G/SCM/Q2/PHL/17  
 
22 October  2020 
(20-7313) Page: 1/3 
Committee on Subsidies and Countervailing Measures  Original: English  
 
 
SUBSIDIES  
RESPONSE TO QUESTIONS FROM THE UNITED STATES1 REGARDING THE  
NEW AND FULL NOTIFICATION OF THE PHILIPPINES2 
The following communication, dated 2 2 October 2020, is being circulated at the request of the 
delegation of the Philippines.  
 
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Question 1  
GENERAL QUESTION  
Throughout the notification Philippines states that the duration of several programs has 
either lapsed or been terminated prior to the 2017 -2018 reporting period. For these 
programs, can the Philippines please explain whether those programs existed during the 
reporting period or if replacement programs have been implemented during the reporting 
period?  
Reply : 
On the Investment Promotion Program, the availability of the duty -free importation of capital 
equipment , spare parts and accessories  follows the validity of the legal instrument providing for it. 
The Executive Orders and their  duration were as follows:  
• Execut ive Order No. 70 – from 10 May 2012 to 9 May 2017 . 
• Executive Order No . 22 - from 18 May 2017 to 18 May 2018 . 
• Executive Order No . 57 - from 07 July 2018 to 06 July 2019 . 
For other measures wh ose durations have lapsed during or prior to the 2017 -2018 reporting period, 
there were no replacement programs during the reporting period.  
ALL SECTORS  
1. Investment Promotion Program  
Question 2  
Please explain which industries and sectors benefit from this program.  
Reply : 
Executive Order No . 226 ( the Omnibus Investments Code of 1987, as amended) encourages 
investments in activities that create more jobs and contribute to industry development.  The 
industries and sectors that benefit from this program include those that will allow the government 
 
1 G/SCM/N/Q2/PHL/16 . 
2 G/SCM/N/343/ PHL/Suppl.1 . G/SCM/Q2/PHL/17  
 
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  to achieve the scaling up and dispers al of opportunities nationwide. These include the following: 
manufacturing; agriculture and support services especially for MSMEs; strategic services like 
creatives, start -ups, innov ation drivers and R&D, aircraft maintenance, charging stations for electric 
vehicles, industrial waste treatment; infrastructure development for air, land and water transport; 
mass and low -cost housing; healthcare and drug rehabilitation centers; energy de velopment;  
inclusive business models;  and environment -related activities (including response to climate 
change).  
MARKET COMPETITIVENESS PROGRAM  
1. Economic Zones and Industrial Areas  
Question 3 
Please explain which industries and sectors benefit from this program.  
Reply : 
Any entity or company that exports  can register and benefit from the Special Economic Zone Act.  
Question 4  
Please explain whether any of the tax concessions are contingent up the exportation of 
goods.  
Reply : 
PEZA-registered companies are entitled to a 5% Gross Income Tax (GIT) scheme in lieu of all 
national and local taxes, and the GIT is contingent on export sales  and guided by Footnote 1 of the 
Agreement on Subsidies and Countervailing Measures . Other tax concessions, i.e.,  tax and duty -free 
importation of raw materials, also in accordance with Footnote 1, are available to companies upon 
start of commercial operations (SCO).  
2. Market Access  
Question 5  
The notification states that this program is available to "eligible exporters" and that the 
program lapsed in 1999. We note that the reporting period of this notification is 2017 -
2018. Can the Philippines please explain whether this program has been terminated, and 
if so, has it been replaced during the reporting period? I f the program existed during the 
reporting period, please explain whether the incentives under this program are contingent 
upon exportation?  
Reply : 
The program lapsed in 1999 and ha d not been replaced since.  
AGRICULTURAL  
3. SUPPORT TO COMMERCIAL FISHERIES (SE CTION 35 OF RA 8550)  
Question 6  
The notification states the objective under this program is for fishing vessels operators to 
be able to fish further out. Please comment on whether this program will increase 
Philippines' overall fishing capacity. Does the program require fishing outside o f 
Philippines EEZ? If so, where?  G/SCM/Q2/PHL/17  
 
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  Reply : 
This section was never implemented by the Department of Agriculture since funds were not 
appropriated for the aforementioned purpose.  
Question 7  
Please explain whether modernization of vessels is included under this program.  
Reply : 
Please refer to the reply to Question 6.  
Question 8  
Can the Philippines provide the amount, or an estimate of the subsidy amount provided 
under this program during the reporting period?  
Reply : 
Please refer to the reply to Question 6.  
 
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