WT/TPR/M/368/Add.1  
29 May 2018  
(18-3249) Page: 1/152 
Trade Policy Review Body  
26 and 28 March 2018  Original: English/anglais/inglés  
Spanish/espagnol/español  
 
  
TRADE POLICY REVIEW  
PHILIPPINES  
MINUTES  OF THE MEETING  
Addendum  
Chairperson: H.E. Mr Juan Carlos G onzález (Colombia)  
This document contains the advance written questions  by WTO Members  and replies 
provided by  the Philippines .1 
 
 
Organe d'examen des politiques commerciales  
26 et 28 mars  2018 
EXAMEN DES POLITIQUE S COMMERCIALES  
PHILIPPINES  
COMPTE RENDU DE LA R ÉUNION  
Addendum  
Président :  S.E. M. Juan Carlos Gonz ález (Colombie)  
Le présent document contient les questions écrites communiquées à l'avance par les 
Membres de l'OMC et les réponses  fournies par  les Philippines .1 
 
 
Órgano de Examen de las Políticas Comerciales  
26 y 28 de marzo  de 201 8 
EXAMEN DE  LAS POLÍTICAS COMERC IALES  
FILIPINAS  
ACTA DE LA REUNIÓN  
Addendum  
President e:  Excmo.  Sr. Juan Carlos González (Colombia)  
En el presente documento figuran las preguntas presentadas anticipadamente por escrito   
de los Miembros de la OMC,  así como las respues tas facilitadas por  las Filipinas .1 
  
                                                
1 In English and Spanish only./En anglais et espagnol seulement./En inglés y español solamente.  WT/TPR/M/3 68/Add.1  
 
- 2 - 
 
  CANADA  ................................ ................................ ................................ ............................  3 
JAPAN  ................................ ................................ ................................ ...............................  6 
ARGENTINA  ................................ ................................ ................................ ....................... 12 
AUSTRALIA  ................................ ................................ ................................ ....................... 15 
BRAZIL  ................................ ................................ ................................ ............................. 20 
CHINA  ................................ ................................ ................................ .............................. 24 
DOMINICAN REPUBLIC  ................................ ................................ ................................ .......34 
EL SALVADOR  ................................ ................................ ................................ .................... 38 
EUROPEAN UNION  ................................ ................................ ................................ ............. 39 
NORWAY  ................................ ................................ ................................ ........................... 59 
SINGAPORE  ................................ ................................ ................................ ....................... 63 
THAILAND  ................................ ................................ ................................ ......................... 63 
UKRAINE ................................ ................................ ................................ ........................... 73 
UNITED STATES  ................................ ................................ ................................ ................. 86 
CHILE  ................................ ................................ ................................ .............................  105 
NEW ZEALAND ................................ ................................ ................................ .................  115 
INDONESIA  ................................ ................................ ................................ .....................  119 
MALAYSIA  ................................ ................................ ................................ .......................  122 
SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU  ........................  131 
REPUBLIC OF KOREA  ................................ ................................ ................................ ........  135 
TURKEY  ................................ ................................ ................................ ..........................  136 
BRAZIL, FOLLOW -UP QUESTIONS  ................................ ................................ ......................  140 
CHINA, FOLLOW -UP QUESTIONS  ................................ ................................ .......................  140 
EUROPEAN UNION, FOLLOW -UP QUESTIONS  ................................ ................................ ....... 147 
MALAYSIA, FOLLOW -UP QUESTIONS  ................................ ................................ ..................  151 WT/TPR/M/3 68/Add.1  
 
- 3 - 
 
  CANADA  
 
PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT  
 
3 TRADE POLICIES BY MEASURE: STANDARDS AND OTHER TECHNICAL REQUIREMENTS  
Page 46 (para 3.62)   
 
The Secretariat report notes that for the minority of Philippine National Standards (PNSs) not 
aligned with international standards, it is due mainly to long standing business practices, climatic 
conditions, the absence of specific international standards,  and the need for higher requirements 
than international standards.   
 
In those cases where PNSs are not aligned with international standards due to the need for higher 
requirements than those of international standards, could the Philippines provide examples of 
products that would fall into this category?  Please explain what is meant by “higher 
requirements”?  
 
Response : 
 
Examples of products where PNSs are not aligned to International Standards are steel 
bars, galvanized iron sheets and other constru ction materials, among others.  
‘Higher requirements’ refers to requirements specific to domestic conditions, consistent 
with Paragraph F, Annex 3 of the TBT Agreement.  
 
Page 46 (para 3.65)   
 
The Secretariat report notes that the Philippines Accreditation Bureau (PAB), which is responsible 
for the accreditation of inspection, testing and calibration laboratories and assesses the 
conformance of laboratories' quality management systems with international guidelines, has 
accredited 243 conformity assessment bo dies. 
 
Of the 243 conformity assessment bodies accredited by the PAB, how many are located outside 
the Philippines?  
 
Response : 
 
Three (3) foreign Conformity Assessment Bodies (CABs) are accredited by PAB as 
follows:  
 
 Certification Body: Brixton Assessment Services, Abu Dhabi, UAE for Quality 
Management System, Environmental Management System and Food Safety 
Management System;  
 Testing Laboratory:  Intertek Testing Services Guam for Chemical Testing; and  
 Testing Laboratory:  SGS Guam Inc. Laboratory for Chemi cal Testing.  
 
4 TRADE POLICIES BY SECTOR: AGRICULTURE  
 
Page 64 (Para 4.15 and 4.17)  
 
The Secretariat report notes that the General Council granted the Philippines an extension of 
special treatment for rice until June 30, 2017 and that as of October 2017, t he Philippines rice 
regime is governed by the status quo.  
 
Could the Philippines provide an update on its domestic process to tariffy rice?  
 
Response : 
 
At the Lower House of Congress, the bill is under deliberation by the Committee on 
Appropriations before being submitted to the Plenary for approval. At the Upper House 
of Congress, a version of the bill is being deliberated by the Senate Committee on WT/TPR/M/3 68/Add.1  
 
- 4 - 
 
  Agriculture and Food. Both Houses will transmit the bill to the Bicameral Conference 
Committee for a final bill to be approved.  
The approved version of the bill will then be transmitted to the Office of the President 
for approval. Note that both the Legislativ e and Executive branches of Government have 
given priority to this proposed legislation.  
 
Page 65 (Para 4.24)  
 
The state report mentions that “the NFA's operations include the buying/procurement of paddy on 
a nationwide scale at a fixed government support price. According to the authorities, the NFA only 
procures in the domestic market when the prevailing farm gate price of paddy significantly drops 
to a level that would deprive the farmers of earning a modest income for their produce.”  
 
Could Philippines i ndicate how often the NFA evaluates the farm gate price of paddy to establish 
new rice and corn procurement?  
 
Are these evaluations made as needed or are they done on a regular basis?  
 
Response : 
 
The NFA monitors the farm gate price of paddy frequently to assess the behavior of 
prices and to be able to reliably source the areas where the Agency can procure paddy.   
Determination of any change in the government’s buying price is done on need basis 
depending on several factors such as cost of paddy production; inflation rate, prevailing 
situation and outlook on the domestic/global rice market; income of rice/corn farmers 
relative to farmers of other crops and the government's capability to implement t he 
program.  
 
The Philippines will provide clarification on the Secretariat Report on the statement, to 
wit: 
 
”NFA only procures in the domestic market when the prevailing farm gate price 
of paddy significantly drop to a level that would deprive the farmers  of earning a 
modest income for their produce.”  
 
Part of NFA’s mandated price stabilization function is the provision to farmers of a ready 
market for their produce by procuring their paddy harvest especially when prevailing 
farmgate prices of paddy signif icantly drop to allow fair returns on farmers’ investment.  
The paddy procurement intervention/activity of NFA is being conducted year -round to 
build -up rice buffer stocks for food security purposes  
 
4 TRADE POLICIES BY SECTOR: TRANSPORT  
 
Page 78 (Para 4.111)  
 
The Secretariat Report notes that foreign equity in a domestically licensed airline may not exceed 
40%.  
 
Does the same foreign equity limitation (i.e., 40%) also apply to foreign equity in airlines licensed 
to fly internationally?  
 
If not, what fo reign equity limitation applies to airlines licensed to fly internationally?  
 
Response : 
 
An airline is considered a public utility pursuant to Section 9 of Act No. 2694.   Act No. 
2694 defines “public utility” to hereby include every individual, co -partner ship, 
association, corporation or joint stock company, whether domestic or foreign, appointed 
by any court or department of the Government that owns or controls any common 
carrier engaged in the transportation of passengers and cargo for public use.  
 WT/TPR/M/3 68/Add.1  
 
- 5 - 
 
  Since  the 1987 Constitution mandates that the operation of a public utility be granted to 
citizens of the Philippines or to corporations organized under the laws of the Philippines 
whose capital is owned by at least sixty percent (60%) of such citizens, the for eign 
equity limitation of airlines still applies, regardless if airlines are licensed to fly 
internationally.  
This rule applies even if the carrier is given a license to operate international flights. 
However, this is limited to domestic airline companies.  Foreign airline companies are not 
covered.  
 
Page 80 (Para 4.121)  
 
The Secretariat Report notes that foreign vessels, under a special permit granted by MARINA, may 
provide cabotage services when no domestic vessel is available or suitable to provide the se rvice 
required, and the public interest warrants it.  The Report also notes that as of September 2017, 
MARINE granted 242 special permits to foreign vessels.  
 
Could the Philippines please provide additional information on how the term “when the public 
interest warrants it” is, or has been interpreted in the past?  
 
Could the Philippines please provide a breakdown, by activity, of the number of special permits 
granted to foreign vessels?  
 
Response : 
 
The term “when the public interest warrants it” may be inter preted to mean that the 
issuance by the MARINA of a Special Permit to foreign -registered highly specialized ship 
will not prejudice efficient trade and commerce in the delivery of critical 
services/commodities, infrastructure and development projects, in c ase the required 
shipping services are not readily available and suitable from the domestic fleet.  
 
Another example refers to the significance of projects for the development of the 
Liquefied Natural Gas (LNG) Industry and Petroleum Operations which requir e highly 
specialized ships not normally available from the domestic fleet.  
 
In addition, it covers companies/entities that intend to secure Special Permit to operate 
foreign -registered highly specialized ships within Philippine territorial waters includes,  
but not limited to, the operation of certain ships used in Petroleum Exploration and 
Operation.  
 
Please refer to the following link for more detailed information: 
http://www.marina.gov.ph/policies/MCs/MC%202017 -02.pdf  
 
Page 80 (Para 4.123)  
 
The Secretariat Report notes that international relays are now possible in the Philippines.  
 
Could the Philippines please provide additional data on the effect that this liberali zation has had?  
For example, have efficiency gains been realized by allowing domestic point -to-point movement of 
goods bound for international destinations?  
 
Response : 
 
On the effect of international relays, the Philippines does not have studies available .  
However, many stakeholders have welcomed the law for its expected effects in reducing 
shipping costs and efficiencies.   It can also be noted that in the 2017 World Bank Ease 
of Doing Business indicator for the Philippines on “Trading Across Borders”, t he “cost to 
export” went down from USD 585 (2014) to USD 456 (2017) and the “cost to import” 
went down from USD 660 (2014) to USD 580 (2017).  
 
  WT/TPR/M/3 68/Add.1  
 
- 6 - 
 
  JAPAN  
2 Domestic Policies and Initiatives to Sustain Long -term Growth and Improve the Business 
Environment for Inclusive Growth  
 
2.4 Services  
 
2.4.4 Logistics  
 
(Question 1 Paragraphs 2.31, Page 10)  
 
According to the report by the Government, the Philippines seeks to improve distribution and 
transport services. Does the Philippines have any policy plan to promote these sectors, such as 
mitigating the restriction on foreign investment to promote these sectors?  
 
Response : 
 
The Philippines continues to review its domestic laws, rules and regulations in order to 
make distribution and transport services more responsive to the needs of the country.  
 
Aside from the amendment of the Cabotage Law, which lifted the cabotage restrictions 
imposed on foreign operators, the Philippines is also currently reviewing Commonwealth 
Act No. 146 otherwise known as the Public Service Act (PSA). The said review is for the 
purpose of clarifying the definition of public utilities in order to open up certain 
industries to more competition and attract investments on the same.  
 
On 15 February 2018, the Senate Committee on Public Services jointly  with Finance and 
Economic Affairs conducted a public hearing to consider five (5) Senate Bills and the 
approved House version relevant to the amendment of Commonwealth Act No. 146 or 
the Public Service Act. The Senate version is still pending before the C ommittee on 
Public Services. The draft bills provide a clear definition of public utility to cover three 
sectors: distribution of electricity; transmission of electricity and water pipeline 
distribution system or sewerage pipeline.  
 
The National Transport Policy (NTP) which was adopted by the NEDA Board on 12 
September 2017 is a priority strategy reflected in the Philippine Development Plan. It 
will serve as the guiding policy for transportation development, management, 
operations, and use, covering all ele ments of the transport system and its sub -sectors.  
It is intended to facilitate the realization of the Transport Vision of a safe, secure, 
reliable, efficient, integrated, intermodal, affordable, cost -effective, environmentally 
sustainable, and people -oriented national transport system that ensures improved 
quality of life of the people.  The Philippine Transport Systems Master Plan (PTSMP) is 
currently being prepared and targeted for completion by the end of the year.  
 
3 Industry and Trade Policy Developm ents 
 
3.2 Participation in the Doha Development Agenda (DDA) Negotiations  
 
3.22 Services  
 
(Question 2 Paragraphs 3.14, Page 13)  
 
Does the Constitution of the Philippines limit its government from liberalizing services or supply of 
services? If so, does the  Philippines have any plan to amend the Constitution in terms of 
liberalization of trade in services and investment?  
 
Response : 
 
The Constitution is the supreme law of the Philippines. As such, laws, rules and 
regulations should be consistent with the 1987  Constitution including commitments in 
international agreements such as the GATS.  It may be noted however, that several WT/TPR/M/3 68/Add.1  
 
- 7 - 
 
  steps have already been undertaken by the Philippines to review the 1987 Constitution 
with a view to revise or amend it.  
 
The amendmen t of the restrictive economic provisions of the Constitution is stipulated in 
the Philippine Development Plan, but the timing is not yet ascertained. In the meantime, 
bills have been filed in both Houses of Congress that would amend certain laws such as 
the bill amendin g the Public Service Act, i.e.  defining “public utility”, and the bill seeking 
to promote open access in data transmission.  
In December 2017, Executive Order 10 was signed creating a consultative committee 
that will conduct consultations and review the provisions of the Constitution relevant to 
the structure and power of the government, local governance and economic policies.  
 
In January 2018, the Philippine Congress adopted a resolution constituting the Congress 
of the Philippines as a Constituent Assembly that will review the 1987 Constitution for 
the purpose of proposing amendments to or revision of the same. Subsequently, the 
Senate Committee on Constitutional Amendments and Revision of Codes have conducted 
hearings on Charter Change Proposal.  
 
3 TRADE POLICIES AND PRACTICES BY MEASURE  
 
3.1 Measures Directly Affecting Imports  
 
3.1.5 Import prohibitions, restrictions, and licensing  
 
(Questions 3, Page 38 -41) 
 
1. The Government of the Philippines fined Sanofi for selling Dengvaxia (dengu e shot), as it might 
cause serious side -effects. We would like to know what penalties could be imposed on a company 
that manufactures and/or exports pharmaceutical products with unforeseen side -effects.  
 
2. Could you explain the legal framework and proced ure to appeal against a decision which 
imposes penalties on pharmaceutical companies for supplying pharmaceutical products with 
unforeseen side -effects?  
 
Response : 
 
The Philippines, through the Food and Drug Administration (FDA), did not fine Sanofi 
Pasteur, Inc for selling Dengvaxia “as it might cause serious side -effects”.  Sanofi was 
fined for violating Section V of the FDA Circular 2013 -004, in relation to Section  VII of 
the same circular, and Section 4 (B)(2)(3), Article I Book II of the Implementing Rules 
and Regulation of Republic Act No. 9711, otherwise known as the FDA Act of 2009.  
 
Records and evidence showed that Sanofi failed to comply with its post -market ing 
authorization issuance commitments, such as submission of Pharmacovigilance Plan 
prior to the distribution of Dengvaxia and regular submission of safety data and updates 
as contained in the Pharmacovigilance Plan. For the said violation, the Certificat es of 
Product Registration (CPR) of Dengue and Dengue multi -dose were suspended for a 
period of one year and an administrative fine of PhP 100,000.00 was imposed, with a 
stern warning that future violations of FDA laws, rules and regulations shall warrant 
stiffer sanctions, including but not limited to cancellation of the CPRs and/or License to 
Operate, and the closure of the establishment.  
  
Under the Republic Act No. 9711, otherwise known as the FDA Act of 2009, erring 
establishments may be penalized und er Section 5, “Imposition of Administrative 
Penalties”.  Other details on the administrative penalties and appeal can be accessed 
from this link:  
 http://www.officialgazett e.gov.ph/2009/08/18/republic -act-no-9711/ . 
 
3.3 Measures Affecting Production and Trade  
 
3.3.8 Intellectual Property  
 WT/TPR/M/3 68/Add.1  
 
- 8 - 
 
  (Question 4 Paragraphs 3.131, Page 57)  
 
We would like to know if, in the Philippines, any third -party can register an unregistered trademark 
which is identical or similar to a trademark that is well -known in a foreign country.  
 
If such trademark is filed or registered by any third -party in the Philippines, is it possible for the 
trademark owner of well -known mark in a foreign country entitled to invalidate or cancel such 
application or registration? If possible, we would like to know specific articles in the trademark act 
to be applied in such case.  
 
Response : 
 
A third -party may file an application for registration of a trademark that has been 
declared as a well -known mark in a foreign country; however, such application shall be 
subject to opposition proceedings where an opposer may present evidence that the 
third -party applicant is not the true owner of the trademark and is therefore n ot entitled 
to its registration in the Philippines.  
Under Section 123.1 of the IP Code, a mark which is identical with, or confusingly 
similar to, or constitutes a translation of a mark which is considered by the competent 
authority of the Philippines to be well -known internationally and in the Philippines, 
whether or not it is registered in the Philippines, and which is used for identical goods or 
services, cannot be registered by a third party.  In determining whether a mark is well -
known, account shall be taken of the knowledge of the relevant sector of the public, 
rather than of the public at large, including knowledge in the Philippines which has been 
obtained as a result of the promotion of the mark. The Rules and Regulations further 
provides that the  “competent authority” for purposes of determining whether a mark is 
well-known shall be the Court, the Director General of the IPOPHL, the Director of the 
Bureau of Legal Affairs of the IPOPHL, or any administrative agency or office vested 
with quasi -judicial or judicial jurisdiction to hear and adjudicate any action to enforce 
the rights to a mark.  Therefore, if in the appropriate proceedings the subject trademark 
is likewise declared as a well -known mark not only internationally or in a foreign 
country but also in the Philippines, such well -known mark cannot be registered by a 
third party for identical goods or services.  
 
During the proceedings on determining whether the trademark application filed by the 
third party should be granted, evidence may also be submitted as to whether the 
application was filed in bad faith. The Supreme Court of the Philippines has held that the 
registrant of a mark was in bad faith in having it registered in its name since another 
entity is the true and lawful owner thereof.  In another case, the Court decided, among 
other points, that the registrant of the mark had acted in bad faith because it was aware 
of the prior existence of the earlier mark and proceeded to obtain registration in its 
name despite of such knowledge.  
 
In the event that the trademark is registered in the name of the third -party, the 
trademark owner of the well -known mark in a foreign country may also subsequently 
cause the cancellation of such registration through an administrative proceeding. Under 
Section  151.1 (b) of the IP Code, a petition to cancel a registration of a mark may be 
filed at any time with the Bureau of Legal Affairs of IPOPHL by any person who believes 
that he is or will be damaged by the registration of a mark, if the registration was 
obtained fraudulently or contrary to the provisions of the IP Code.  
 
(Question 5 Paragraphs 3.133, Page 57)  
 
We would like to know whether the Philippines is planning to become a member of the Hague 
Agreement Concerning the International Registration of Indus trial Designs. If the Philippines has 
plan to become a member, we would like to know the schedule of accession.  
 
Response : 
 
The Philippines confirms its plan to accede to the Hague Agreement Concerning the 
International Registration of Industrial Designs.  It is currently in the process of WT/TPR/M/3 68/Add.1  
 
- 9 - 
 
  finalizing a national work plan for accession. Initial consultations with the relevant 
stakeholders have also been conducted as part of pre -accession preparations.  
 
(Question 6 Paragraphs 3.133, Page 57)  
 
We would like to  know whether partial design can be registered and protected as industrial design 
in the Philippines.  
 
