PHILIPPINES: The Joint Foreign Chambers (JFC) has reiterated their recommendation to Senate and House leaders to pass the Customs Modernization and Tariff Act (CMTA).
In a statement, JFC noted that the Senate bill is under deliberation in its ways and means committee while the House bill is pending second reading in plenary.
“This bill deserves urgent consideration by Congress in view of the need to create a Bureau of Customs that will be respected by all for its honesty and efficiency,” the business groups said.
During the 14th Congress, February 1, 2010 the Philippine Senate ratified the Revised Kyoto Convention (RKC) of the World Customs Organization, under which the Philippines committed to bring its customs procedures in line with the 78 other member countries that have ratified the RKC. A five-year period was targeted to bring Philippine domestic law in conformity with the RKC.
In the 15th Congress the House approved the CMTA, the enabling law of the RKC. Unfortunately, the Senate was unable to pass the measure. We are hopeful that the Congress will approve the CMTA this 16th Congress to continue the reform momentum since the 14th Congress.
In today’s fast-changing global economy, the Philippines must modernize its customs administration to keep up with changing international standards, to make customs valuation and inspection procedures more transparent and predictable, and to implement automated procedures. The costs of the entire logistics chain which connects Philippine agriculture and industry to foreign markets must be made as competitive as possible to support existing businesses in the Philippines as well as to attract new ones.
Many of the individual reforms in the bill when implemented will reduce logistic chain costs and enhance the country’s competitiveness. The ASEAN Economic Community (AEC) will come into effect at the end of 2015. To be able to take full advantage of new opportunities for the Philippines economy that will be created by the AEC, it is essential for the CMTA to be enacted and implemented.
One small example of a reform that CMTA would bring about is removal of the current de minimis of P.10, under Republic Act 1937 which has not been changed since 1957. At this absurdly low amount, the Philippine de minimus is the smallest in ASEAN, which averages almost $200 or some 90 times the Philippine amount. Other ASEAN jurisdictions set this amount administratively – as the CMTA would allow – rather than by law.
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