report will undergo deliberations by the CTRM, whose membership is composed of relevant government agencies. The recommendation/s of said body will then be presented to the NEDA Board, which is headed by the President. Several associations and companies have submitted their position papers to meet the April 14 deadline for submission, according  to the Commission. The review of the MFN tariffs is deemed crucial for both local companies and foreign suppliers as these involve adjustments in a total of 11,609 tariff lines from agriculture; chemical and chemical products; textile, paper, wood, and leather; metals and non-metals; and machinery and transport equipment. Of this figure, more than half or 6,330 tariff lines of total Asean Harmonized Tariff Nomenclature (AHTN) have low duties of zero to five percent. Another 4,177 tariff lines have rates of eight to 15 percent and 1,102 have high tariff lines at 20 percent to 65 percent. Overall, these tariff lines have average import tariff rate of 7.77 percent. In its presentation at the public hearings, the Commission noted that from 2020-2022, imports from non-FTA partners comprised 52 percent of total Philippine imports.  Meantime, the FTA countries (ASEAN, Japan, RCEP, EFTA) got the remaining 48 percent share of imports. “This means that the MFN tariff structure remains important for businesses and the trading community,” the Commission emphasized. As such, the review will determine the appropriate adjustments to the Philippine MFN tariff schedule to align with the policy directions and economic development priorities of the government; promote trade policy stability, certainty and transparency in the trading environment; provide business with medium to long-term policy information; and simplify the tariff nomenclature for trade facilitation. The TC will also consider some factors in recommending the tariff rates. These include local viability of product/producer welfare; value chains/degree of processing; emerging industries/government roadmaps; sources of imports; trade balance; international tariff commitments of the Philippines; government revenues; employment and investments; consumer welfare; policy flexibility for international trade negotiations; positions of parties; and Philippine Development Plan 2023-2028.