Response : 
 
The Philippines can confirm that a partial design can be registered and protected as an 
industrial design in the Philippines.  Partial designs are covered by the definition of an 
Industrial Design under the IP Code, as amended, to wit: “An Industrial Desig n is any 
composition of lines or colors or any three -dimensional form, whether or not associated 
with lines or colors: Provided, That such composition or form gives a special appearance 
to and can serve as pattern for an industrial product or handicraft”.  An application for 
registration of an industrial design must contain a representation of the design, which 
may be in the form of drawings, which fully discloses those features for which 
protection is claimed.   
 
Partial designs sought to be protected must  include in the drawings the unclaimed 
"environment/outward form". The representation of the design should adopt solid lines 
to depict the portion of the design sought to be protected, while dashed, dotted, or 
broken lines should show the unclaimed environ mental structure in the drawing 
disclosure.  
 
(Question 7 Paragraphs 3.133, Page 57)  
 
We would like to know whether exploitation of a design which is similar to a registered industrial 
design is deemed as the exploitation of such registered industrial desig n in the Philippines.  
Response : 
 
The Philippines confirms that exploitation of a design which is similar to a registered 
industrial design is deemed as exploitation of such registered design in the Philippines.  
Pursuant to Section 71(a) of the IP Code, as  amended, a registered industrial design 
confers to its owner the right to exclude others from making, using, offering for sale, 
selling or importing a similar registered industrial design.  
 
(Question 8 Paragraphs 3.134, Page 57)  
 
We would like to know whe ther the Philippines is planning to become a member of UPOV1991. If 
the Philippines has plan to become a member, we would like to know the schedule of accession.  
 
Response : 
 
At present, the Philippines is not inclined to become a member of UPOV 1991. 
Never theless, plant varieties that are new, distinct, uniform, and stable are protected 
under a sui generis system pursuant to Republic Act No. 9168 or the Plant Variety 
Protection Act of the Philippines.  
 
4 TRADE POLICIES BY SECTOR  
 
4.1 Agriculture  
 
4.1.5 Ric e 
 
(Questions 9 Paragraphs 4.16, Page 62 -63) 
 
1. Regarding WT/L/932, Japan understands that the Philippines’ MFN in -quota tariff rate of the 
minimum access volume (MAV) of rice is 35% in 2017. We would like to know whether this rate 
remains unchanged in an d after 2018.  
 WT/TPR/M/3 68/Add.1  
 
- 10 - 
 
  Response : 
 
Executive Order No. 23 dated 22 May 2017 extends the concessions granted by the 
Philippines to interested trading partners for another three years (2018 -2020) or until 
the enactment of a law removing the QR provisions of Republic Act (RA) 8178, 
whichever comes first.  In the meantime, the MFN tariff rates remain at 35% for the in -
quota rate and 50% for the out -quota rate.  
 
2. We would like to know whether it is possible for private business operations to import rice 
through the MAV 's allocations for "other" countries (50,000t) instead of country specific allocations 
(755,200t). If it is possible, we would appreciate it if you could indicate the eligibilities and 
procedures to apply for the MAV, and whether there are limits on the vo lume of import per 
application or per year.  
 
Response : 
 
Local eligible importers wishing to import rice from other countries which are not part of 
the Country Specific Quota could do so under the Omnibus Origin (total allocation of 
50,000 MT) of the MAV Ri ce Importation for the Private Sector.   
 
Any person and/or entity who is engaged in or is intending to engage in the importation 
of rice can apply for an Import License with NFA.  The following documents required are 
as follows:  
 
For New Applicants/Indivi dual (Sole Proprietorship):  
 
 Passport picture of the applicant.  
For Corporation/Partnership/Association/Cooperative:  
 
 Secretary’s Certificate of a Board Resolution authorizing the representative to 
sign for and in behalf of the corporate/entity  
 Passport -size picture of the representative  
 Article of Incorporation and By -Laws and All Amendments thereto  
 Certificate of Registration with the Securities and Exchange Commission, in case 
of corporation, partnership or associations and Certificate of Regi stration with 
the Cooperative Development Authority in case of cooperative  
For both categories, an interested importer who would like to apply for the MAV Rice 
Importation Program for the Private Sector needs to submit a Letter of Intent together 
with the required documentary requirements consisting of the three (3) parts: (1) 
Technical Documents; (2) Legal Documents; and (3) Financial Documents.  
 
Prospective applicant -importer may check the electronic copy of the General Guidelines 
in the Importation of 805,200 MT White Rice Under MAV Country Specific Quota and 
MAV-Omnibus Origins (MAV -OMB) for CY 2017 by the Private Sector that is published at 
the NFA website through www.nfa.gov.ph  for the detailed information on the process and 
procedures.  
 
For CY 2017, eligible importers were allocated a maximum volume of 20,000 MT 
depending on their financial and technical capacity . 
 
3. Could you illustrate policy direction on tariffication of the Philippines, as well as the current 
status and future prospect of amendments of the Agricultural Tariffication Act?  
 
Response : 
 
The Office of the President issued on 22 May 2017 th e Executive Order No. 23 extending 
the concessions granted by the Philippines to interested trading partners.  The extension WT/TPR/M/3 68/Add.1  
 
- 11 - 
 
  shall be in effect for three (3) years or until the enactment of a law removing the QR 
provisions of RA 8178, whichever comes first .  
 
At the Lower House of Congress, the bill is under deliberation by the Committee on 
Appropriations before being submitted to the Plenary for approval. At the Upper House 
of Congress, a version of the bill is being deliberated by the Senate Committee on 
Agriculture and Food. Both Houses will transmit the bill to the Bicameral Conference 
Committee for a final bill to be approved.  
 
The approved version of the bill will then be transmitted to the Office of the President 
for approval. Note that both the Legislative and Executive branches of Government have 
given priority to this proposed legislation.  
 
Aside from the proposed legislative measure, the Philippines is planning to come up with 
a program and roadmap that would form part of the public policy on rice tariffication, 
specifically to enhance the productivity and efficiency of the rice sector and to put in 
place the necessary support for the affected farmers in the post -QR regime.  
 
4.5.1 Financial Services  
 
4.5.1.1 Banking  
 
(Question 10 Table 4.4, Pag e 73)  
 
According to the report by the Secretariat, 100% foreign ownership of banks in the Philippines is 
allowed. The data shown on Table 4.4, however, shows that even though the number of foreign 
banks (22) outnumbers that of domestic banks (17), total a sset of foreign banker accounts for just 
1,078.7 billion PHP, whereas that of domestic banks sum up to as much as 9,785.2 billion PHP. 
Could you provide information on any existing measures which may have attributed to the low 
figure of total asset of fore ign banks?  
 
Response : 
 
The relatively modest size of the total assets of all the foreign banks established in the 
Philippines may primarily be attributable to the fact that nine (9) out of 22 of these 
foreign banks as of end -June 2017 are new entrants to t he Philippine market.  Domestic 
banks have been in the business longer and have extensive branch and customer 
networks.  
  WT/TPR/M/3 68/Add.1  
 
- 12 - 
 
  ARGENTINA  
1. Paragraph 2.31 mentions that the Philippines continues to encourage investment in specific 
sectors, such as the manufacturing industry and agriculture. However, section 2.4 details that 
foreign investment in agriculture is regulated for foreign investors.  
 
Could you explain what this regulation consists of?  
 
Response : 
 
The regulation being referred to are the Constitutional restriction on land ownership by 
foreigners and the FDI restrictions with respect to the cultivation, processing and trade 
of rice and corn.  
  
On the land ownership restriction, only Filipino citizens or corporations with at least 
60% of the  capital stock owned by Filipino citizens may own land in the Philippines. 
Nevertheless, foreign investors may lease land for a period of 50 years, renewable for 
another 25 years.  
 
On rice and corn, foreign -owned enterprises may engage in such activities subject to the 
requirement of divestment within 30 years or for a longer period as the Board may 
require from date of registration.  
 
2. Paragraph 2.31 mentions that the Philippines encourages investment in specific sectors through 
the Inclusive Business Mo del, which encourages medium and large companies in agribusiness and 
tourism to turn to micro and small enterprises to help them supply raw materials and /or services.  
Could you indicate how this mechanism of promotion for SMEs is made effective?  
 
Response : 
 
Under the Inclusive Business (IB) Model, medium and large enterprises (MLEs) are 
encouraged to engage micro and small enterprises (MSEs) to be part of their supply 
chains as suppliers of either raw materials and/or services.  
 
To promote IB, the BOI impl ements a nationwide information campaign and facilitates 
the matching between MLEs’ requirements and the MSEs’ capabilities. The BOI has 
likewise intensified awareness on IB in the APEC and ASEAN fora through High Level 
Dialogues and holding an ASEAN IB Aw ards Night to encourage more multinational 
companies (MNCs) to adopt IB Models.  
 
3. Paragraph 3.24 mentions the power of the President to allow products to be imported duty -free 
if this is in the "interest of national economic development".  
 
What are the c riteria used to determine if the product is in the "interest of national economic 
development?  
 
Response : 
 
Under the rules governing the implementation of the last clause of the last paragraph of 
Section 800 of the Customs Modernization Act (formerly Section 105 of the Tariff and 
Customs Code, as amended), importation through purchase or donation may qualify for 
duty exemption provided these consist of essential machinery and equipment and other 
goods, subject to certain conditions, and are imported by  qualified donees/recipients 
including among others government or private primary (Level1) or secondary (Level 2) 
hospitals duly registered and licensed to operate by the Philippine Department of Health 
pursuant to Republic Act No. 4226  Medical and hospit al equipment including x ray 
machines, BP machines (excluding mercury type), ECG/EKG machines, wheel chairs, 
hospital beds (except cushion), ambulances may qualify for duty exemption so long as 
imported by qualified hospitals. Requests for duty exemption a re processed on a per 
shipment basis (www.neda.gov.ph/citizens charter/).  
 WT/TPR/M/3 68/Add.1  
 
- 13 - 
 
  4. Could you provide an example where the franchise has been implemented based on the 
aforementioned criteria?  
 
Response : 
 
Not applicable.  
 
5. In table 3.5, it is explained through the footnote that, annually, the specific tax on some 
products is increased by 4%.  
 
What is the reason for this annual increase?  
 
Does this increase apply to both domestic and imported products?  
 
Is there a deadline for this increase, in terms of number of  years?  
 
Response : 
 
The table was not included in the query. However, we assumed that it refers to the four 
percent (4%) indexation of alcohol and tobacco products indicated in the Republic Act 
(RA) No. 8424 or the National Internal Revenue Code of 1997, a s amended by RA No. 
10351 or the Sin Tax Reform Law of 2012.  
 
The said annual indexation accounts for inflation which applies to both domestic and 
imported products. In addition, there is no sunset provision for this increase unless 
amended by another law.  
 
6. Paragraph 3.63 refers to mandatory national technical standards and the need for the importer 
to have a certificate of conformity to guarantee the entry of the product into the country. The 
same paragraph mentions that even products that have a foreig n certification that shows 
compliance with international standards can be subject to examination.  
 
What is the procedure to obtain the certificate of conformity of the import product?  
 
What are the criteria used to require that samples of imported products  be examined, including 
those that have a foreign certification in accordance with international standards?  
 
Response : 
 
On the procedures on obtaining a certificate of conformity of the import product, 
Argentina may access 
http://www.bps.dti.gov.ph/index.php?option=com_docman&task=cat_view&gid=200&
Itemid=104 which outlines the procedures for products covered by the BPS’ Certification 
Schemes which are mostly consumer products.  
 
On the criteria used to require the submission of samples of imported products to be 
examined including those that have a foreign certification, the Philippines would refers 
Argentina to the rules and regulations of the Bureau of Philippine Standards Mandatory 
Product Certification Scheme covered by De partment Administrative Order (DAO) 04 
Series 2008 and DAO 05 Series 2008 which could be accessed at 
http://www.bps.dti.gov.ph/index.php?option=com_docman&task=cat_view&gid=56&li
mit=5&order=name&dir=ASC&Itemid=78 . 
 
7. Paragraph 3.73 mentions the regime for the accreditation of imports of food products.  
 
Does the Philippines have any agreement or recogniti on of establishments between its Food 
Department and other organizations of similar hierarchy in other countries? If it is affirmative, it 
would be desirable to know if this agreement facilitates the importation of this type of product.  
 WT/TPR/M/3 68/Add.1  
 
- 14 - 
 
  Response : 
 
Agreeme nts and recognition of establishments are in place.  Based on Republic Act 
9711, the prerequisites for importation of all processed food products is to obtain a 
license to operate (LTO) as a Philippine food distributor -importer and a certificate of 
product  registration (CPR) of the specific prepackaged and processed food product. 
While the Philippine Food and Drug Administration does not provide accreditation to 
organizations from other countries, it does recognize the certificate of free sale (food) 
issued  by its counterpart National Competent Authority. Certificates of free sale (food) 
issued by chamber of commerce and industries will need authentication by the 
Philippine Embassy.  
 
For meat, a mechanism is in place to recognize establishments which have un dergone 
the accreditation process under Administrative Order No. 16 to facilitate the importation 
of meats . 
 
8. Paragraph 4.134 indicates that the Tourism Act of the Philippines creates "Tourism Enterprise 
Zones" (TEZs) with tax incentives through which, a mong other things, temporary exemption from 
income tax is granted for a period of 12 years, exemption from VAT and special taxes on imported 
goods, importation of capital goods and equipment under duty -free treatment and tax credits 
equivalent to national taxes paid for local services and goods destined for the activities of the TEZ.  
What requirements must foreign companies meet in order to obtain these benefits?  
 
Response : 
 
Foreign companies may invest in tourism enterprises inside a designated tourism 
enterprise zone and register it with the Tourism Infrastructure and Enterprise Zone 
Authority (TIEZA) to avail of incentives under “Tourism Act of 2009 or R.A. 9593.  More 
details are available in the Implementing Rules and Regulations of the Tourism Act 
whic h can be accessed from:   
 
http://www.tourism.gov.ph/Downloadable%20Files/RA%209593.pdf .  
 
In addition to Paragraph 4.134 of the Secretariat Report, lands and buildings in each 
tourism enterprise zone may be leased to foreign investors for a period not exceeding 
50 years, renewable once for a period of not more than 25 years. The leasehold right 
acquired under long -term contracts may be sold, transferred or assigned, subject to t he 
conditions set forth under the Investor’s Lease Act.  
 
9. Paragraph 3.14 reports on the tariff phenomenon "mixed escalation".  
 
What logic corresponds to the adoption of this tariff profile?  
 
Response : 
 
The Philippines’ tariff structure is guided by higher tariffs for agricultural products and 
lower tariffs for finished goods, which is a common structure among other WTO 
members.  
 
10. Paragraph 3.16 qualifies the quota administration system as "complex".  
 
Do you share this diagnosis?  
 
In such a case, w ould you consider adopting measures to simplify this system?  
 
What economic effects are sought by introducing quantitative elements in the form of tariff 
quotas?  
 
Response : 
 
The Philippines has issued guidelines to effectively implement the tariff quota system 
administration where procedures and processes are clearly defined. Likewise, all WT/TPR/M/3 68/Add.1  
 
- 15 - 
 
  measures are regularly reviewed and any amendments introduced must be consistent 
with ou r domestic laws and international commitments.  
 
11. Paragraph 4.7 indicates that the objective of agricultural policy is to achieve self -sufficiency.  
What role does international trade play in this strategy?  
 
Response : 
 
Food security has always been the pr iority of the Philippine Government. To achieve 
this, aside from increasing the production and competitiveness of the domestic 
agriculture and fisheries sector, importation of staple food such as rice is needed for 
buffer stocking purposes.   
 
12. Paragrap h 4.14 indicates that the Philippines has notified the granting of subsidies to exports 
of agricultural products until 2015.  
 
Did these operations continue after 2015?  
 
Response : 
 
The Philippines has not provided any form of export subsidy to its agricultural products 
during the period of review. It will provide a new notification on this status as soon as 
possible.  
AUSTRALIA  
Report by the Secretariat (WT/TPR/S/368)  
 
Summary  
 
Page 8, paragraph 24  
 
The report states that the National Broadband Plan aims to improve telecom infrastructure and 
promote an open access network, as well as to enhance foreign investment in the sector.  
 
Question 1  
 
What are the key aspects of the Plan that will result in improved infrastructure, greater foreign 
investment in the sector and promotion of an open access network?  
 
Response : 
 
The National Broadband Plan (NBP) has three major broad implementation strategies, 
as follows:  
 
 Policy and Regulatory Reforms: With the rapid development and advancement in 
the telecommunicati ons and ICT sector, existing frameworks governing this 
industry should undergo reforms to cope with the new trends in technologies. 
Given this situation, the government will focus on review and amendment of 
relevant laws.  
 
 Investment on Broadband Infostructure: Establishment of the Philippine 
Integrated Infostructure (PhII) is proposed to address the bottlenecks in 
backbone and backhaul segments, as well as to serve the augmentation of 
bandwidth requirements of today’s digit al society. To implement the PhII, the 
government will address the lack of market capacity for implementation within 
the required timeframe and will avoid infostructure surplus while building the 
network. Careful consideration between the scope variant and  commercial 
strategies on direct government build and operation, PPP arrangement, and 
subsidized investment will be undertaken to establish a PhII. This may 
necessitate one or several public -private partnership (PPP) agreements to deliver 
new infrastructur e and services.  WT/TPR/M/3 68/Add.1  
 
- 16 - 
 
   
 Government Support to Stimulate Broadband Demand: In order to sustain the 
momentum of pervasive infostructure development, the government will 
establish necessary “pull” measures to stimulate demand, and eventually 
increase broadband take -up rate. These include programs and interventions that 
will focus on the following: (a) Local Content Development; (b) Conduct of 
Capacity Building and Information Outreach Programs; and (c) Introduction of 
Incentives to Broadband Users.  
 
Report by the Se cretariat (WT/TPR/S/368)  
 
2. Trade and Investment Regimes  
 
2.2 Trade Policy Formulation and Objectives  
 
Page 23, paragraph 2.5(e)  
 
The report states that the Interagency Committee on Trade in Services (IAC -TS) recommends 
positions on GATS implementation ma tters and has expanded its coverage to include bilateral and 
regional arrangements pertaining to trade in services.  
 
Question 2  
 
What role does the IAC -TS have in identifying opportunities for greater liberalisation in the 
services sector?  
 
Response : 
 
Aside from the GATS, the IAC -TS coordinates the preparation and recommends 
Philippine positions for services -related negotiations in bilateral, regional and 
multilateral fora.    
 
Liberalization/facilitation initiatives laid out in the proposed legislative  agenda in the 
Philippine Development Plan 2017 -22 are proposed and/or supported by member 
agencies of the IAC -TS.   
 
Report by the Secretariat (WT/TPR/S/368)  
 
3 Trade Policies and Practices by Measure  
 
3.3 Measures Affecting Production and Trade  
 
3.3.8 Intellectual property rights  
  
Pages 55 to 57 , Paragraphs 3.3.8.2, 3.3.8.4 and 3.3.8.6  
  
The report outlines the protection provided in the Philippines for new plant varieties, inventions 
and trade marks.  
  
Question 3  
 
When does the Philippines expect to accede to the International Convention for the Protection of 
New Varieties of Plants, as revised at Geneva, March 19, 1991 (UPOV 91)? Australia notes that the 
Philippines has already initiated the procedure for accession to this agreement.  
 
Response : 
 
There was only an initial inquiry made by the Philippines in 2002 which need not be 
considered as a step towards accession. At present, the Philippines is not inclined to 
become a member of UPOV 1991. Nevertheless, plant varieties that are new, distinct, 
unifo rm, and stable are protected under a sui generis system pursuant to Republic Act 
No. 9168 or the Plant Variety Protection Act of the Philippines.  WT/TPR/M/3 68/Add.1  
 
- 17 - 
 
   
Question 4  
 
Does the Philippines intend to accede to the Patent Law Treaty and to the Singapore Treaty on the  
Law of Trademarks?  
 
Response : 
 
At this time, the Philippines is not inclined to accede to the Patent Law Treaty because 
some provisions, particularly Article 5 (“Filing Date”) and Article 13 (on the “Restoration 
of Priority Right”), are inconsistent with certain provisions of the IP Code, as amended.  
 
On the other hand, the Philippines is currently studying the Singapore Treaty on the Law 
of Trademarks.  
 
Report by the Secretariat (WT/TPR/S/368)  
 
4 Trade Policies by sector  
 
4.1 Agriculture  
 
4.1.3 Domestic support  
 
Page 60, Paragraph 4.7  
 
Australia notes the Philippine Government policy is to be self -sufficient in the production of rice, 
sugar and maize. Australia sees trade liberalisation as enhancing food security in this context and 
welcomes the contribut ion of the ASEAN -Australia -New Zealand Free Trade Agreement in 
supporting enhanced regional food security needs.  
 
Question 5  
 
Can the Philippines please further advise how they are measuring their achievement of self -
sufficiency?  
 
Response : 
 
It is the po licy of the Philippines to attain reasonable levels of self -sufficiency in these 
commodities while honoring commitments under established international trading rules 
and disciplines.  
 
The Philippines recognizes the importance of trade liberalization especi ally under the 
AANZFTA agreement.  It should be noted, however, that trade is not the sole answer to 
the Philippines’ food security concerns. Crucial commodities need to be supported so 
that Filipino consumers are also protected against speculative element s and 
perturbations as in the international markets for rice, sugar and maize.  
 
Report by the Secretariat (WT/TPR/S/368)  
 
4 Trade Policies by Sector  
 
4.1 Agriculture  
 
4.1.6 Sugar  
 
Page 65, Paragraph 4.30  
 
Australia notes the Philippine Government’s increased support for the domestic sugar industry 
under the Sugarcane Industry Development Act of 2015.  
 
Question 6  
 WT/TPR/M/3 68/Add.1  
 
- 18 - 
 
  Can the Philippines please explain what impact the measures under the Sugarcane Industry 
Devel opment Act have had on the Philippine sugarcane industry?  
 
Response : 
 
The sugarcane industry was provided enhanced support under the Sugarcane Industry 
Development Act starting in end of 2016.   The Act is a direct policy response to recent 
developments in the sugarcane industry that has been adversely affected by the 
compre hensive agrarian reform law.  A vast majority of sugarcane farmers are agrarian 
reform beneficiaries with average farm sizes of two (2) hectares; the comprehensive 
agrarian reform transformed the plantation mode of sugarcane production to one that is 
domin ated by small sugarcane farmers.  
 
In view of the above, most of the enhanced support in the sugarcane sector consisted 
primarily of infrastructure, research and development, and capacity building. No 
trade -distorting support were introduced. There are cur rently no existing studies on the 
impact of the measures themselves.  
 
Report by the Secretariat (WT/TPR/S/368)  
 
4.5 Services  
 
4.5.1 Financial Services  
 
4.5.1.1 Banking  
 
Page 72, paragraph 4.72  
 
The report states the Full Entry of Foreign Banks Act abolishe s restrictions on foreign ownership of 
banks, but banks are limited to establishing five branches.  
 
Question 7  
 
How has this policy assisted in encouraging foreign banks to enter the market?  Are there plans to 
liberalise access further in the future?  
 
Response : 
 
The Bangko Sentral ng Pilipinas (BSP; Central Bank of the Philippines) declared 
microfinance as its flagship programme for poverty alleviation in the year 2000.  Since 
then, it has been proactive in the development of microfinance in the banking  system in 
terms of: (a) policy and regulatory environment; (b) training and capacity building 
within the BSP and the banking sector; and (c) promotion and advocacy. As a result, 
microfinance has become fully mainstreamed in the banking sector and more inn ovative 
products have been developed by the market to respond to the demand for a wider 
range of products beyond microcredit. These include micro -agricultural loans (Circular 
748), housing microfinance (Circular 678), micro -deposit (Circular 694), and 
micro-insurance (Circular 683).  In 2016, there were 168 banks with microfinance 
operation serving 1.7 million clients with outstanding microfina nce loans amounting to 
PHP 13.7 billion.  
 
In light of the importance and multi -dimensional nature of financial inclusion, the BSP 
led the implementation of the National Strategy for Financial Inclusion (NSFI) to help 
raise the level of awareness on financial inclusion issues, build trust among various 
stakeholders, identify the best modalities for coordination, and  ensure relevance at the 
national level. The National Strategy for Financial Inclusion aims to systematically 
accelerate the level of financial inclusion in the Philippines through greater collaboration 
between public and private sector stakeholders. It pr ovides a platform for public -private 
partnerships to harmonize initiatives and foster a more efficient process to achieve the 
shared vision of financial inclusion that contributes to inclusive growth.  
 
Report by the Secretariat (WT/TPR/S/368)  WT/TPR/M/3 68/Add.1  
 
- 19 - 
 
   
4.5 Services  
 
4.5.2 Telecommunications  
 
Page 77, paragraph 4.101  
 
The report states that telecoms services are regarded as a public utility and subject to limitations 
under the Constitution and domestic legislation.  
 
Question 8  
 
Are there any plans to open up telecomm unication services not subject to domestic limitations to 
greater foreign participation?  
 
Response : 
 
Senate Hearings are being conducted on the proposed bills amending the Public Service 
Act. These hearings are being conducted by the Senate Committee on Pu blic Services 
jointly with the Committees on Finance and Economic Affairs. The proposed 
amendments to the Public Service Act aim to remove the transport and 
telecommunications sector from the definition of “public utility” to address the debate 
that althou gh these sectors are public services, they are not necessarily public utilities. 
Public utilities are a subset of public services.  By addressing this issue, the plan is to 
remove the said sectors from the coverage of the foreign equity limit of 40%, as 
provided under Article XII of the Philippine Constitution.  
 
Report by the Secretariat (WT/TPR/S/368)  
 
4.5 Services  
 
4.5.4 Tourism  
 
Page 82, paragraph 4.134  
 
The report states that the Tourism Act developed the concept of a Tourism Enterprise Zone and as 
of the end of 2015, 52 tourism infrastructure projects had been implemented in the Tourism 
Enterprise Zone.  
 
Question 9  
 
Noting foreign ownership limitations, what proportion of the projects have foreign capital input?  
 
Response : 
 
There are no foreign capital  input in the 52 infrastructure projects as these are TIEZA 
projects in government owned properties in various tourist destinations in the 
Philippines. Moreover, bidding for implementation of these infrastructure projects are 
not open to foreign companies.  
 
  WT/TPR/M/3 68/Add.1  
 
- 20 - 
 
  BRAZIL  
PART 1: QUESTIONS REGARDING THE SECRETARIAT REPORT  
 
3 TRADE POLICIES AND PRACTICES BY MEASURE  
 
Page 30 (Para 3.7)  
 
A Valuation and Classification Review Committee (VCRC) is organized in every district port to solve 
valuation and classification d isputes. The decision of the VCRC is appealable to the Central 
Valuation Classification Review and Ruling Committee (CVCRRC) within 15 days of receipt of the 
decision. The CVCRRC's decision is subject only to one motion for reconsideration, which needs to 
be filed within five working days of its receipt. If no motion is filed in time or if denied, the 
CVCRRC resolution becomes final. The aggrieved importer may pay under "formal protest".  
 
Question 1: Is it possible to detail the procedures and overview of the work of the Valuation and 
Classification Review Committees, in light of the short deadlines provided for the submission of a 
motion of reconsideration?  
 
Response : 
 
Under Customs Memorandum Order No. 3 -2000, any appeal or motion for 
reconsideration from any decision of the Valuation and Classification Review Committee 
(VCRC) shall be submitted to the Commissioner of Customs. In line with such, under the 
Customs Modern ization and Tariff Act, the Commissioner of Customs is given the power 
to decide any and all appeals submitted for decision.  
 
The VCRC is composed of Customs Operations Officer III (COO III), Formal Entry 
Division Chief, Deputy Collector for Assessment an d the District Collector (Presiding 
Chair). The VCRC Hearing is attended by the VCRC members, importer, broker or their 
lawyer.  
 
Under VCRC, a formal protest will be addressed prior to the release of goods and 
approval of letter request in a timely protest . In payment under protest, goods are 
already released and VCRC hearing will be conducted to hear the side of the importers.  
 
Page 46 (Para 3.59)  
 
Certain tax incentives provided by the Board of Investments under the Omnibus Investment Code 
to exporters of  non-traditional goods are contingent on export performance. The export 
performance requirement is higher for foreign -owned enterprises (70% of production) than for 
Philippine -owned companies (50%). According to the authorities, these provisions are curren tly 
under revision.  
 
Question 2: Could the Philippines provide a list of the “non -traditional goods”? Would any good 
included in this category benefit from the tax incentives or are there other criteria that apply?  
 
Response : 
 
There is no specific list of  non-traditional goods but are only described as those with an 
export value of less than USD 5 million in the year 1968. Being engaged in the 
production of a non -traditional good does not automatically merit tax incentives. 
Conditions may apply depending o n the relevant policies and guidelines at the time the 
project was registered with the Board of Investments.  
 
Under Article 22 of the Omnibus Investments Code of 1987, registerable "export 
products" (i.e. Non -traditional Export Products) are those that are  “manufactured or 
processed products the total F.O.B. Philippine Port Value of the exports of which did not 
exceed five million dollars in the United States Currency in the calendar year 1968."  
 WT/TPR/M/3 68/Add.1  
 
- 21 - 
 
  Page 47 (Para 3.69)  
 
The scientific basis of the food safety regime has been strengthened, according to the authorities. 
The new Act provides that SPS measures must be based, amongst others, on the principles of non -
discrimination, scientific evidence, proportionality, precaution, traceability, and transparency. The  
principle of equivalence is recognized. The responsibility for achieving the Food Safety Act's 
objectives is shared between the Government and the food business operators. New traceability 
requirements apply along the food chain.  
 
Question 3 : There are re ports that national sanitary authorities may adopt different expiry dates 
and deadlines for the acceptable date of the slaughter of the animal for the import of frozen beef 
meat, poultry and pork, depending on the country of origin of the product. In some cases, the 
acceptable date of slaughter would be 6 months and in others, 12 months. If so, how do these 
measures comply with the principle of non -discrimination included in the Food Safety Act of 2013?  
 
Response : 
 
The Philippines complies with principle of non -discrimination and does not adopt 
different expiry dates for the acceptable date of slaughter.  The Philippines, however, 
adopts this particular provision - The meat to be exported shall arrive in the Philippi ne 
port not later than six months from the production date as shown in the label, Bill of 
Lading/Airway Bill, and International Veterinary Certificate.  This particular condition 
was included to ensure that the Philippines does not receive meat that have b een 
produced earlier and have been in storage for years before being exported into the 
country. We have reports of commodities arriving in the Philippines with near expiry or 
best before dates.  This is not an issue on meat safety but rather on meat qualit y. 
Question 4: Having the Food Safety Act of 2013 provided that SPS measures must be based, 
amongst others, on the principles of non -discrimination, scientific evidence, proportionality, 
precaution, traceability, and transparency, is there a roadmap or dea dlines for the review of cases 
in which SPS measures are found to be non -compliant with such principles?  
 
Response : 
 
The Philippines can confirm that there is no roadmap nor deadlines for the review of SPS 
measures. At the same time, the Philippines is com pliant with its domestic laws and 
international standards on this issue.  
 
Page 48 (Para 3.73)  
 
The main features of the import "accreditation" regime remain unchanged (see Annex Table A3.2):  
 
b. Import consignments of food (other than processed and pre-packaged) require a permit ("SPS 
import clearance") issued by the Department of Agriculture. Prior to arrival, an Import Notification 
Document is required, on the basis of which the need for inspections, including lab testing, is 
determined by the DA o r the DoH. Inspections are risk -based; and according to the Food Safety 
Act are to take place prior to the assessment of customs duties and other charges (specific 
guidelines are to be developed).  
 
Question 5: When an inspection is undertaken on raw beef o r chicken MDM (mechanically deboned 
meat), what laboratory test(s) is(are) undertaken and what is the standard that must be complied 
with? Is it based on total plate count or on “zero tolerance” for specific presences such as 
salmonella? Is this standard t he same for both domestic -produced meat and imported meat?  
 
Response : 
 
The assessment of the microbiological identification was guided by NMIS Memorandum 
Circular No.9 -2008 -5 Series of 2008 “Guidelines on the Assessment of Microbiological 
Quality of Fresh,  Chilled and Frozen Meat”. The aforementioned guideline serves as the 
guideline for both locally produced and imported meat.  WT/TPR/M/3 68/Add.1  
 
- 22 - 
 
  While the Philippines is implementing its surveillance program to ensure food safety, the 
conduct of laboratory testing for meat, b oth local and imported, are done only when 
there are reports of adverse findings of contamination.  
Page 48 (Para 3.74)  
 
The Department of Agriculture and the Department of Health have implemented an electronic 
system for licence and permit applications. F urthermore, the Philippines has launched an initiative 
to establish an enhanced (web -based) single window, which would incorporate the DA/DoH import 
accreditation requirements and the DA's process of issuing import clearances.  
 
Question 6:  Is it possible t o provide details on the functioning of the electronic system for 
processing import authorizations, in light of reports that indicate a return to the manual 
procedures for certain products, causing extensive delays on the process of concession of 
authoriza tions?  
 
Response : 
 
The Philippines is currently in the process of improving its automated system for 
processing import clearances in line with the national program to enhance the National 
Single Window. The TradeNet system is being prepared for live operation by the middle 
of 2018.  This will allow parties involved in trade to lodge information and documents to 
fulfill all import, export and transit -related regulatory requirements.  
In the meantime,  the Food and Drug Administration (FDA) of the Department of Health 
has instit uted an electronic system for the processing of import authorization (License 
to Operate and Certificate of Product Registration).   A License to Operate (LTO) as food 
distributor -importer needs to be secured from the FDA while a Certificate of Product 
Registration (CPR), a pre -market approval certificate, needs to be obtained for each and 
every product prior to importation. The electronic system for the processing of import 
authorization can be accessed through the FDA website ( https://www.fda.gov.ph ) e-portal.  
The general direction of the Philippines is to simplify and automate the processes; there 
are no plans to revert or return to manual procedures.  
PART 2: QUESTIONS REGARDING THE GOVERNMENT REPORT  
 
2 Domestic Pol icies and Initiatives to Sustain Long -Term Growth and Improve the Business 
Environment for Inclusive Growth  
 
Page 08 (Paragraph 2.22 ) 
One of the salient features of the overall growth strategy is its emphasis on investment. In 
particular, driving this area of the economy is the Comprehensive National Industrial Strategy. 
Since 2014, the strategy has produced several industrial roadmaps. The industrial strategy aims 
for a stronger linkage of agribusiness, manufacturing and services. Apart from the IT -BPM sector, 
which has remained a major growth driver of the country, the services roadmap focuses on the 
development of labor -intensive secto rs like tourism, construction, ship repair, aircraft MRO 
(maintenance, repair and overhaul), logistics and infrastructure investments. The industrial 
strategy is targeted for implementation until the end of 2025. Based on data thus far, the 
industrial stra tegy has yielded investments and accelerated expansions in the recent years.  
Question 7: Regarding “ Comprehensive National Industrial Strategy ”, could the Philippines provide 
more details about about its legal framework, results obtained since 2014 and al so about the next 
steps of its implementation?  
Response : 
The Comprehensive National Industrial Strategy or now known as the Inclusive 
Innovation Industrial Strategy (I3S) is the new industrial policy of the government WT/TPR/M/3 68/Add.1  
 
- 23 - 
 
  which aims to grow innovative and glob ally competitive manufacturing, agriculture and 
services, while strengthening their linkages into domestic and global value chains.  
The I3S emphasizes the role of the government as enabler of businesses and as such, 
should implement initiatives to address the most binding constraints that prevent the 
entry of new firms or hinder the country’s industries’ integration into the regional and 
global value chains. It serves as the policy framework to encourage the development of 
the private sector to build on the  country’s comparative advantage.  
Under the I3S, the government will pursue the following strategic actions:  
1. Building new industries, clusters and agglomeration  
2. Capacity -building and human resource development  
3. MSME growth and development  
4. Innovation and ent repreneurship  
5. Ease of doing business and investment environment  
Since the implementation of industry development initiatives in 2012, including the 
manufacturing resurgence program (MRP) and the broader I3S, the Industry and 
Services Sectors grew at an ave rage of 7.7 and 6.9 percent from 2012 -2017, 
respectively. These are higher than the average growth from 2006 -2010 prior to the 
implementation of these initiatives wherein the Industry and Services Sectors posted 
4.4 and 5.5 percent growth, respectively.  
As to the next steps, the Philippines will further intensify efforts in infrastructure 
development, streamlining business processes, industry competitiveness enhancement 
and fostering innovative and inclusive business models.  
Pages 09 and 10 (Paragraphs 2.23  and 2.26 ) 
The Bangko Sentral ng Pilipinas (BSP; Central Bank of the Philippines) declared microfinance as its 
flagship programme for poverty alleviation in the year 2000. Since then, it has been proactive in 
the development of microfinance in the banking system in terms of: (a) policy and regulatory 
environment; (b) training and capacity building within the BSP and the banking sector; and (c) 
promotion and advocacy. As a result, microfinance has become fully mainstreamed in the banking 
sector and more inno vative products have been developed by the market to respond to the 
demand for a wider range of products beyond microcredit. These include micro -agri loans (Circular 
748), housing microfinance (Circular 678), micro -deposit (Circular 694), and microinsuranc e 
(Circular 683). In 2016, there were 168 banks with microfinance operation serving 1.7 million 
clients with outstanding microfinance loans amounting to PHP 13.7 billion.  
(…) 
In light of the importance and multi -dimensional nature of financial inclusion, the BSP led the 
implementation of the National Strategy for Financial Inclusion (NSFI) to help raise the level of 
awareness on financial inclusion issues, build trust among various stakeholders, identify the best 
modalities for coordination, and ensure rel evance at the national level. The National Strategy for 
Financial Inclusion aims to systematically accelerate the level of financial inclusion in the 
Philippines through greater collaboration between public and private sector stakeholders. It 
provides a pl atform for public -private partnerships to harmonize initiatives and foster a more 
efficient process to achieve the shared vision of financial inclusion that contributes to inclusive 
growth.  
Question 8: Could the Philippines explain further its public polic ies related to microfinance and 
financial inclusion? What kind of challenges is the Philippines facing on banking domestic 
regulation?  WT/TPR/M/3 68/Add.1  
 
- 24 - 
 
  Response : 
 
In terms of microfinance and financial inclusion, the BSP has played a key role since 
2000 in increasing acces s to financial services to the poor and low income population by 
mainstreaming microfinance in the banking sector. In 2007, it progressed the advocacy 
from microfinance to financial inclusion. The BSP was among the first central banks to 
create a unit dedi cated to promoting financial inclusion.  
 
The BSP recognizes financial inclusion as a worthy policy objective that can be pursued 
as a complement to the three pillars of central banking (price stability, financial 
stability, and efficient payments and settl ements system). In this regard, the BSP has 
taken deliberate measures in promoting financial inclusion through: (1) policy and 
regulation; (2) financial education and consumer protection; (3) advocacy programs; 
and (4) data and measurement.  
 
The general ap proach is to establish a supportive regulatory environment that enables 
market -based solutions to thrive. Useful innovations need not be stifled but instead be 
allowed to operate in an environment where the risks associated with such innovations 
are adequa tely understood and addressed, and where there is proportionate application 
of sound principles.  
 
The Philippines’ regulations allow for (1) wider r ange of financial products; 
(2) expanded physical and virtual reach of financial services; (3) liberalized o n-boarding 
of customers; and (4) protection of the financial consumers.  
 
Building on these gains, the BSP continues to create an enabling regulatory environment 
for financial inclusion. This time, it is setting its sights on digital innovations as catalyst  
and strategic enabler for financial inclusion.  
 
Digital technology can significantly reduce transaction costs and expand reach – making 
it possible and even compelling for banks and other financial institutions to serve the 
hugely untapped low -income mar ket. 
 
The goal is to develop a digital finance ecosystem that supports the diverse needs of all 
users in a manner that is secure, sustainable, convenient, and affordable. For the service 
providers - whether new or incumbent, this ecosystem enables them to tap into a wider 
client base, diversify revenue sources, and secure new growth opportunities.  
 
The initiatives hope to address a key challenge that the Philippines is facing which is 
adoption/ actual increase in the number of included people. While the Ph ilippines has 
been lauded for the policy and regulatory approach in microfinance and financial 
inclusion, only over 30% of the population have access to an account.  
CHINA  
Part I.  Questions based on Report by the Secretariat (WT/TPR/S/368)  
 
Summary, Para 2  
 
“Imports of manufactured goods have increased significantly, from 50% of total imports in 2011 to 
76% in 2016. The surge of manufactures imports, in particular capital goods and consumer 
products, can be attributed to increasing infrastructure investment  and the improvement of living 
standards. The United States, the European Union, Japan, China, and ASEAN countries are the 
Philippines' main trading partners.”  
 
Questions:  
1. Which categories have been mainly covered by the manufactured goods and consumer products 
in the largest scale imported by the Philippines in recent years and which industries have been 
involved?  
2. Which types of manufactured goods and consumer products are expected to increase as 
demanded by the Philippines in 2018?  WT/TPR/M/3 68/Add.1  
 
- 25 - 
 
   
Response : 
 
The m anufactured goods and consumer products that covered most of the importation of 
the Philippines from 2015 -2017 are the following:  
 
1. Electrical machinery and equipment and parts (24.4%);  
2. Machinery, mechanical appliances, nuclear reactors, boilers (13.1%);  
3. Mineral fuels, mineral oils and products of distillation (11%);  
4. Vehicles other than railway or tramway rolling stock, and parts and accessories 
(8.3%);  
5. Iron and steel (3.4%);  
6. Plastics and articles (3.4%);  
7. Aircraft, spacecraft and parts (1.9%);  
8. Cereals (1.9%) ; 
9. Optical, photographic, cinematographic, measuring, checking, precision, medical 
or surgical (1.7%);  
10. Pharmaceutical products (1.7%)  
 
 
Summary, Para 9  
 
“The foreign investment regime of the Philippines is governed, inter alia, by the 1987 Constitution 
and the Foreign Investments Act of 1991, which covers all activities except financial services. 
Under the Act, the Philippines establishes (every two years) a Foreign Investment Negative List 
(FINL) of activities in which FDI is restricted. The Philippines co ntinues to limit foreign investment 
in a number of activities (including agriculture, fisheries, telecom services, and public utilities), but 
has also taken some liberalizing steps. Thus, various FDI restrictions were eliminated for 
professional services ( subject to certain exceptions and reciprocity), and banking services. Foreign 
ownership of land is not permitted, but foreign investors may lease land up to a maximum term of 
75 years.”  
 
Question:  
3. Please specify the steps of foreign investment liberaliz ation.  
 
Response : 
 
Laws have been passed and/or amended since the Philippines’ last Trade Policy Review 
in 2012 in order to remove restrictions on foreign investments. These include: 1) 
allowing the full entry of foreign banks in the Philippines; 2) lifting of the cabotage 
restrictions imposed on foreign operators; and 3) opening up of various professional 
services, subject to certain exceptions and reciprocity.  
 
The President provided guidance via Memorandum Order No. 16, s. 2017, on the priority 
investment areas or activit ies where current equity restrictions will be reviewed. These 
include the following:  
 
1.  Private recruitment, whether for local or overseas employment  
2. Practice of particular professions, where allowing foreign participation will 
redound to the public benefit  
3. Contracts for the construction and repair of locally -funded public works  
4. Public services, except activities and systems that are recognized as public 
utilities such as transmission and distribution of electricity, water pipeline 
distribution system, and s ewerage pipeline system  
5. Culture, production, milling, processing, and trading except retailing, of rice and 
corn and acquiring by barter, purchase or otherwise, rice and corn and the by -
products thereof  
6. Teaching at higher education levels  
7. Retail trade ente rprises  
8. Domestic market enterprise  
 WT/TPR/M/3 68/Add.1  
 
- 26 - 
 
  At present, there is an ongoing review of the 1987 Constitution by a 25 -member 
Committee created by the President through Executive Order No. 10 .The Committee is 
expected to complete its review in six months or until June this year. It will submit its 
recommendations and proposals to the President, who will transmit these to Congress . 
 
Summary, Para12  
“Most imports, like domestically produced goods, are subject to value -added tax which has a 
standard rate of 12%. Food products and agricultural inputs are exempt from VAT. Excise taxes 
are levied on alcoholic beverages, tobacco products, automobiles, petroleum products, minerals, 
perfumes and jewellery. A vast range of goods are subject to licences or permits when importe d. 
For certain products, multiple permits or licences are required, and informal payments have been 
reported by the business community.”  
 
Question:  
4. Why multiple licenses or permits are required for certain imported products? Please list these 
products.  
 
Response : 
 
As indicated in the report, some products are regulated for public health, national 
security and welfare reasons which involve the assistance of one or more agencies as 
well to satisfy international treaty obligations, such the Convention on International 
Trade in Endangered Species of Wild Fauna and Flora (CITES).  
 
The list of products was notified by the Philippines in WTO document 
G/LIC/N/3/PHL/12 dated 19 October 2016 and is also included in the Secretariat 
Report as Table 3.6.   
 
The list of regulated  imports can be downloaded at http://customs.gov.ph/users -guide -to-
the-bureau -of-customs -regulated -imports -list/  
 
Page 27, Para 2.27  
 
“The Philippines conti nues to restrict foreign investment in a number of activities including 
agriculture, fisheries, telecom services, and public utilities, but it has also taken some liberalizing 
steps...The remaining FDI restrictions are made public in a transparent manner t hrough a 
consolidated negative list.”  
 
Question:  
5. The Philippines has made some efforts to lift restrictions on foreign investment in some sectors. 
However, there are still a number of restrictions in sectors relatively attractive to foreign 
investment s uch as mining, energy, construction and public utilities. In this regard, does the 
Philippines plan to further open up for foreign investment such as further lifting the restrictions on 
the proportion of foreign investment and relaxing access thresholds?  
 
Response : 
 
The President provided guidance via Memorandum Order No. 16, s. 2017, on the priority 
investment areas or activities where current equity restrictions will be reviewed. These 
include the following:  
 
1.  Private recruitment, whether for local or ove rseas employment  
2. Practice of particular professions, where allowing foreign participation will 
redound to the public benefit  
3. Contracts for the construction and repair of locally -funded public works  
4. Public services, except activities and systems that are re cognized as public 
utilities such as transmission and distribution of electricity, water pipeline 
distribution system, and sewerage pipeline system  WT/TPR/M/3 68/Add.1  
 
- 27 - 
 
  5. Culture, production, milling, processing, and trading except retailing, of rice and 
corn and acquiring by ba rter, purchase or otherwise, rice and corn and the by -
products thereof  
6. Teaching at higher education levels  
7. Retail trade enterprises  
8. Domestic market enterprise  
 
At present, there is an ongoing review of the 1987 Constitution by a 25 -member 
Committee created  by the President through Executive Order No. 10. The Committee is 
expected to complete its review in six months or until June this year. It will submit its 
recommendations and proposals to the President, who will transmit these to Congress  
 
Page 31, Table  1 Structure of the MFN tariff schedule, 2011 and 2017  
 
Question:  
6. According to Table 3.1, international tariff peaks (% of goods with tariff rates exceeding 15% in 
total goods) in the  Philippines rose from 4.5% in 2011 to 5.1% (HS12) and 8.5% (HS17) in 2017 . 
Does this reflect the deepening of trade barriers set by the Philippines? Please explain.  
 
Response : 
 
There were no major changes in tariffs over the given period.  
 
From 2011 to 2 017, the most relevant Executive Orders issued were EO 61 s. 2011 
which laid down tariffs from 2011 -2016 and EO 20 s. 2017 which set the tariff structure 
for 2017 -2020.  
 
The increases in tariff peaks are mainly attributed to increases in the number of tari ff 
lines, from 8,299 in 2011 to 9,559 in 2014 and to 10,813 in 2017, resulting from the 
HS/AHTN (ASEAN Harmonised Tarficc Nomenclature) transpositions from 2007 to 2012 
to 2017.  An example of this is the increase in tariff lines of HS Chapter 87 from 331 in 
2011 to 932 in 2017 wherein most of the tariff lines have MFN rates of 30%.  
 
Page 43, Para 3.47  
 
“Export prohibitions apply to certain wildlife and plant species, gold from small -scale mining46, raw 
rattan, logs from naturally grown trees, and matured coconuts.47” 
 
Question:  
7. Footnote 46 mentioned the export prohibition of gold from small -scale mining. What is the 
purpose of this prohibition? How to avoid the indirect export by small -scale miners selling the gold 
mined to large -scale mining companies?  
 
Response : 
The purpose of the export prohibition of gold from small -scale mining is for the Bangko 
Sentral ng Pilipinas  (BSP) to be able to ensure the financial stability through adequate 
international reserves. The BSP holds gold as a reserve asset.   
Large -scale mining companies are not allowed to engage in buying gold from small -scale 
mining companies and will face sanctions for circumvention of the law. Large scale 
mining companies are subject to stricter regulations. They are required to submit 
mont hly reports on production, sales and inventory of metallic minerals.  
Page 43, Para 3.48  
 
“Export restrictions and licences apply to a very wide range of products (Table 3.9). The 
elimination of restrictions and licensing requirements for some products wou ld facilitate their 
exportation.”  
 WT/TPR/M/3 68/Add.1  
 
- 28 - 
 
  Questions:  
8. In terms of specific minerals, what are the basic conditions that need to be met to obtain export 
licenses? If an enterprise fails to obtain an export license, what are the Philippines’ requirements 
on the s ale or disposal of its minerals?  
 
Response : 
 
Pursuant to the Mining Act of 1995 and Executive Order No. 469 as amended and in 
order to eradicate undervaluation, misdeclaration and red tape in the exportation of 
mineral ores and to improve the collection of  excise tax on minerals, all 
transport/shipment of mineral ores, including tailings, outside the Philippines shall be 
covered by Mineral Ore Export Permit (MOEP).  
 
The mandatory requirements in the acceptance of an application for MOEP are as 
follows:  
 
 Ore Transport Permit (OTP) or Delivery Receipt in the case of sand and gravel 
permit holders;  
 Marketing Contract/Sales Agreement with the purchaser;  
 Copy of the Permit/contract issued to the Permit Holder/ Contractor, and/or 
Accreditation of traders, retail ers, processors, whichever is applicable;  
 Other supporting papers as the Secretary of the Department of Environment and 
Natural Resources may require or the applicant may submit.  
 
Any permit holders, including small scale mining permits and other mining r ights 
holders who fail to present the MOEP in the course of transport/shipment of the mineral 
ore(s), including tailings upon demand by authorized MGB/DENR personnel and other 
deputies and/or law enforcement authorities, shall be considered as prima facie 
evidence of illegal mining/theft of minerals and shall be sufficient cause for the 
seizure/confiscation of the said materials and the tools and equipment, including the 
conveyances used in the transport/shipment of the said materials.  
 
9. In other multilat eral or bilateral agreements signed by the Philippines, are there any preferential 
treatments offered for the parties to the agreements in terms of mineral export restrictions?  
 
Response : 
Philippine bilateral FTAs do not have any  specific  provisions on mineral export 
restrictions. Nevertheless, below are some related provisions under our FTAs.  
On export restrictions,  the Philippines -EFTA (European Free Trade Association) FTA, 
Article 2.4 on Export Duties only  specifies the elimination of all customs duti es and 
charges on the  exportation of goods and that no new export duties shall be introduced 
by the Parties  upon entry into force of the Agreement, except on  exports of logs from 
the Philippines.  Article 2.6 of the PH -EFTA FTA also upholds the General Proh ibition of 
Quantitative Restrictions for  imports and  exports under  Article XI of  GATT 1994.   
Similarly, Article 20 of the Philippines -Japan EPA (PJEPA)  states that both sides will 
exert best efforts to eliminate duties on exported goods. Under Article 26, par.3 of the 
PJEPA, a Special Sub -Committee on Iron and Steel Products was established to 
"... review issues related to the implementation of tariff elimination commitment on iron 
and steel products." However, this sub -committee has not  been convened to da te.  
Page 69, Para 4.52  
 
“The DOE issued the National Renewable Energy Programme (NREP), with the aim of diversifying 
and expanding renewable energy. Under the NREP, the Philippines aims to double the 2010 
installed capacity of renewable energy sources by 2030, which implies an increase from 5,438 MW 
in 2010 to 15,304 MW in 2030. ”  
Questions:  
10. According to the NREP, will the government subsidize on -grid prices? How much subsidy will 
be provided?  
 WT/TPR/M/3 68/Add.1  
 
- 29 - 
 
  Response : 
 
The government will not subsidize on -grid price s. The RE developers who are entitled to 
the Feed -in-Tariff (FIT) rate will be paid in accordance with the FIT guidelines 
promulgated by the Energy Regulatory Commission and paid out of the FIT Allowance 
Fund that will be charged to the consumers.  
 
11. Wha t sizes of projects will new installed capacity be mainly used in? What is the estimated 
number of components to be imported?  
 
Response : 
The sizes of the projects vary depending on the energy resource, i.e. biomass, 
hydropower, solar and wind, and the loca tion. These can be less than 1 MW to 150 MW 
plants and supplied to the grid with priority dispatch. As to the components to be 
imported, there are no foreseen new importations as the FIT rate system already 
expired last December 2017.  
Page 68, Para 4.40  
 
“According to the authorities, the Philippine National Oil Company (PNOC), a government -owned -
and-controlled oil company, does not have special privileges with regard to the PECRs. During the 
process of a PECR for petroleum, PNOC Exploration Corporation (PN OC-EC) is given the option to 
farm out up to a 10% participating interest in the contract; the authorities noted that participation 
is entirely on a commercial basis.”  
 
Questions:  
12. How to ensure that government -owned companies do not have privileges? Ar e there any legal 
and policy measures?  
 
13. The 10% requirement is not consistent with “entirely on a commercial basis” following it. 
Please explain.  
 
Response : 
For the Philippine Energy Contracting Round (PECR5), the Philippines, through the 
Department of  Energy (DOE), issued Department Circular (DC) No. DC2014 -02-0005 
Reiterating a Transparent and Competitive System of Awarding Service and Operating 
Contracts for Petroleum and Coal Prospective Areas, repealing previous Department 
Circulars for PECRs.  
Unde r Section 6 of the DC2014 -02-0005, an option for Philippine National Oil Company 
Exploration Corporation (PNOC -EC) to participate in Petroleum Service Contracts is 
provided.  
Section 6 of the DC reads as follow, “For petroleum service contracts proposed und er 
this Circular, an option shall be reserved for the PNOC -EC for a maximum of ten percent 
(10%) participating interest in a proposed service contract involving one (1) or more 
Filipino participant or maximum of fifteen percent (15%) participating interest  in a 
proposed service contract involving no Filipino participant.  DOE shall inform PNOC -EC 
within thirty (30) days from the award of the service contract, and, PNOC -EC shall give 
proper notice, within thirty (30) days from receipt thereof, to the winning  applicant and 
the DOE whether it shall exercise said option.  All rights, privileges, benefits, costs, 
expenses, obligations and liabilities of PNOC -EC shall be in proportion to its participating 
interest in the proposed service contract.”  
Part II. Questions based on Report by The Philippines (WT/TPR/G/367)  
 
Page 5, Para 2.2  
 
“Furthermore, the Philippine Development Plan espouses a national spatial strategy that describes 
the geographic development challenges and opportunities in population and economic growth. The 
national spatial strategy provides the basis for policies on ur ban development, infrastructure 
development, disaster mitigation, and environmental resource protection and conservation. It WT/TPR/M/3 68/Add.1  
 
- 30 - 
 
  recommends sustainable human settlements, efficient production, and effective service delivery 
systems.”  
 
Question:  
14. Under the n ational spatial strategy, what measures has the Philippines taken and what are the 
planned measures in land policies to ensure the implementation of the strategy?  
 
Response : 
 
The National Spatial Strategy (NSS) serves as the guiding framework to guide 
deve lopment planning in the country through three (3) core strategies: (a) regional 
agglomeration by steering growth in key centers, (b) connectivity, and (c) reduction of 
vulnerability.  
 
To maximize the benefits of agglomeration and scale economies, the NSS identifies a 
network of settlements that shall: (a) guide long -term planning at the national and 
sub-national level; (b) give a scenario where the major centers will be, and their 
possible roles and functions; and (c) provide basis for planning for infrast ructure and 
other services.   
 
At the national level, the NSS guided the formulation of strategies across the various 
chapters of the Philippine Development Plan, namely, Accelerating Infrastructure 
Development (Chapter 19), Building Safe and Secure Commun ities (Chapter 12), and 
Reducing Vulnerability of Individuals and Families (Chapter 11). These strategies 
include the following:  
 
 Enhancing the efficiency of the transport sector to sustain economic growth and 
increase competitiveness . Regional centers identified in the NSS will be 
supported with transport infrastructure and services in accordance with land use 
and urban planning methodologies (e.g., transit -oriented development, township 
approach, high density residential development) and other sustaina ble 
construction technologies that have been proven effective in livable cities.  
 
The NEDA Board confirmed on 27 June 2017 a National Transport Policy (NTP). 
Among the policy areas of the NTP are: (a) transportation management in urban 
and rural areas thro ugh the development and alignment of local transport and 
traffic management plans with the area’s land use plan; and (b) support to other 
economic sectors by establishing seamless, intermodal tourism, agro -industry 
and trade, and logistics transport networ k through Convergence Programs.  
 
 Developing integrated neighborhoods and sustainable communities particularly 
for low -income households. This entails ensuring that housing and auxiliary 
services and needs of resettled Informal Settler Families are adequately satisfied. 
The physical infrastructure of housing and location of human settlements must 
also ensure compliance with disaster risk reduction and management (DRRM) 
and climate change adaptation (CCA) requirements to mitigate risks and address 
vulnerability.  
 
 Roll out climate and disaster vulnerability and risk assessment nationwide. To 
mainstream DRR/CCA, the Climate Change Commission will craft an enabling 
policy and provide assistance to local communities in conducting vulnerability 
and risk ass essment.  
 
At the subnational level, the NSS guided the formulation of Area Spatial Development 
Frameworks (ASDF) for Luzon, Visayas and Mindanao. These ASDFs aim to harmonize 
and strengthen socioeconomic and physical linkages between and among regions and 
provinces and contain core programs, projects and activities. These ASDFs also guided 
the formulation of the Regional Development Plans.  
 
The NSS also served as guide for the Public Investment Program 2017 -2022, particularly 
for infrastructure projects, w hich are being directed to address challenges in facilitating 
agglomeration and mobility and ensuring safety and resilience.  In particular, to achieve WT/TPR/M/3 68/Add.1  
 
- 31 - 
 
  spatial efficiency and connectivity, the government has embarked on a massive 
infrastructure program, th e “Build, Build, Build Program” (BBB), which aims to (a) 
improve regional connectivity, (b) lower cost of doing business thereby increasing the 
Philippines’ growth potential and competitiveness, and (c) link production areas to 
growth centers through an ef ficient transportation network.  
 
Page 8, Para 2.23  
 
“The Bangko Sentral ng Pilipinas (BSP; Central Bank of the Philippines) declared microfinance as 
its flagship programme for poverty alleviation in the year 2000. Since then, it has been proactive 
in the d evelopment of microfinance in the banking system in terms of: (a) policy and regulatory 
environment; (b) training and capacity building within the BSP and the banking sector; and (c) 
promotion and advocacy. As a result, microfinance has become fully mainst reamed in the banking 
sector and more innovative products have been developed by the market to respond to the 
demand for a wider range of products beyond microcredit. These include micro -agri loans (Circular 
748), housing microfinance (Circular 678), micro -deposit (Circular 694), and microinsurance 
(Circular 683). In 2016, there were 168 banks with microfinance operation serving 1.7 million 
clients with outstanding microfinance loans amounting to PHP 13.7 billion.”  
 
Question:  
15. Please explain the role of microfinance on the development of micro and small enterprises.  
 
Response : 
 
In terms of microfinance and financial inclusion, the BSP has played a key role since 
2000 in increasing access to financial services to the poor and low income population by 
mainstreaming microfinance in the banking sector. In 2007, it progressed the advocacy 
from microfinance to financial inclusion. The BSP was among the first central banks to 
create a unit dedicated to promoting financial inclusion.  
 
The BSP recognizes finan cial inclusion as a worthy policy objective that can be pursued 
as a complement to the three pillars of central banking (price stability, financial 
stability, and efficient payments and settlements system). In this regard, the BSP has 
taken deliberate meas ures in promoting financial inclusion through: (1) policy and 
regulation; (2) financial education and consumer protection; (3) advocacy programs; 
and (4) data and measurement.  
 
The general approach is to establish a supportive regulatory environment that e nables 
market -based solutions to thrive. Useful innovations need not be stifled but instead be 
allowed to operate in an environment where the risks associated with such innovations 
are adequately understood and addressed, and where there is proportionate a pplication 
of sound principles.  
 
The Philippines’ regulations allow for (1) wider range  of financial products; 
(2) expanded physical and virtual reach of financial services; (3) liberalized on -boarding 
of customers; and (4) protection of the financial cons umers.  
 
Building on these gains, the BSP continues to create an enabling regulatory environment 
for financial inclusion. This time, it is setting its sights on digital innovations as catalyst 
and strategic enabler for financial inclusion.  
 
Digital technology can significantly reduce transaction costs and expand reach – making 
it possible and even compelling for banks and other financial institutions to serve the 
hugely untapped low -income market.  
 
The goal is to develop a digital finance ecosystem t hat supports the diverse needs of all 
users in a manner that is secure, sustainable, convenient, and affordable. For the service 
providers - whether new or incumbent, this ecosystem enables them to tap into a wider 
client base, diversify revenue sources, a nd secure new growth opportunities.  
 
The initiatives hope to address a key challenge that the Philippines is facing which is 
adoption/ actual increase in the number of included people. While the Philippines has WT/TPR/M/3 68/Add.1  
 
- 32 - 
 
  been lauded for the policy and regulatory ap proach in microfinance and financial 
inclusion, only over 30% of the population have access to an account.  
 
Page 10, Para 2.34  
 
“With a supportive market environment in the background, domestic producers could thrive, find 
their niche, and take advantage of scale and scope economies in the global value chain. In the 
Philippines, as of 2015, MSMEs accounted for 61.6% of total employment generated and 
approximately 35% of GDP. Their progress will directly contribute to the attainment of inclusive 
growth. Wit h this in mind, the Philippines continues to push the MSME agenda and seeks to 
address key challenges in their development and search for prosperity.”  
 
Question:  
16. Please describe in detail the efforts to push the MSME agenda.  
 
Response : 
 
The development  of MSMEs is one of the priority areas in terms of Philippine 
engagements in APEC and ASEAN to promote sustainable and inclusive growth.  
 
In 2015 during its Philippine Chairmanship, APEC adopted to the Boracay Action Agenda 
to Globalize MSMEs  and the Iloilo Initiative for Growing Global MSMEs as a practical and 
workable plan for MSME development and internationalization. The action agenda 
identifies priority actions on trade facilitation, e -commerce, financing, institutional 
support and women entrepreneursh ip which will lead to more global MSMEs.  
 
During its 2017 ASEAN Chairmanship, the Philippines further pursued the MSME agenda.  
ASEAN adopted the  ASEAN Inclusive Business Framework (AIBF) aimed at providing a 
platform for MSMEs to be integrated in the regi onal and global value chains by 
establishing strong linkage and cooperation between big and small enterprises. By 
engaging low -income communities as partners, customers, suppliers or employees in 
value chains, inclusive business (IB) models can transform c ommunities into new 
markets and new sources of entrepreneurial talent. IBs go beyond philanthropy and 
invest in addressing the problems of the poor because it makes good business sense, 
according to him.  
 
The Focused and Strategic (FAST) Action Agenda on I nvestment  adopted by ASEAN 
Economic Ministers at the AEM Retreat in March 2017 is also an initiative of the 
Philippines and one of the key deliverables for its ASEAN2017 chairmanship, which is 
seen to further push greater linkage of the regional trade bloc ’s MSMEs with ASEAN and 
global MNEs.   
 
In line with socio -economic agenda of the administration to promote rural and value 
chain development toward increasing agricultural and rural enterprise productivity and 
rural tourism, the Philippines continues to pr omote IB especially in the sectors of 
agribusiness and tourism. This is complemented by the inclusion of IB in the ‎2017 -2019 
Board of Investments Investment Priorities Plan, which provides fiscal incentives to IB 
projects in agribusiness and tourism.  
 
Page 16, Para 4.1  
 
- Enabling and supportive economic environment. Inclusive growth will be achieved with an 
enabling and supportive economic environment. Macroeconomic stability will be maintained; fiscal 
prudence will be observed; strategic trade policy will be implemented. Policies, laws and 
regulations will be reviewed and measures will be undertaken to enhance market competition.  
 
- Foundations for sustainable development. All of these will be underpinned by ensuring national 
security against internal  and external threats. At the same time, territorial integrity and 
sovereignty will be upheld and protected. The next six years will be characterized as the “golden 
age of infrastructure” in the Philippines. An important partner of development is the envir onment 
and natural resources sector, and maintaining its integrity is crucial for the long term.  
 WT/TPR/M/3 68/Add.1  
 
- 33 - 
 
  Questions:  
17. What measures will be taken in the strategic trade policy to be implemented with respect to 
trade in mineral resources?  
 
Response : 
 
In general,  the Philippines will focus on providing support and in promoting products 
where the country has comparative advantage and has the potential for competitive 
advantage. External trade policy will support backward and forward linkages to both the 
domestic an d international markets, spur the production of higher value added goods 
and services, diversify products and markets, as well as provide opportunities for 
growth of enterprises.  
 
To ensure strategic trading of the country’s mineral resources, the Departme nt of 
Environment and Natural Resources enforces the following measures and policies:  
 
 Only those individuals and corporations accredited by the Department and 
registered with the Department of Trade and Industry can engage in the trading 
of mineral produ cts either locally or internationally (Sec. 54, RA 7942). This 
policy is in line with the Government’s responsibility to have full control of the 
rational exploration, development, utilization, conservation and disposition of the 
country’s mineral resource s.  
 
 Starting July 6, 2012, all valuable metals in abandoned ores and mine wastes 
and/or mill tailing generated by previous mining operations now belong to the 
State and shall be developed and utilized through competitive public bidding 
(Sec. 7, EO 79). Th is results to broader participation of financially qualified 
individuals and corporations providing more revenues for the government and 
benefitting the people and the country as a whole.  
 
 The excise tax on mineral products was increased from 2% to 4% pur suant to 
Section 244 in relation to Section 245 of the National Internal Revenue Code 
(NIRC) , as amended, and Section 85 of RA 10960 (TRAIN Act). Increased 
collection from the excise tax of mineral products redounds to an improved and 
better provision of basic services. The application procedures for   mineral 
agreements was streamlined by creating a One -Stop Shop for all Mining 
Applications and Procedures.  This simplified the whole process to encourage 
investments in the extractive industry.  
 
 There are plans to implement a unified information, education and 
communication (IEC) policy to boost investments in the mining sector.  This also 
involves a campaign to inform and educate the public about the processes 
involved in the extraction, disposition, utili zation and trading of mineral 
resources extracted from mining operations in the countryside and communicate 
how the mining industry provides economic benefits to the people.  
 
Value -adding activities and the development of downstream industries for the mineral 
sector will be pursued by the Department of Environment and Natural Resources in 
coordination with the Department of Trade and Industry, the Department of Science and 
Technology, the National Economic and Development Authority and other government 
agencies concerned.  These plans will become part o f the national program and 
road-map based on the Philippine Development Plan and National Industrialization Plan . 
 
18. What measures will be mainly taken by the Philippines to maintain the integrity of the  
environment and natural resources sector?  
 
Response : 
 
Aside from securing an Environmental Clearance Certificate (ECC), contractors and other 
mining permit holders are required to submit an Environmental Protection and 
Enhancement Program (EPEP) and Envir onmental Work Program (EWP). The EPEP and 
the EWP are comprehensive and strategic environmental management plans which aim WT/TPR/M/3 68/Add.1  
 
- 34 - 
 
  to protect and rehabilitate the disturbed environment caused by the mining project.  
 
Contractors and Permit Holders/Lessees are also required to prepare a Social 
Development and Management Plan (SDMP) and Community Development Plan (CDP) to 
enhance the development of the host and neighboring communities . 
 
Consistent with the policy of full public disclosure of all transactions involving  public 
interest, mining companies are now mandated to participate in the Extractive Industries 
Transparency Initiative (EITI).  
 
Environmental standards, as prescribed by various mining and environmental laws, rules 
and regulations are fully enforced and strictly implemented. Sanctions will be imposed 
against violators.   
DOMINICAN REPUBLIC  
QUESTIONS:  
 
SUMMARY  
 
Page 7, Paragraph 12   
 
"Most imports, like domestically produced goods, are subject to value -added tax which has a 
standard rate of 12%. Food products and agricultural inputs are exempt from VAT. Excise taxes 
are levied on alcoholic beverages, tobacco products, automobiles, petro leum products, minerals, 
perfumes and jewellery. A vast range of goods are subject to licences or permits when imported. 
For certain products, multiple permits or licences are required, and informal payments have been 
reported by the business community. " 
 
1. What kind of measures does the Philippines implement against the bad practice of 
informal payments?  
 
Response : 
 
Strategies to reduce corruption are outlined in the Philippine Development Plan 2017 -
2022 and includes streamlining government transactions, mod ernizing regulatory 
processes, and establishing mechanisms for citizens to report complaints. In 2016, 
Executive Order No. 6 established a “citizens’ complaint hotline” and “complaint center” 
for the public to directly report corruption in government agenc ies.  The Office of the 
President oversees the center, which can be reached by the hotline, text services (SMS) 
and social media.  
 
Page 26, Paragraph 2.24  
 
"Furthermore, during the review period, the APEC Trade Repository, an online portal on APEC 
economies' trade and tariff information, was developed by the DTI2, while the APEC Services 
Cooperation Framework provides long -term guidance on APEC's work on services.3 The Services 
Competitiveness Roadmap was adopted in 2016, which contains a concerted set of actions and 
mutually agreed targets to be achieved by 2025. " 
 
2. Can the Philippine authorities list some of the agreed measures referred to in paragraph 2.24?  
 
Response:  
 
The APEC Trade Repository (APECTR; accessible via http://tr.apec.org) begun a s a 
Philippine -led initiative and was launched by APEC in 2015 during the Philippine 
Chairmanship. The APECTR serves as a single online reference point on APEC member 
                                                
 2 2015 APEC Ministerial Meeting (AMM) Statement. Viewed at: http://www.apec.org/Meeting -
Papers/Leaders -Declarations/2015/2015_aelm/2015_Annex% 20B. 
 3 2015 AELM Statement Annex B. Viewed at: http://www.apec.org/Meeting -Papers/Leaders -
Declarations/2015/2015_aelm/2015_Annex%20B . WT/TPR/M/3 68/Add.1  
 
- 35 - 
 
  economies' trade and tariff regimes with the objective of further promoting APEC's work 
on transparency, connectivity and trade facilitation. It aims to provide information on 
regional and APEC economies’ domestic stakeholders with trade and tariff information 
related to navigating cross -border trade.  
 
Updates are managed annually by the APEC Market Access Group (MAG) using a 
reporting template to be completed every September. Links and websites are provided 
on MFN and preferential tariff rates, rules of origin, trade and customs laws and 
procedures, amo ng others.  
 
With respect to the APEC Services Competitiveness Roadmap (ASCR) 2016 -2025, APEC 
members adopted concerted set of actions and mutually agreed targets that will 
facilitate services trade and investment and to enhance the competitiveness of the 
services sector in the region by 2025. The following targets were agreed:  
 
a) Progressively reducing restrictions to services trade and investment;  
b) Increasing the share (%) of services exports from APEC economies in the total 
world services exports; and  
c) Increasing trade in services in the APEC region so that the compound average 
annual growth rate exceeds the historic average of 6.8 percent and the share 
(%) of value -added of the services sector in the total GDP of the APEC region 
exceeds the global avera ge level by 2025.  
 
Implementation of the ASCR will be guided by the following enabling factors:  
 
a) Promoting good regulatory practices, international regulatory cooperation and 
sound competition policy frameworks and institutions;  
b) Ensuring openness of servic es markets by extending APEC’s overall standstill 
commitment and rolling back protectionist and trade distorting measures on 
trade in services;  
c) Ensuring an adequate supply of skills in a rapidly changing economy, helping 
workers adjust to change and provid ing for increased participation in the 
workforce by such groups as women, youth, Micro Small and Medium Enterprises 
(MSMEs) and indigenous businesses;  
d) Fostering dynamic, competitive and effective telecommunications, innovation and 
information and communication technologies (ICT) policies;  
e) Facilitating effective financial markets, including through the use of new 
technologies to promote greater inclusion in financial markets; and  
f) Improving people -to-people, physical and institutional connectivity.  
 
 
Page 45, Paragraph 3.58  
 
"Guarantees cover up to 90% of the approved loan. Applicants must pay an application fee of PHP 
100,000 plus Gross Receipts Tax (GRT), a processing fee of 0.125% plus GRT, and a guarantee fee 
of up to 2.5% plus GRT of the guarante ed amount. Any company registered in the Philippines is 
eligible for the programme. A special guarantee program also exists for SMEs, with slightly 
different conditions and a maximum guaranteed loan amount of PHP 20 million. ” 
 
3.  Could you expand the information on the conditions applied to the guarantees for SMEs in 
the Special Economic Zones?  
 
Response : 
 
The Philippines, through the Philippine Export Zone Authority (PEZA), does not provide 
guarantees to SMEs inside the ecozones.  SMEs in ecozones may seek guarantee cover in 
the same manner as other SMEs outside the ecozones.  
 WT/TPR/M/3 68/Add.1  
 
- 36 - 
 
  Page 55, Paragraph 3.117  
 
"The Philippine International Trading Corporation (PITC) administers the Philippines' Countertrade 
Programme. Countertrade is mostly used as supplemental tool in connection with public 
procurement. Total completed countertrade transactions amounted to some US$14.5 million in 
2016; most deals were carried out for the Philippines' armed forces. " 
 
4.  Could you explain in more detai l what the Countertrade Programme  consists of?  
 
Response : 
 
The Countertrade Program of the Philippines is implemented pursuant to Executive 
Order No. 120 and its Implementing Rules and Regulations (IRR).  It directs the national 
government, its departments , bureaus, agencies and offices including government -
owned or controlled corporations to adopt countertrade as a supplemental trade tool 
with respect to the importation or procurement of foreign capital equipment, machinery, 
products, goods and services en tailing the payment of at least USD 1 million  and above 
or its equivalent in other foreign currency and to negotiate and conclude, on best effort 
basis, agreements or arrangements on countertrade with respect to such importation.  
 
More details on procedur es and guidelines can be accessed from this link:  
www.pitc.gov.ph/index.php/countertrade.  
 
The Philippine International Trading Corporation is responsible for implementing and 
monitoring the countertrade policy.  
 
Page 71, Paragraph 4.68  
 
"A common difficu lty faced by the manufacturing sector is the high production costs caused by 
inadequate infrastructure. These costs have to do with the transport network (that is, insufficient 
connections by land, sea and air) and the electricity sector (due to lack of ca pacity and high 
prices). The authorities indicate that a series of measures have been taken to address the 
concerns of the business community regarding infrastructure, including transportation and 
electricity. For example, the Department of Trade and Industry (DTI) and the Department of Public 
Works and Highways (DPWH) launched the DTI -DPWH Convergence Roads Leveraging Linkages for 
Industry and Trade  (ROLL IT) Programme in 2016, in order to develop projects for infrastructures 
that connect the main man ufacturing and economic zones of the country; in November 2017 there 
were 229 road project proposals throughout the country. "  
 
5. Could you mention other measures applied or designed to improve the infrastructure?  
 
Response : 
 
The government has initiated measures to ensure the strategic and timely 
implementation of infrastructure projects in the pipeline to achieve maximum gains for 
the economy. These include, among others, the following:  
 
 NEDA Board Approval of the Adoption o f the 75 Infrastructure Flagship Projects 
(IFPs) and Creation of a Project Facilitation, Monitoring and Innovation (PFMI) 
Task Force.  The 75 IFPs represent the major capital undertakings that are 
envisaged to promote growth centers outside the urban -indust rial region 
centered around Metro Manila.  To closely monitor the progress and address 
operational/implementation issues of these flagship projects, the NEDA Board 
approved the creation of the PFMI Task Force. Specifically, the Task Force shall 
undertake t he following functions :  
 
a) Recommend government -wide operational measures in resolving 
development and implementation issues, risks and bottlenecks on the IFPs;  
 
b) Institute coordination mechanisms between oversight and implementing 
agencies to facilitate the  above function; and  WT/TPR/M/3 68/Add.1  
 
- 37 - 
 
   
c) Facilitate the deployment of resources, through the national government (NG) 
budget, official development assistance (ODA), and other sources to oversight 
and implementing agencies towards fast -tracking development and 
implementation of the IFPs.  
 
 Creation of the Infrastructure Cluster under the Government Cabinet Cluster 
System.  The Infrastructure Cluster was created pursuant to Executive Order (EO) 
No. 24 s. 2017 to focus on infrastructure development for the realization of the 
10-Point Socioeconomic Agenda. In terms of monitoring, the Cluster will focus on 
the operationalization and performance tracking. Noting that the PFMI Task 
Force was also created to monitor project milestones specifically for the 75 IFPs, 
the Cluster can direc t and channel its attention to the cross -cutting or 
overarching operational and implementation issues or to specifically monitor the 
other major capital projects or Core Investment Programs and Projects (CIPs) 
that are non -IFPs.   
 
 Approval of Project Prep aration Facilities to support the development of strategic 
development programs/activities/projects (PAPs).  These include the Project 
Development and Other Related Studies (PDRS) Fund amounting to PhP1.595 
billion to be administered by NEDA for 2018; and t he Infrastructure Preparation 
and Innovation Facility (IPIF) amounting to PhP7.92 billion to be financed 
through a loan from the Asian Development Bank (ADB), with the Department of 
Finance (DOF) as executing agency. Both facilities intend to deliver more 
effective and innovative infrastructure projects through the conduct of pre -
investment studies/activities that will help accelerate the approval process and 
ensure timely implementation of infrastructure projects.  
 
 Adoption of the National Transport Policy  (NTP) and Formulation of the Philippine 
Transport Systems Master Plan (PTSMP).   The NTP was approved/adopted by the 
NEDA Board on 12 September 2017 to serve as the guiding policy for 
transportation development, management, operations, and use and covers a ll 
elements of the transport system and its sub -sectors.  It is intended to facilitate 
the realization of the Transport Vision of a safe, secure, reliable, efficient, 
integrated, intermodal, affordable, cost -effective, environmentally sustainable, 
and peop le-oriented national transport system that ensures improved quality of 
life of the people.  In accordance with the NTP, the PTSMP is currently being 
undertaken and targeted for completion by the end of the year, with the intention 
to guide the rational dev elopment of an intermodal transport network in the 
country through coordinated planning and operation of projects and programs as 
an integrated network of intermodal sub -systems.  
 
 Reforms in the Energy Sector and Electrification Policies.  Several policies,  rules 
and regulations that support the government’s thrust to increase investments in 
the energy sector were put in place, among others:  
 
a) EO 30 creating the Energy Investment Coordinating Council (EICC) was 
signed in 28 June 2017 which will streamline th e regulatory processes and 
fast-track the implementation of major energy projects for power generation, 
transmission and ancillary services needed to sustain grid stability and 
security. The EO further requires government agencies receiving applications 
for permits of energy projects to process the same without awaiting the 
action of other government agencies within a 30 -day period;  
 
b) Department Order (DO) No. 2017 -04-0005 – Prescribing the New Guidelines 
in the Processing of Applications for Renewable Energ y (RE) 
Service/Operating Contacts which provides the procedural flow of evaluation 
of RE applications on a faster period;  WT/TPR/M/3 68/Add.1  
 
- 38 - 
 
   
c) Department Circular No. 2017 -05-0008 which provides the policies and 
guidelines of Performance Assessment and Audit for all power generation, 
transmission and distribution systems, and facilities that will be instrumental 
in the attainment of secure, reliable and affordable supply of electric power to 
support the economic growth of the country; and  
 
 Department Circular No. 2017 -11-0012 or the Philippine Natural Gas Regulation 
(PNGR) which will standardize the guidelines in the accreditation, operation and 
maintenance of natural gas infrastructures and facilities, including the supply 
importation and transportation.  The PNGR aims to, among others, liberalize 
entry of investors/participants to the natural gas market and ensure adherence 
to international and Philippine health, safety, security and environment 
standards.  
EL SALVADOR  
 
1. In the Secretariat report we notice a reduction in the participation of the agricultural sector, 
both in terms of GDP and employment. In 2011 it represented 15,4% of GDP, and this figure 
dropped to 11,8 in 2016, while in the case of employment the figures fell from 33% to 27% in the 
referred period. Could Phil ippines please comment on the causes behind this decline?  
 
Response : 
 
It did not drop in nominal terms. Please refer to the actual GDP figures in the Secretariat 
Report.  
 
2. It is important to note, the strong influx of Foreign Direct Investment registered in 
Philippines, during the year 2016 (7.900 million US Dollars). Could Philippines please comment on 
the causes behind this increase and how they are planning to maintain an d promote the growth of 
the current levels of FDI?    
 
Response : 
 
For the past years, the Philippines is one of the fastest growing economies in Asia, 
outpacing the country’s Southeast Asian neighbors. In 2017, the Philippines recorded a 
new all -time high FDI flows at US$10 Billion, which 21.4% higher than in 2016. This 
remarkable economic performance can be attributed mainly, to: (1) the country’s 
growing population with strong consumer demand; (2) a stable pool of highly skilled 
labor force; (3) implement ation of various programs and initiatives to facilitate doing 
business in the country; and (4) the introduction of a new industrial policy, which 
focuses on inclusive innovation and resurgence of the manufacturing sector towards 
Industry 4.0.  
 
To sustain this growth, the government has passed laws amending country’s taxation 
scheme and expanding the Anti -Red Tape Act (ARTA) of 2007. The government is 
likewise implementing the Build Build Build Program is aimed at accelerating 
infrastructure development to enhance economic activities and further attract more 
FDIs.  
 
Also, the Philippines continues to be aggressive in entering into free trade agreements 
(FTAs) with strategic partners to expand markets and forge industrial cooperation for 
mutual benefit. Recently, the Philippine Senate ratified the Philippines -European Free 
Trade Association Free Trade (PH -EFTA) Agreement. Negotiations on the Regional 
Comprehensive Economic Partnership (RCEP) are ongoing.  
 
  WT/TPR/M/3 68/Add.1  
 
- 39 - 
 
  EUROPEAN UNION  
WT/TPR/S/368 – WTO Secretariat's Report  
 
1. ECONOMIC ENVIRONMENT  
 
1.2.2. Fiscal policy and structural reforms,  
 
Paragraphs 1.7, 1.12 and 1.15 page 12 (and also Government report Paragraphs 2.2, 
2.4, 2.5 and 2.10)  
 
According to the report, p ersistently low investment has been reflected in the quality of 
infrastructure, particularly the inter -island connectivity bottleneck. The EU values the Philippines' 
ambition to increase expenditures for infrastructure to at least 7.4% of GDP over the medi um term 
(railways, urban mass transport, roads, ports etc.).  
 
EU question No 1:  Could the Philippines provide further information about how it intends to carry 
out these major projects? C ould The Philippines present concrete examples of investments done in 
the transport infrastructures carried out since last review? Could also the Philippines clarify what 
measures have been taken to favour digital infrastructures?  
 
Response : 
 
The government will implement several infrastructure projects either through var ious 
modes under the Public Private Partnership (PPP) Program, joint ventures or private 
sector undertaking, or government undertaking. Under the PPP Program, several 
transport and transport -related projects like the rehabilitation of MRT 3, construction o f 
MRT 7, toll roads and expressways, and airports, among others, have been bidded out 
and awarded to the private sector under concession agreements. Some water treatment 
and distribution projects in different areas of the country as well as seaports are bu ilt 
with private sector investments. For the road networks, especially those that links 
tourism destinations and industrial areas to national roads, ports and airports are 
undertaken by government through the Department of Public Works and Highways 
(DPWH).   
 
In terms of digital infrastructure, the government is encouraging new investments in 
the telecommunications sector.  To pave the way for the entry of the third player in the 
telecommunications industry which has long been held by two incumbents, the 
Department of Information and Communications Technology issued in January 2018 
Memorandum Order 001 on the guidelines on the qualifications and criteria for the 
selection of a new major player in the telecommunications industry. Recently, a new 
player with Ja panese equity has entered the Philippine market to provide last mile 
connectivity.  
 
Aside from the hard infrastructure, the Philippines is addressing the soft infrastructure 
issues to advance business competitiveness and productivity in the digital economy. A 
number of laws were passed and policies adopted, including among others, the Data 
Privacy Act of 2012; the creation of the Department of Information and Communications 
Technology in 2016; the creation of the National Privacy Commission in 2016; 
formulation of the e -Government Masterplan 2016 -2022; formulation of the Philippine 
ICT Roadmap; formulation of the Roadmap for Digital Startup 2015 and Beyond.  
 
2. TRADE AND INVESTMENT REGIMES  
 
2.4 Investment Regime  
 
Paragraph 2.28, page 27  
 
Since the last review, the Philippines has removed some foreign ownership restrictions in certain 
sectors like in the professional and banking services. Nevertheless, there are still a number of 
activities in the Foreign Investment Negative List which are not fully open to foreign participation 
(telecommunication, water, electricity, media, agriculture). According to PH Memorandum Order WT/TPR/M/3 68/Add.1  
 
- 40 - 
 
  No. 16 by the President of the Philippines signed on 21 November 2017, the 'National Economic 
and Development Authority (N EDA) Board and its member agencies are directed to exert utmost 
efforts to lift or ease restrictions on certain investment areas or activities with limited foreign 
participation, including in 8 sectors such as private recruitment, particular professions; c ontracts 
for construction, public services; culture, teaching, retail trade and domestic market enterprises.  
 
EU question No 2:  Could the Philippines provide further details on its plans to revise the maximum 
limit for foreigner ownership listed in the Foreign Investment Negative List? Given the need for 
especially renewable energy production, is the Philippines considering the easing of foreign 
ownership restrictions in this specific sector?   
 
Response : 
 
The President provided guidance via Memorandum Ord er No. 16, s. 2017, on the priority 
investment areas or activities where current equity restrictions will be reviewed. The 
list, however, does not include renewable energy production. The foreign equity 
restriction in this sector is based on the Constituti onal limitation on the exploration, 
development, and utilization of natural resources.  
 
At present, there is an ongoing review of the 1987 Constitution by a 25 -member 
Consultative Committee created by the President through Executive Order No. 10. The 
Comm ittee is expected to complete its review in six months or until June this year. It 
will submit its recommendations and proposals to the President, who will transmit these 
to Congress.  
 
Paragraph 2.30, page 27  
 
Reference is made to the restrictions to foreign ownership in the public utilities, telecommunication 
and agriculture. The Congress adopted House Bill 5828 in 2017, amending the Public Services Act 
which will provide a more precise definition of what constitute a public utility and should allow f or 
greater foreign participation in sectors such as transport and telecommunication; electricity 
distribution and transmission; water pipeline and sewerage pipeline distribution . 
 
EU question  No 3: What are the Philippines' plans regarding the current rest riction on foreign 
ownership in areas such as public utilities (notably telecommunications) and agriculture?  Does the 
Philippines know if and when the Senate could adopt the Bill?   
 
Response : 
 
Senate Hearings are being conducted on the proposed bills to amend the Public Service 
Act. These hearings are being conducted by the Senate Committee on Public Services 
jointly with the Committees on Finance and Economic Affairs. The proposed 
amendments to  the Public Service Act aim to remove the transport and 
telecommunications sector from the definition of “public utility” to address the debate 
that although these sectors are public services, they are not necessarily public utilities. 
Public utilities are  a subset of public services.  By addressing this issue, the plan is to 
remove the said sectors from the coverage of the foreign equity limit of 40%, as 
provided under Article XII of the Philippine Constitution.  
 
There is no exact time frame on when the S enate Bill amending the Public Service Act 
will be approved.  
 
Note that the version of the bill by the House of Representatives was approved in 
September 2017.  
 
Paragraph 2.32, page 28  
 
According to the report, the National Competitiveness Council has work ed on further improving 
business processes through various initiatives. One initiative is the Expanded Anti -Red Tape Act of 
2017 (HB 6579; SB 1311) allowing faster and fewer licensing.  
 WT/TPR/M/3 68/Add.1  
 
- 41 - 
 
  EU question  No 4: Could the Philippines give an update on the status of this law in Congress and 
its impact on Ease of Doing Business?  
 
Response : 
 
To date, the bill has been approved by both Houses of Congress and is now awaiting the 
President’s approval and signature. The law is expected to improve the Philippines’ 
competitiveness rankings in the World Bank’s Doing Business report and provide for the 
efficient and effective delivery of public services.  
 
Paragraph 2.34, page 29  
 
Double taxation agreements are international treaties and so, are of direct application an d prevail 
over local laws. In the Philippines the favorable conditions of the agreements (for example, 
reduced withholding rates) do not apply automatically, but have to be previously requested and 
authorized by the local tax agency (BIR), following an ext remely cumbersome procedure.  
EU question No 5 : Is the Philippines planning to foster the automatic application of these Double 
Taxation Agreements by eliminating the authorization requirement?  
 
Response : 
 
Under Revenue Memorandum Order (RMO) 8 -2017, non-residents can already utilize the 
reduced withholding rates on dividends, interest and royalties provided they submit a 
duly accomplished Certificate of Residence for Tax Treaty (CORTT) Form to the 
withholding agent prior to the remittance of the incom e.  The CORTT Form and/or the 
usual certificate of residence issued by the tax authority of the income recipient is 
sufficient for the automatic and immediate withholding of the reduced rates on those 
incomes subject to post -compliance check by the Interna tional Tax Affairs Division.  The 
RMO is uploaded in the BIR website.  After remitting the income net of the reduced tax, 
the nonresident (or its authorized representative) shall submit the CORTT Form to ITAD 
for recording and future compliance check.  
  
For other types of treaty income such as business profits or capital gains, the BIR issues 
rulings or certificates for this purpose.  
 
2.3.2 Regional and preferential agreements  
 
2.3.2.1 ASEAN  
 
Paragraph 2.14, page 24  
 
Reference is done to the negotiations o f the Regional Comprehensive Economic Partnership (RCEP) 
Agreement between ASEAN and its FTA partners launched in 2012.  
 
EU question No 6 : Could the Philippines present its priorities with regards to its trade negotiations 
agenda, both regional and bilater al, for the future?  
 
Response : 
 
The Philippines’ trade negotiations agenda is aligned with the 0 to 10 -Point 
Socio -Economic Agenda and the Philippine Development Plan 2017 – 2022, which 
incorporates as an important economic strategy enhanced participation  in international 
trade through effective bilateral, multilateral, and regional engagements and 
representation.  
 
On the bilateral front, the Philippines seeks to explore intensified linkages with 
non-traditional partners in line with the country’s independ ent foreign policy while at 
the same time maintaining and further strengthening relations with our biggest trading 
partners. The Philippines will also continue to improve economic relations via bilateral 
preferential schemes (FTAs and non -reciprocal arrang ements such as GSP schemes).  
 WT/TPR/M/3 68/Add.1  
 
- 42 - 
 
  The Philippines has ongoing talks with Japan for the General Review the 
Philippines -Japan Economic Partnership Agreement (PJEPA). The Philippines will 
continue to pursue the actualization of the Europe strategy through the ra tification of 
the PH -EFTA FTA and continued engagement with the EU on bilateral FTA talks beyond 
the two rounds of FTA negotiations that have been convened.  The Philippines also 
started scoping discussions with Chile and has commissioned a study to determ ine the 
feasibility of a PH -US FTA.  
 
While the Philippines does not have an FTA with the US and EU, it enjoys preferential 
treatment under their respective GSP schemes, which the Philippines continues to 
maximize. Locking in the preferences enjoyed under t hese schemes also serve as an 
impetus for pursuing bilateral FTAs with these partners.  
 
Apart from formal FTA talks, the Philippines also continues to strengthen its economic 
engagement with partners through its Joint Economic Commissions that serve as 
bilateral dialogue mechanisms to discuss ways to improve two -way trade and 
investments. Thus far, the Philippines has existing bilateral mechanisms with 28 
countries. Talks for the creation of similar mechanisms are also underway with six 
countries, namely: South Africa, Mexico, Peru, Papua New Guinea, Germany and Spain.  
 
The Philippines’ participation in ASEAN allows it to engage with important trading 
partners from within the regional grouping and external economies.   
 
Through ASEAN, the Philippines is linked to Australia (AANZFTA), China (ACFTA), India 
(AIFTA), Japan (AJCEPA), South Korea (AKFTA), and New Zealand (AANZFTA) by an 
FTA.  
 
The Philippines, through ASEAN, will soon implement an FTA with Hong Kong, following 
the completion of negotiations and signing of the ASEAN -Hong Kong FTA in November 
2017 in Manila.  
 
The Philippines is also engaged in the negotiations for the mega -FTA Regional 
Comprehensive Economic Partners (RCEP) with existing ASEAN+1 FTA Partners. Whe n it 
enters -into-force, RCEP would be the largest free trade agreement, in terms of GDP and 
consumer base. The Philippines expects to gain better market access conditions for 
goods and services exports to RCEP countries, as well as attract inward FDI.  
 
FTA possibilities with Canada, EU and Russia are provided to the Philippines through its 
ASEAN membership.  
 
The Philippines considers regional and bilateral engagements as building blocks towards 
multilateral disciplines and objectives.  
 
3 TRADE POLICIES AN D PRACTICES BY MEASURE  
 
3. Trade Policies and Practices by Measure  
 
3.1.1 Customs procedures  
 
Paragraph 3.4, page 30  
 
According to the report, the Customs Modernization and Tariff Act (RA No 10863) has the aim to 
modernize customs rules. EU industry is concerned still with a number of practices occurring when 
importing goods to the Philippines, including the (on and off) use of reference prices for meat 
products. The EU industry is also concerned with a number of practices occurring when importing 
goods to the Philippines, including the possible expansion of the use of pre -shipment inspection to 
cargo.  
 
EU question No 7:  Does the Philippines still consider using reference prices for meat imports? Is 
the Philippines considering the expansion of PSI despite  its recent commitments under the Trade 
Facilitation Agreement? Is the Philippines considering other (risk based) ways to manage some of 
its challenges in customs?  WT/TPR/M/3 68/Add.1  
 
- 43 - 
 
   
Response : 
 
The Philippines does not apply reference prices. For PSI, the Philippines will consider its 
use only for issues on quantity, rules of origin, but not on valuation and tariff 
classification. The Philippines, through the Bureau of Customs, adheres to the WTO 
Agreement on Customs Valuation on price actually paid or payable. Reference pr ices are 
tools only to ask questions to the stakeholders, for the production of sales contract, 
proof of payment.  
 
The Philippines can confirm that it is considering other risk -based ways to facilitate 
customs procedures.  
 
Paragraph 3.5, page 30  
 
Customs Memorandum 2017_10 -001 suspended the super green lane (SGL Customs 
Administrative Order 6 -2003) (also referred to as Blue Lane in the report).  
 
EU question No 8:  When will the Philippines  re-instate the super green lane for economic 
operators?  
 
Response : 
 
The Super Green Lane or 4ES code was not suspended; it was the Green Lane that was 
suspended.  
 
3.1.4 Other Charges affecting imports  
 
Paragraph 3.27, page 37  
 
The Value Added Tax (VAT) refund is a generalized matter of concern particularly for foreign 
renewable energy companies. The Renewable Energy Law of the Philippines establishes the VAT 
exemption for renewable energy developers. Foreign subcontractors (who cannot be developers 
since the promotion of renewable projects is reserved to majorit y-owned Filipino companies) 
should be exempt from VAT, according to the law, but the Philippine Tax Agency (BIR) has not 
developed a form to implement this exemption, and in the end renewable subcontractors have to 
bill their customers without VAT and supp ort the VAT of their suppliers. As a result, by not having 
other activities to compensate for, the companies end up obtaining systematic negative VAT 
balances and repayment takes years (sometimes up to 5), thus converting the VAT into practice at 
a non -recoverable and non -deductible cost.  
 
EU question No 9:  Does the Philippines plan to reform its VAT refund system in order to allow 
foreign companies (especially foreign renewable energy companies) to exercise their right to the 
exemption from VAT payments?  
 
Response : 
 
The Philippines can confirm plans to reform its VAT refund system.  The Philippines has 
introduced reforms in the VAT refund system are covered by RA 10963 or the Tax 
Reform for Acceleration and Inclusion (TRAIN) Act . Section 106 (l) of RA 10963provides 
for the establishment of a cash refund system.   
 
While all pending VAT refund claims as of 31 December 2017 shall be fully paid in cash 
by 31 December 2019. Starting 2019, applications of VAT refund will be paid in cash 
within 90 days from the filing of th e VAT refund applications.  
 
The Department of Finance shall establish a VAT Refund Center in the Bureau of Internal 
Revenue and Bureau of Customs that will handle the processing and granting of cash 
refund of creditable input tax.  
 
The Renewable Energy Law  of the Philippines, under Section 21 thereof, only provides 
for value -added tax exemption for all manufacturers, fabricators and suppliers of WT/TPR/M/3 68/Add.1  
 
- 44 - 
 
  locally -produced RE equipment and components on their shipments necessary for the 
manufacture and/or fabrication of RE equipment. There is no exemption for the sale of 
the service of subcontractors. However, the law provides for Zero percent value -added 
tax on purchases of local supply of goods, properties and services needed for the 
development, construction and ins tallation of its plant facilities even for subcontractors.  
  
While there is no specific action taken by the Bureau of Internal Revenue on RE, the 
recently passed RA 10963 or the TRAIN Law provides for the establishment of an 
enhanced VAT Refund system whic h processes refunds of input VAT within 90 days from 
filing of the VAT refund application. This enhanced process applies to all taxpayers, 
including entitles engaged in RE development, with claims for input VAT refund.  
 
Paragraph 3.29, page 37 and also Gov ernment report ( 2.2.3 Tax Reform, Paragraph 
2.14, page 6 -7) 
 
Reference is made to the taxation on alcoholic beverages. According to both the Secretariat and 
the government reports, the first package of TRAIN started to be implemented as from January 
2018 and it should include, among others, higher excise duties for a number of products 
(sweetened beverages, petroleum products coal, tobacco products and automobiles). Four more 
packages are under consideration by Congress also including possible higher excis e duties on 
alcoholic beverages and other 'luxury' goods.  
 
EU question No 10 : How is the Philippines ensuring that higher excise duties will not 
disproportionately impact higher segment products from trading partners? Could the Philippine 
present its plans as regards the future taxation of alcoholic beverages?    
 
Response : 
 
The Ph ilippines provides the same tax treatment to all products, regardless of origin.  
 
With respect to the plans on the future taxation of alcoholic beverages, it is under 
review for further simplification and adjustment.  
 
Republic Act No. 10351 - An Act Restru cturing the Excise Tax on Alcohol and Tobacco Products , 
(RA 10351) was implemented to address the WTO panel findings on discriminatory treatment 
imported spirits, and to meet public health goals and to simplify alcohol and tobacco taxation. The 
EU understa nds that its implementation has met the government’s objectives as well as increasing 
tax revenues.   
 
EU question No 11 : Considering the success of the review of RA 10351, does the Philippines 
envisage any changes aimed at further simplify its tax system?   
 
Response : 
 
The Philippines can confirm plans to further simplify the tax system. The Department of 
Finance prioritizes establishing tax measures that could best accommodate future 
economic changes through efficient tax administration. Hence, it comes with it 
simplifying the tax system in a progressive approach. For instance, RA 10963 or the Tax 
Reform for Accel eration and Inclusion (TRAIN) Act was implemented last January 2018 
which aims to establish a simpler, fairer, and more efficient tax system. In fact, as 
regards to the alcohol and tobacco taxation, amendments are being proposed in 
Congress that cover both  health and revenue aspects.  
 
Economic operators are concerned that further increases in taxation will push consumers towards 
illicit products.  
 
EU question No 12 : Are steps being taken to address the concerns of legitimate operators that 
increases in tax ation would push consumers towards illicit products, for example by improving 
administration and enforcement of the existing RA 10351?  
 WT/TPR/M/3 68/Add.1  
 
- 45 - 
 
  Response : 
 
Under RA 10351, mechanisms to alleviate, if not eradicate, illegal products are being put 
in place such as t he alcohol and tobacco tax stamps. In addition, under RA 10963 or the 
Tax Reform for Acceleration and Inclusion (TRAIN) Act, Petroleum products are planned 
to be marked under the fuel marking program in order to address smuggling.  
 
Para 3.29 and Table 3.5,  page 37  
 
The WTO bound tariff for sparkling wine (HS 220410) is set by the Philippines at 50%, being the 
current applied MFN average duty only 5%. However, the abnormally high specific excise levied on 
this product may be working as a “de facto” tariff an d/or trade barrier, given that the Philippines 
has no domestic production of this product.  
 
The excise structure of sparkling wine is as follows [per 750ml bottle, Net Retail Price (excluding 
excise and VAT):  
 
- PHP500 or less  → PHP 292.47/litre  
- More than P HP500→ PHP 818.90/litre  
 
For most prices ranges, except those in the upper end, the excise is well beyond the bound tariff 
for this product. Other reasons that may generally explain high specific duties on alcohol such as 
health concerns or public moral, should be discarded as the rest of the specific tax structure –e.g. 
still wine or liquor - is much lower.  
 
EU question No 13 : What is the rationale behind the excise tax levied by the Philippines on 
sparkling wine? What is the reason to levy this product ov er 23 times more than still or carbonated 
wine?  
 
Response : 
 
The distinction between sparkling and still wines has long been imposed under the RA 
8240 of 1997. Excise taxation of alcoholic beverages is based on per proof litre and not 
ad valorem . 
 
EU question No 14 : We note that the ad valorem  rate of 20% levied on spirits in the Philippines is 
calculated based on the Net Retail Price which can range greatly from retailer to retailer.  Does the 
Philippines plan to simplify this toward an ad valorem  structure based on CIF instead?  
 
Response : 
 
Currently, there are no plans to simplify the ad valorem structure to CIF.  
 
3.2.8 Export performance requirements  
 
Paragraph 3.59, page 46  
 
According to the report, certain tax incentives provided to exporters of non -traditional goods are 
contingent on export performance. It is described that these incentives are granted to foreign -
owned enterprises only if they export 70% of their production, whereas Philippine -owned 
enterprises are only required to export 50% of the ir production. The Philippine Government has 
announced that these provisions are currently under revision.  
 
EU question No 15 : Could the Philippines anticipate the outcome of the ongoing review, giving 
details on the treatment that will be reserved to national versus foreign enterprises?   
 
Response : 
 
Under the proposed Tax Reform for Acceleration and Inclusion (TRAIN) 2, outdated 
provisions of existing investments laws will be eliminated taking into consideration 
the current business models and engagements in free trade arrangements. In this WT/TPR/M/3 68/Add.1  
 
- 46 - 
 
  regard, th ere is not much difference between domestic and export markets since both 
are equally contestable.    
 
3.3 Measures Affecting Production and Trade  
 
3.3.1 Standards and other technical requirements  
 
Paragraphs 3.60 and subsequent page 46  
 
(Also Government report p. 2.7)  
 
EU question No 16:  Could Philippines clarify whether the 72 mandatory Philippines National 
Standards (PNSs) are all aligned with the international standards? If not, could the Philippines 
clarify what is the percentage of these 72 PNSs curr ently aligned with international standards? For 
those not yet compliant with, could the Philippines clarify if and when it plans to align them (in 
particular the automotive standards) with relevant international standards?  
 
Response : 
 
The Philippines would like to  refer to the list of 72 PNS for mandatory certification 
(Memorandum Circular No. 17 -09) with their corresponding products which can be 
accessed at:  
http://www.bps.dti.gov.ph/index.php?option=com_docman&task=cat_view&gid=97&I t
emid=77   
 
Currently, 46% PNS of these 72 PNS are aligned with International Standards.  For the 
remaining 54%, the Philippines is continuing the review of the same and these are 
prioritized based on national priorities.  
 
Paragraph 3.64, page 46  
 
Referenc e is made to the certification schemes.  
 
EU question No 17 : Does the Philippines certification system rely on risk assessment? Are third -
party certification schemes reserved for high risk products? Does the Philippines consider using 
less burdensome conformity assessment procedures, i.e. Suppliers Declaration of Conformity 
(SDoC) for low risk products or accepting them from third countries? Does the Philippines accept 
products complying with UNECE Regulations for motor vehicles, part and components? How does 
the Philippines take into account SMEs as regards confor mity assessment?  
 
Response : 
 
The BPS has no risk assessment guidelines established except for the ASEAN 
Harmonized Electrical and Electronic Equipment Regulatory Regime (AHEEERR) which 
will be implemented once finalized/ adopted by ASEAN. Furthermore, the  BPS is in the 
process of developing risk assessment guidelines for consumer products that it 
regulates.  
 
On SDoC, this is still being assessed at the moment as there is no enabling law.  
 
The Philippines accepts UNECE Regulations for products such as helme ts, automotive 
glass, and other automotive parts.  
 
On the Philippines’ taking into account SMEs on conformity assessment, it implements 
graduated schemes in terms of conformity assessment fees based on the size of 
company and value of shipments.  
 
Paragraph  3.65, page 46  
 
EU question No 18 : Could the Philippines specify the system for designation of conformity 
assessment bodies? Are the results from foreign conformity assessment bodies accredited under 
international accreditation schemes (ILAC, IAF) accepted  in the Philippines? If so, in which sectors?  WT/TPR/M/3 68/Add.1  
 
- 47 - 
 
  Are there any foreign certification bodies that have been accredited by PAB? And if yes, are they 
then allowed to certify products under the (PS) Quality Scheme and/or Safety Certification 
Scheme?  
 
Response : 
 
The regulatory agencies have a system for designating or recognizing conformity 
assessment bodies (CABs). To illustrate, the Bureau of Philippine Standards (BPS) 
designates a testing laboratory, inspection body, and certification body to conduct 
testing/in spection/certification of products such as matches, cement, steel, and 
household appliances, among others. Meanwhile, the Food and Drug Administration 
(FDA), an ISO 17025 accredited laboratory, recognizes private testing laboratories to 
conduct testing and  examination of samples of health products in accordance with FDA 
Order No. 2012 -001 dated 04 May 2012.  
 
The Philippine Accreditation Bureau (PAB), accredits conformity assessment bodies in 
accordance with specified international standards on voluntary bas is 
 
As a signatory to Mutual Recognition Arrangements and Multilateral Recognition 
Arrangements, PAB subscribes to the principle of “accredited once, accepted 
everywhere. At the same time, certain regulatory bodies have their own mandate and 
requirements t o ensure that products entering Philippines meet the requirements of 
Philippine standards, regulations and other specifications.  
 
For example, as stated in 3.63 of PH 5th TPR Secretariat Report, imported products 
including those certified abroad as meetin g international standards may still be 
subjected to sample testing by BPS to ensure that imports consistently meet Philippine 
standards as well in the exercise of Police Power of the State to protect health and the 
environment consistent with Section 2.2, Article 2 of the TBT Agreement.  
 
To date, PAB has no foreign certification bodies that have been accredited to certify 
products under the (PS) Quality Scheme and/or Safety Certification Scheme. PAB has 
one accredited foreign certification body for Quality Management System, Environment 
Management System and Food Safety Management System, which is the Brixton 
Assessment Services ( www.bascert.com ).   
 
3.3.3 Labelling and marking requirements  
 
EU question No 19 :  Does the Philippines require pre -approval, registration or certification of labels 
in any sector as a pre -condition for placing products on the market? Is labelling (including 
supplementary labelling or corrections) taking place in customs warehouses or  other designated 
areas at the point of import as an alternative to labelling at the place of origin? Are non -permanent 
or detachable labels allowed, rather than labels physically attached to the product?  
 
Response : 
 
For products under the purview of the BPS, pre -approval, registration or certification of 
labels as a pre -condition for placing products on the market are required for products 
covered by the mandatory certification scheme.  
 
This is allowed as long that is only intends to address non -conformit ies.  
 
Permanent or detachable labels are allowed depending on the requirement of the 
standards of the product and its relevant implementing guidelines.  
 
For the Food and Drug Administration, one of the bases for issuing the Certificate of 
Product Registra tion is evaluation and approval of product labels, based on the 
standards, rules and regulations issued by the FDA. Proposed product labels are 
submitted to the FDA for evaluation.  
 WT/TPR/M/3 68/Add.1  
 
- 48 - 
 
  3.3.2 Sanitary and phytosanitary requirements  
 
Paragraph 3.76, page 48  
 
The Philippines has accredited a number of countries as meat exporters, including 12 of the EU for 
various products (poultry, beef, pork), most obtaining a 'systems accreditation.' EU MS have been 
confronted with unclear audit and reporting procedures, in particular on fruit and vegetables.  
 
EU question No 20:  What are the measures envisaged by the Philippines in the short term to 
facilitate trade for the agricultural products, while ensuring a high level of sanitary and 
phytosanitary control? Is the Philip pines working on a single set of rules to audit accreditation 
requests in meat and other food products?  
 
Response : 
 
The Philippines considers transparency as a cornerstone of the SPS Agreement. It has 
actively supported the SPS Committee’s efforts to significantly improve the level of 
transparency in the application of SPS regulations. That said, the Philippines has been 
transparent in its application of its SPS measures through the agreed notification 
procedures in the WTO.  Every official introductio n or change in SPS measures since 
accession to the WTO have been diligently notified and were made readily available from 
the national enquiry point.  
 
All measures are under continuous review.  The Philippines is working on a single set of 
rules that is ba sed on risks, objective observations, and science.  
 
3.3.4 Competition policy and price controls  
 
Paragraphs 3.82 and 3.91, pages 50 -51 
 
According to the report, two -year transitory period of the Philippine Competition Commission 
(PCC) ended on 8 August 20 17. The PCC has initiated a number of studies and statements, 
including on the issue of providing licenses to foreign constructing companies by Philippine 
Construction Accreditation Board  (PCAB) which the PCC argued should be done notwithstanding 
the status of those companies in terms of capitalisation.  
 
Foreign construction companies can acquire a construction license called “ Quadruple A Platinum”  
from PCAB by which they could have 100% foreign capital under an investment of about 20 million 
euros (1 billion Php). “ Quadruple A Gold” contractors may undertake private projects under the 
following contract cost:  
 
a) For vertical projects - minimum contract cost of 100 million Euros (5 Billion P hp);   
b) For horizontal projects - minimum contract cost of 60 million Euros (3 Billion Php)  
 
Filipino construction companies can acquire “ Quadruple A Gold” also under an investment of about 
20 million euros (1 billion Php) but “Quadruple A Platinum” contractors may undertake government 
and private projects of any contract cost.  
 
EU question No 21 : Will the Philippines follow up on the advice of the PCC to do away with 
discriminatory arrangements by the PCAB and ease construction licenses to foreign op erators? In 
particular,  does the Philippines intend reducing differences between local and foreign contractors in 
the construction industry (Quadruple A Gold vs. Quadruple A Platinum)? Is the Philippines  planning 
on increasing the current limit for foreign companies over the current 25% to the access to public 
contracts?  
 
Response : 
 
Clarification should be made on the Secretariat Report that Quadruple A Platinum 
contractors may only undertake government and private projects, not government, and 
subject to (a) and (b) above as stated in the Secretariat Report.  
 WT/TPR/M/3 68/Add.1  
 
- 49 - 
 
  In terms of the questions raised, the President issued Memorandum Order No 16 in 
November 2017. It directs the NEDA Board or the economic planning agency board and 
the member agencies to take immediate steps to lift or ease existing restrictions on 
foreign participation in eight areas or activities.  The priority investment areas or 
activities where the equity restrictions will be reviewed include (1 ) contracts for the 
construction and repair of locally -funded public works and (2) public services, except 
activities and systems that are recognized as public utilities such as transmission and 
distribution of electricity, water pipeline distribution syst em, and sewerage pipeline 
system.  
 
3.3.6 Government procurement  
 
According to the report, there continues to be a high risk of corruption in the government 
procurement system. Industry wanting to contribute to the Philippines infrastructure plans is at 
times faced with issues of transparency and predictability. Provisions under Government 
Procurement Reform Act (2003) exclude or put foreign bidders at a disadvantage. President 
Duterte has expressed a number of times the ambition to reform the Philippines pr ocurement 
system to allow more foreign participation in the build build build agenda. (See also his Order 16 
of 2017).  
 
EU question No 22:  Does the Philippines intend to reform its legislation on government 
procurement and take measures to improve non -discriminatory access for foreign bidders and 
improving the independence of the review bodies?  
 
Response : 
 
At present, the preference for “domestic entities” in the Procurement of Goods has 
been removed by Republic Act No. 10667 or the Philippine Competition Act. Likewise, 
the President of the Philippines issued Memorandum Order No. 16, dated 17 
November 2017 directing NEDA and its member agencies to exert utmost efforts to 
lift or ease restrictions on certain investment areas or activities with limited foreig n 
participation, which include, among others, practice of particular professions, where 
allowing foreign participation will redound to the public benefit; and contracts for the 
construction and repair of locally -funded public works. Moreover, a number of b ills 
are pending in Congress proposing for the amendment of the Government 
Procurement Reform Act in various areas.  
 
The Philippines is not a signatory or observer of the WTO plurilateral Agreement on Public 
Procurement (GPA).  
 
EU question No 23 : Is the Ph ilippines considering joining the WTO GPA, even as observer, to allow 
more comfort to foreign bidders?  
 
Response : 
 
The Philippines is currently assessing the possibility of joining the WTO GPA as an 
observer. Pending the outcome of the assessment, the Phi lippines is continuously 
undergoing capacity development activities on the WTO GPA through the participation of 
representatives of the Government Procurement Policy Board in the WTO’s global and 
Asian workshops.  The Philippines will be hosting a national workshop on government 
procurement by the second quarter of 2018.   
 
President Duterte has been making statements to allow the 'Swiss Challenge' method to procure 
infrastructure.  
 
EU question No 24 : What concretely does the Philippines mean with Swiss Challenge method and 
how would it be implemented to allow for fair competition?  
 
Response : 
 
Swiss Challenge is more applicable to Public -Private -Partnership/ Build -Operate -
Transfer contracts where an un solicited proposal is subjected to Swiss Challenge.  WT/TPR/M/3 68/Add.1  
 
- 50 - 
 
   
The rules or guidelines in the conduct of Competitive Challenge or Swiss Challenge 
modality alongside Government Procurement Reform Act still need to be laid down, 
since this method is not prescribed und er RA 9184 and its IRR.  
 
Executive Order 34 (17 July 2017) aims to prescribe the rules and procedures on the review and 
approval of all governments contracts, allows for 'alternative' procurement processes should the 
product they require fall under exempti ons from public bidding.  
 
EU question No 25 : Fully understanding the need for infrastructure investments and the sense of 
urgency, how does the Philippines aim to make procurement bidding more competitive to get the 
best value for money? Does the alternat ive procurement process allow more foreign ownership in 
infrastructure projects?  
 
Response : 
 
Through Executive Order No. 34 s. 2017, prior approval from GPPB for the use of any of 
the alternative methods of procurement for procurement projects with an approved 
budget for contract (ABC) of at least PhP500 million is no longer required.  
 
Under the Government Procurement Reform Act and its Implementing Rules and 
Regulations, procuring entities consider Value for Money in the development of the 
project requirements during the procurement planning. There are relevant provisions as 
well on the applicati on of value engineering in the procurement of infrastructure 
projects. Likewise, the use of Life -Cycle Costing, which is a tool to determine the most 
cost-effective option among different competing alternatives, is suggested in the 
conduct of procurement p lanning.  
 
Neither Competitive Bidding nor the Alternative Methods of Procurement allow foreign 
ownership of government infrastructure projects except when provided for under any 
Treaty or International or Executive Agreement as provided in Section 4 of the  RA 9184 
and its IRR. Likewise, joint ventures/consortia in which Filipino ownership or interest is 
less than seventy -five percent (75%) may be eligible where the structures to be built 
require the application of techniques and/or technologies which are no t adequately 
possessed by Filipinos and that Filipino ownership or interest shall not be less than 
twenty -five percent (25%).  
 
EU question No 26 : Is the Philippines planning to reduce the different conditions affecting foreign 
companies when it comes to pu blic services, concessions and Information and communications 
technology (ICT)? For instance, the need of a bilateral Treaty or Agreement to allow foreign 
companies to participate in infrastructure projects; or the authorization required to foreign 
compani es to offer consulting services.  
 
Response : 
 
As mentioned, the President issued Memorandum Order No. 16, dated 17 November 
2017 directing NEDA and its member agencies to exert utmost efforts to lift or ease 
restrictions on certain investment areas or acti vities with limited foreign participation, 
which include, among others, practice of particular professions, where allowing foreign 
participation will redound to the public benefit; and contracts for the construction and 
repair of locally -funded public work s.  It includes public services, except activities and 
systems that are recognized as public utilities such as distribution of electricity, water 
pipeline distribution system, and sewerage pipeline system.  
 
3.3.8.2 Patents  
 
According to the Secretariat Re port, in the case of drugs and medicines, the discovery of a new 
form or new property or new use of a known substance, or the use of a known process, are not 
patentable.  
 
EU question No 27 : If the invention of a new form or new property or new use of a known 
substance, or the use of a known process does clearly fall into the scope of the patentability WT/TPR/M/3 68/Add.1  
 
- 51 - 
 
  criteria, i.e. "any technical solution of a problem in any field of human activity which is n ew, 
involves an inventive step and is industrially applicable" would in such case the patent be granted?   
 
Response : 
 
As stated in the Secretariat Report, patentability is determined not only in accordance 
with the definition of patentable inventions under  the IP Code, i.e. as "any technical 
solution of a problem in any field of human activity which is new, involves an inventive 
step and is industrially applicable", but also whether such inventions fall under non -
patentable subject matter (e.g. discoveries,  scientific theories, and mathematical 
methods), as well as whether they comply with the patentability criteria of novelty, 
inventive step, and industrial applicability.  
 
For drugs and medicines, if the new form and new use of a known substance are not 
mere discoveries, and if the use of a known process produces a new product and at least 
employs a new reactant, then these may be considered as patent eligible. However, they 
must still satisfy the patentability criteria of novelty, inventive step, and indus trial 
applicability in order to be granted a patent.  
 
The Philippines is considering amendments to the Quality and Affordable medicines Act aim for 
price setting and a regulatory board.  
 
EU question No 28 : Is the Philippines considering other ways to make medicines more affordable 
for its citizens?  
 
Response : 
 
In addition to the legislative tract, the Philippines is undertaking initiatives to make 
medicines more affordable. The establishment of a drug manufacturing facility 
(Pharmazone) in the country is currently being explored. Apart from finished 
pharmaceutic al products, manufacturing of Active Pharmaceutical Ingredients (APIs) 
for vaccines is likewise being considered.  
 
The Department of Health has plans to revive the Botika ng Barangay  (BnB; village 
pharmacy). The program aims to provide free medicines, (ex ample, antibiotics, 
anesthetics and anti -asthma) for the poor especially in far flung areas. The 
implementing guidelines of BnB are being finalized.   
 
3.3.8.3 Copyright and related rights  
 
Paragraph 3.128, page 56  
 
According to the report, copyright prote ction applies only to works done in the Philippines and/or 
of authors who are nationals of or have their habitual residence in the Philippines.  
 
EU question No 29 : Could the Philippines explain how its legislation on copyright protection is in 
line with the Berne Convention?  
 
Response : 
 
Therefore, the protection afforded by the IP Code to copyrightable works applies to:  
 
(1) Works that are protected by virtue of and in accordance with any international 
convention or other international agreement to which the Philippines is a party, 
including the Berne Convention (Sec. 221.2 of the IP Code);  
 
(2) Works of authors who are nationals of, or have their habitual residence in, the 
Philippines, consistent with Articles 3.1(a) and 3.2 of the Berne Convention 
(Sec.  221.1 [a] of the IP Code);  
 WT/TPR/M/3 68/Add.1  
 
- 52 - 
 
  (3) Audio -visual works the producer of which has his headquarters or habitual 
residence in the Philippines, consistent with Article 4(a) of the Berne  Convention 
(Sec. 221.1 [b] of the IP Code);  
 
(4) Works of architecture erected in the Philippines or other artistic works 
incorporated in a building or other stryctyre located in the Philippines, consistent 
with Article 4(b) of the Berne Convention (Sec. 221. 1[c] of the IP Code);  
 
(5) Works first published in the Philippines, consistent with Article 3.1(b) of the 
Berne Convention (Sec. 221.1[d] of the IP Code); and  
 
(6) Works first published in another country but also published in the Philippines 
within thirty (30) d ays, irrespective of the nationality or residence of the authors, 
consistent with Article 3.4 of the Berne Convention (Sec. 22.1[e] of the IP Code).  
 
Section 3 of the IP Code also states that “[a]ny person who is a national or is domiciled 
or has a real an d effective industrial establishment in a country which is a party to any 
convention, treaty or agreement relating to intellectual property rights or the repression 
of unfair competition, to which the Philippines is also a party, or extends reciprocal 
rights to nationals of the Philippines by law, shall be entitled to benefits to the extent 
necessary to give effect to any provision of such convention, treaty or reciprocal law, in 
addition to the rights to which any owner of an intellectual property right is  otherwise 
entitled by this Act.”   
 
All these provisions, taken together, mean that protection is extended not only to works 
done in the Philippines and/or of authors who are nationals of, or have their habitual 
residence in, the Philippines. The IP Code,  as amended, fully implements the provisions 
of the Berne Convention.  
 
3.3.8 Intellectual Property Rights  
 
Both Reports indicate the good progress made on the legal revision of the IP policies in the 
Philippines, including protection and enforcement. The EU has been invited to three meetings by 
IPOPHIL on a Consultation regarding Philippines Rules and Regulations on Geographical Indications 
(third in April 2015) but so far no final regulation on a sui generis system for GIs has been 
adopted.  
 
EU question No 30 : Could the Philippines indicate where the process is at the moment and if the 
country still intends to develop its own GI regulation?  
 
Response : 
 
Geographical indications are currently protected in the Philippines under the law on 
trademarks, pursuant to the IP Code, and in full compliance with the country’s 
obligations under the TRIPS Agreement. Nevertheless, the Philippines, through the 
IPOPHL, continues to develop possible enhancements of the GI protection system, 
including through the enact ment of the appropriate legal issuance. Through a whole -of-
government approach, consultations with stakeholders, including the relevant 
government agencies and foreign trading partners, continue. The Philippines remains 
committed to adopting the appropriat e measures in due time, with the view of 
strengthening the protection of geographical indications and in pursuit of its national 
development agenda.  
 
4 TRADE POLICIES BY SECTOR  
 
4.1 Agriculture and 3.1.3.2 Tariff quotas  
 
4.1.5 Rice  
 
According to the report, t he Philippines agreed to tariffy the quantitative restrictions on rice upon 
the expiry of the waiver, on the basis of the Executive Order 23 (Extending the effectivity of the 
MFN rates of duties on certain agricultural products).  WT/TPR/M/3 68/Add.1  
 
- 53 - 
 
   
EU question No 3 1: Could the Philippines clarify whether it plans to reconsider increasing the tariffs 
for products concerned to provide predictability to operators and consumers (meat, dairy)?  
 
Response : 
 
Upon the enactment of a law to tariffy rice, concessions granted b y the Philippines to 
maintain status quo in its rice import policies, as provided in Executive Order No. 23, 
shall be terminated. Thus, tariff for the said products may increase.  
  
However, interested parties may voluntarily seek to change the tariff rates  by invoking 
the provisions of the Customs Modernization and Tariff Act on flexibility clause.  
 
4.3.2 Electricity  
 
Paragraph 4.56, page 69  
 
The report mentions that Feed -in-tariff incentives for hydropower and biomass are due to expire in 
December 2017 but  are under review.  
 
EU question No 32 : Is the Philippines considering a more competitive procedure of granting 
certificates of eligibility (currently on a first -come -first serve basis)?  
 
Response : 
 
This has expired and has not been renewed.  
  
Clarify that it is not on a first come first serve basis but is on a first to operate basis. 
Even then it is fully subscribed.  
 
4.5.1 Financial services  
 
4.5.1.2 Insurance  
 
Paragraph 4.89, page 75  
 
The report states that according to the amended Insurance Code, al l insurance companies 
authorized to do business in the Philippines are required that risks must first be offered "to other 
companies similarly authorized to do business in the Philippines in such amounts and under such 
arrangements as would be consistent w ith sound underwriting practices".  
 
EU question No 33 : Could the Philippines clarify as to whether this refers to re -insurance?  
 
Response : 
 
The paragraph refers to reinsurance. For clarity, the Philippines proposes to add the 
phrase in the Secretariat Report, “before they can enter into reinsurance arrangements 
with unauthorized foreign insurers” on paragraph 4.89, page 75 to conform to 
Section  224 of the Amended Insurance Code and Circular Letter No. 2014 -07. Hence 
paragraph 4.89 shall read:  
  
“As per the Amended Insurance Code, "all insurance companies authorized to do 
business in the Philippines requires that risks must first be offered to other companies 
similarly authorized to do business in the Philippines in such amounts and under such 
arrangement s as would be consistent with sound underwriting practices before they can 
enter into reinsurance arrangements with unauthorized foreign insurers ".  
 
Paragraph 4.91, page 75  
 
According to the report, companies must obtain a licence (Certificate of Authori ty) from the IC 
prior to commencement of business. There are no restrictions on the form of business that foreign 
companies may operate in the country (i.e. branches, subsidiaries, or joint ventures), nor are WT/TPR/M/3 68/Add.1  
 
- 54 - 
 
  there limits on foreign equity participation. H owever, o nly the GSIS (Government Service 
Insurance System) can provide insurance for projects financed by the government and for private 
BOT projects, at least to the extent of government participation in the project while foreign 
insurance companies part icipation in these projects remains very restricted.  
 
EU question No 34 : Is the Philippines planning to allow foreign insurance companies to provide 
insurance to projects financed by the government?  
 
Response : 
 
Based on the Republic Act (RA) 656, the national government agencies and local 
government units, except those belonging to municipalities below first class are 
required to insure with GSIS their properties, assets and other interest against any 
insurable risk.  
 
Conversely, Presidential Decree (P D) 245 provides GSIS the authority to reinsure with 
and accept reinsurance from insurance and reinsurance companies in the Philippines 
and abroad.  
 
The Philippines will continue to explore ideas to relax this law to come up with a more 
liberal approach.  
 
Paragraph 4.95, page 76  
 
According to the report, re -insurance companies doing business in the Philippines are required to 
cede to the NRCP at least 10% of outward reinsurance placements. In addition, it is also stated 
that reinsurance services may be obtai ned from abroad upon the authorization of the IC.  
 
EU question No 35 : Would the Philippines consider removing this restriction so as to allow re -
insurers full freedom of retrocession?  
 
Response : 
 
Presidential Decree 1270 series 1977 requires re -insurance companies to cede 10% to 
NRCP.  
  
For reinsurance, please note that under Section 223 of the Amended Insurance Code, 
“insurance companies” in the Philippines are allowed to “cede their excess risks to 
authorized foreign reinsurance companies” provided they comply with the conditions 
under the Section.  
 
Additionally, Section 225 of the Amended Insurance Code allows insurance companies to 
cede their insurance risks to foreign insurance or reinsurance companies provided they 
do so under such terms and condition s prescribed by the Commissioner. Currently, there 
is one Circular Letter that requires facultative placements of insurance companies 
abroad to be approved if this involves foreign currency. This circular is currently being 
reviewed in light of the review of the regulatory framework of reinsurance.  
 
Furthermore, the Philippines is closely working with stakeholders and industry partners 
to discuss possible policy improvements to provide a more enabling regulatory 
environments for reinsurance/retrocession.  
 
EU question No 36 : Could the Philippines clarify the conditions for such an authorisation?  
 
Response : 
 
The facultative reinsurance placement shall first be offered locally as follows before the 
company can enter into facultative reinsurance placement with foreign reinsurance:  
  
 for Marine Hull, Aviation, Money Securities Payroll and Robbery risks, to at least 
two (2) local direct writing companies, one (1) foreign authorized company and 
one (1) domestic professional reinsurer;  WT/TPR/M/3 68/Add.1  
 
- 55 - 
 
   For all other risks, to at least five (5) local direct writing companies, three (3) 
foreign authorized companies and one (1) domestic professional reinsurer.  
 
Notwithstanding, the provision under Section 4 of PD 1270, companies shall cede first to 
NRCP at least (10%) of their outwar d reinsurance placement. Likewise, the letters of 
declinations of reinsurance offer with specific reasons should be submitted to Insurance 
Commission.  
  
Consequently, the circular on approval of facultative placements abroad is being 
reviewed in light of t he review of regulatory framework on reinsurance. Likewise, 
Facultative Placement Abroad are always approved by the Insurance Commission given 
they comply with the terms and conditions prescribed by the Insurance Commissioner.  
 
4.5.4 Tourism  
 
Paragraph 4.1 33, page 81  
 
Significant market access and barriers to foreign investment remain in the tourism sector. 100% 
foreign equity is allowed in accommodation facilities.  
 
EU question No 37:  Does the Philippines plan to increase the limits for foreign ownership in 
tourism?  
 
Response : 
 
The Philippines allows100% foreign equity for hotel/ lodging services. On the other 
hand, other sub -sectors under the travel and tourism services namely: restaurants, 
travel agencies and tour operator services and professional congress organizers shall 
still be subject to existing domestic rules and regulations.  
 
It should also be noted that as regard public utilities and land ownership, the 60 -40 rule 
applies.  
 
4.5.5 Professional services  
 
Paragraph 4.137, page 82  
 
Even if ther e is a framework for the practice of some professions in the Philippines, the procedure 
to apply for licencing of a foreigner individual is unclear.  
 
EU question No 38 : Will the Philippines improve the procedure to apply for licensing of foreign 
professionals? The EU would appreciate to receive data about the number of professionals having 
actually been accredited since the last review.  
 
Response : 
 
Since 2016, the Philippines, through the Professional Regulation Commission (PRC),  has 
issued polic ies to  streamline the processing of applications for authority to practice by 
foreign professionals in the Philippines particularly in the processing of Special 
Temporary Permits that allow foreign professionals to practice in the country for specific 
purposes and definite period of time.  This is covered by Memorandum Order No 3 & 4, 
Series of 2016.  As of February 2018, there were 3,536 foreign professionals that were 
granted authority to practice a profession in the Philippines by way of a special 
tempo rary permit.  
 
4.5.5 Professional Services  
 
Reference is made to the existing restrictions for professional services. Under the 10th FINL most 
professional services were taken out of the list provided there was reciprocity. However, it still 
seems difficult for professional service providers to enter the Philippino market.  
 WT/TPR/M/3 68/Add.1  
 
- 56 - 
 
  EU question No 39:  Is the Philippines considering measures to  enhance the commitments on 
professional services and relative to homologation of titles/accreditations/studies (specially 
addressing the possibility to sign engineering projects)?  
 
Response : 
 
The practice of Pharmacy and Forestry profession through the r espective laws Republic 
Act 10918 (An Act Regulating and Modernizing of Pharmacy in the Philippines, Repealing 
for the Purpose Republic Act 5921, Otherwise Known as the Pharmacy Law) and 
Republic Act 10690 (An Act Regulating the Practice of Forestry in the  Philippines and 
Appropriating Funds Therefore, Repealing for the Purpose Republic Act 6239, Known as 
“The Forestry Profession Law”) now allows foreign individuals to practice in the 
Philippines. The provision on foreign reciprocity has been incorporated i n the said laws.  
 
The same provision of foreign reciprocity is also considered in the proposed bills in 
Congress for the practice of radiologic and x -ray technology as well as the criminology 
profession.  
 
The difficulty of accessing the Philippine market by professionals may be attributable to 
the requirements being required by the respective professional boards. However, the 
processes involved has been clarified and simplified by several policy issuances by the 
Professional Regulation Commission (i.e., PR C Memorandum Order No.3 and 4, series of 
2016). Again, the PRC has taken a liberal approach in the application of the principle of 
reciprocity.  
 
On the homologation of titles, the PRC maintains that the use of titles (profession) is 
allowed only to individ uals who are able to complete all the qualifications required for 
the said profession under their charter. This would include passing the respective 
licensure examination and registration in the roll of professionals.  
 
On the Accreditation of Studies, the PRC is at the forefront of undertaking certain 
deliverables under the PQF and AQRF where accreditation of studies and referencing of 
qualifications are being considered very substantively. Currently though, academic 
undertaking or studies are not enough to  automatically enable an individual to practice a 
regulated profession.  
 
WT/TPR/G/368 – Government Report  
 
2.1 Domestic Policies and Initiatives  
 
2.2.1 Trade Facilitation  
 
Paragraph 2.11 page 6  
 
The Philippines refers to the adoption of the Customs Modernization and Tariff Act and mentions 
that good work is ongoing with regard to drafting implementing regulations. The EU appreciates 
being invited to some of the consultations on these. The Philippi nes made statements about 
starting implementing its national single window in 2018.  
 
EU question No 40 : Could the Philippines provide more details on the implementation of its Single 
Window, also in view of its ASEAN commitments?  
 
Response : 
 
The Philippines is currently in the process of improving its automated system for 
processing import clearances in line with the national program to enhance the National 
Single Window and consistent with its ASEAN commitments. The TradeNet system is 
being p repared for live operation by the middle of 2018.  This will allow parties involved 
in trade to lodge information and documents to fulfill all import, export and transit -
related regulatory requirements.  
 WT/TPR/M/3 68/Add.1  
 
- 57 - 
 
  TradeNet is an automated licensing, permit, clearance, and certification system 
integrated into one platform for regulatory agencies.  It is a cloud -based single entry 
point where trade customers and stakeholders can submit information and documents to 
government agencies in order to comply with imp ort/export requirements.  The 
TradeNet system will cover all the functions of the current National Single Window.  
 
The Philippines’ Bureau of Customs is still finalizing its procurement process for the new 
customs system with an integrated National Single Window.  
 
The Philippine Customs request for technical assistance on ASEAN Single Window (ASW) 
readiness/assessment from US -ASEAN Connectivity through Trade and Investment (US -
ACTI) will commence on April 17, 2017. Target Go Live will be on 2nd Quarter of 2018.  
 
The Philippines’ Department of Finance and the Department of Information and 
Communications Technology has started on the development of the Philippine Trade Net. 
This is a system which will provide common platform to all Philippine Government 
agenc ies involved in trade clearance. Currently discussions are being undertaken with 
the Customs and Agriculture Department for the immediate implementation of 
requirements in order to comply with our commitment to the ASW. TRADENET will 
possibly provide the N ational Single Window solutions for the Philippines.  
 
Philippines will join the Electronic ATIGA Form D Live Operation by 2Q 2018.  End -to-end 
testing with the exchange ready member states will start third week of March 2018.  
 
The Philippines is coordinati ng and developing the e -Phyto and e -Animal Health 
Certificate with its concerned agencies. But will defer to the ASEAN SPS Contact Points 
(ASCP) with regard to its readiness to join the initial testing.  
 
2.3 Manufacturing resurgence  
 
Paragraph 2.16, page 7 
 
In 2014, the Philippines launched a new industrial strategy focused on upgrading and transforming 
the country's manufacturing sector, including on automotive. The Philippines' incentives under its 
"CARS" programme (EO 182 of 29 May 2015) seem however to  mostly benefit larger operators 
already present in the country.  
 
EU question No 41 : Does the Philippines intend to revise the eligible criteria of the CARS 
programme allowing new investors to benefit of the scheme and, ultimately, helping diversifying 
the economy?  
 
Response : 
 
All automotive brand principals, whether or not present in the Philippines at the time the 
application period was opened in January 2016, were invited to participate in the 
Program. The applications were approved based on the criteri a and qualifications set by 
EO 182.  
 
The Program was designed to accommodate three models of four -wheeled vehicles. To 
date, however, only two slots were taken. The third slot has now been allocated to the 
eco-Public Utility Vehicle (eco -PUV) Modernization Program, which will be a subject of 
another Executive Order. In this regard, there is no more slot available that can be 
opened to new investors.  
 
Section 2.4 Services  
 
Page 7  
 
The report mentions that Information Technology -Business Process Management (IT -BPM) industry 
employs one of the highest percentages of female workers, registering an estimated 53% of all 
employees. This percentage is significantly higher than the national figure which stands at 39.6%.  
 WT/TPR/M/3 68/Add.1  
 
- 58 - 
 
  EU question No 42 : Is the Philipp ines taking specific measures to promote female employment in 
Information Technology -Business Process Management (IT -BPM) industry and to maximise positive 
impacts of increased women participation in international trade for businesswomen and female 
workers  in general?  
 
Response : 
 
The Philippines has initiated numerous measures not just to promote female 
employment in the IT -BPM Industry but of female workers across all sectors. These 
measures also ensure the protection of their rights and encourage women pa rticipation 
particularly in occupations usually dominated by male.     
 
The Philippines has enacted Republic Act 10151 (RA) in July 2010 or an Act Allowing the 
Employment of Night Workers, thereby repealing Articles 130 and 131 of Presidential 
Decree Numbe r 402, as amended, otherwise known as the Labor Code of the Philippines.  
It allows women to work at night which promotes gender equality and provided 
employment opportunities for women.    
 
To implement RA 10151, the Department of Labor and Employment (DO LE), issued 
Department Order No. 119, Series of 2012, which provides for the mandatory facilities 
for women such as lactation station in pursuant to Republic Act 10028 or the Expanded 
Breastfeeding Promotion Act of 2009, facilities for transportation and p roperly 
ventilated sleeping or resting quarters and separate toilet facilities for men and women.  
 
Senate Bill No. 1363 or the Telecommuting Act of 2017, has been passed in the third and 
final reading in the Senate of the Philippines on May 2017. The said  Bill seeks an 
alternative way for the IT -BPM industry wherein employees can work from home given 
that the employees are provided with the same treatment with other employees at the 
workplace.  
 
The DOLE issued Department Order No. 102 series of 2010, which  provides for the 
guidelines on the implementation of Human Immunodeficiency Virus (HIV) and Acquired 
Immunodeficiency Syndrome (AIDS) that provides for the mandatory formulation of 
workplace policy and programs on HIV and AIDS, advocacy and information ca mpaign 
on the basic information on HIV and AIDS and such as social policies on non -
discriminatory policies, confidentiality and work accommodation and arrangement.  
 
The DOLE and IT and Business Process Association of the Philippines (IBPAP) signed a 
Memor andum of Agreement (MOA) in 2014 to foster voluntary compliance with 
Occupational Safety and Health (OSH) and general labour standards. The MOA is 
monitored by DOLE.  
 
Senate Bill No. 1305 or Expanded Maternity Leave Law of 2017 has been passed in the 
third  and final reading in the Senate of the Philippines in March 2017. The bill will 
increase the maternity period from sixty (60) to seventy -eight (78) days to one hundred 
twenty (120) days for female workers in the government service and the private sector 
with an option to extend for an additional thirty (30) days without pay, providing a 
parental leave period for adoptive parents and granting an additional thirty (30) days 
for solo mothers.  The counterpart bill of Senate Bill 1305 in the House of 
Represent atives, House Bill 4113, still needs to be passed by the Lower House.  
 
 
Other issues  
  
Legalisation of official documents  
 
The Philippines does not recognize the legalization of official documents by Hague Apostille since it 
is not part of the Hague Convention. Although the Government has formally expressed its interest 
in acceding to this Agreement, implementation has been delayed indefinitely. This situation implies 
that the legalization of official documents is necessary, for example, for the regis tration of a large 
number of products in the Philippines, or for public tenders, involves a long, cumbersome and 
costly administrative procedure.  WT/TPR/M/3 68/Add.1  
 
- 59 - 
 
   
EU question No 43 : Is the Philippines planning to take any action to accelerate the implementation 
of the Hag ue Convention?  
 
Response : 
 
While the internal legal procedures for the Philippines’ accession to the Apostille 
Convention has been ongoing, the Department of Foreign Affairs (DFA), as competent 
authority, established in 2014 a component of the electronic A postille system (e -APP) 
through the e -Register. The e -Register has two elements:  
 
 First, the Document Management System - Encoding, Masterlisting, Reporting 
(DMS -EMR) which streamlines the repetitive backend operation processes to cut 
down turn -around tim e and optimize manpower resources.  
 
 Second, the Authentication Verification System (AVS) which provides the public 
with a convenient method of verifying the authenticity of documents issued by 
the Department online and in real time, and stores an online secure database of 
digitized copies of the updated list of specimen signatures of authorized officials.  
 
Following the Philippines’ consultations with the representatives of the Hague 
Conference on Private International Law (HCCH) , tit was confirmed that accession to 
the Convention only requires ratification by the President of the Philippines and does not 
need concurrence by the Philippine Senate.  
 
The DFA submitted in October 2017 a new set of ratification papers for approval by the 
President.  
NORWAY  
 
1. Does the Government of the Philippines envision a liberalization of the Cargo Reservation 
Law, which requires that cargoes owned by the government or controlled by state owned 
corporations shall be shipped on board Philippine flag vessels?  
 
Response : 
 
An amendment of the law is seen as needed since most cargo reservations have 
disappeared over the past decades and the relevance of cargo sharing agreements is 
declining. PD 1466 is also not enforceable as the Freight Booking and Cargo 
Consolidation Center un der the Philippine Shippers’ Bureau is no longer existing.  
 
2. According to the Secretariat report paragraph 4.101, telecoms services are regarded as a 
public utility. Foreign equity in telecoms companies is limited, by the Constitution as well as the 
Public Service Act, to 40 percent. Foreigners may not become executives or managers of telecoms 
firms, and the number of foreign directors must be proportionate to the firm's aggregate share of 
foreign capital. What are the reasons for these limits and are there any processes underway which 
may lead to reform?  
 
Response : 
 
The reasons for the above -stated limitations on “ Foreigners may not become executives 
or managers of telecoms firms, and the number of foreign directors must be 
proportionate to the firm's aggreg ate share of foreign capital” is due to the concept that 
telecommunication service is considered a public utility. The restrictions existing under 
telecommunications and public utilities, among others, are specified in the Constitution 
and, as such, cannot  be amended by legislation.  
 
A Consultative Committee has been established to prepare recommendations and 
proposals for amending the 1987 Constitution.  
 WT/TPR/M/3 68/Add.1  
 
- 60 - 
 
  3. According to paragraph 1.19 in the Secretariat report, the poverty rate declined from 25.2% 
in 2012 to 21.6% in 2015. However, according to the same report’s paragraph 1.3, 26.3% of the 
population are under the poverty line. It would be useful to have an e xplanation as to why these 
figures differ, as well as explanation of which measures the government is taking to promote 
poverty reduction and a more equal income distribution.  
 
Response : 
 
The figures mentioned in the report refer to the 2009, 2012 and 201 5 full -year poverty 
incidence among population.  
 
Table 1. Poverty Incidence among Population and Magnitude of the Poor - PHILIPPINES  
 
Year Poverty Incidence  
among Population (%)  Magnitude of Poor  
Population  
(million people)  
1991  34.4 21.7 
2006  26.6 22.6 
2009  26.3 23.3 
2012  25.2 23.7 
2015  21.6 21.9 
Source: https://psa.gov.ph/content/poverty -incidence -among -filipinos -regsietered -216-2015-psa. 
 To reduce poverty and create mpre equal income distribution, the government is 
dealing the issues at the macroeconomic and microeconomic levels.  
 
 In particular, Package 1 of  Republic Act  No. 10963 or the Tax Reform for 
Acceleration and Inclusion (TRAIN) was passed. Inflation remains manageable 
demonstrating monetary policy credibility.  
 
 To spur more economi c activities, business climate is being improved through 
various reforms such as the continuation of Project Repeal, enactment of the Expanded 
Anti-Red Tape Act, expansion of the coverage of TradeNet, pilot -testing of the the On -
line Unified Business Permi t Application Form, creation of the Credit Information 
System, and the implementation of the Company Registration System. Support to 
entrepreneurship is also a policy priority.  
 
 Issues on the labor market are also being addressed such as youth unemployment  
and underutilization, labor market information facilitation, domestic talent gaps, and 
female participation in the labor force.  
 
 On the legislative agenda, the Legislative -Executive -Development Advisory Council 
(LEDAC) is regularly convened to fast -track the passage of priority legislative agenda.  
 
4. Norway views with interest the amendments made to the Fisheries Code in 2015, and 
commend efforts by the Government of the Philippines to combat illegal, unreported and 
unregulated fishing. Does the Government h ave plans to introduce further measures, including 
legislative changes, to eliminate illegal, unreported and unregulated fishing?  
 
Response : 
 
As of now, the Philippine government is putting in place mechanisms to combat IUU 
fishing based on existing domestic laws.  
PERU  
1. Is there a single regulation on public procurement or are there different regulations for 
special cases? In that sense, does the rule on public procurement apply at the national level or is it 
applied by government levels?  WT/TPR/M/3 68/Add.1  
 
- 61 - 
 
  Response : 
The Philippines has one law that governs public procurement, which is Republic Act (RA) 
No. 9184 or the Government Procurement Reform Act, and its Implementing Rules and 
Regulations (IRR). This applies to the entire government, both national and local.  
 
2. Are state companies subject to the provisions of the public contracting regulations of the 
Philippines, or they are governed by a special regime?  
Response : 
State companies or what the Philippines refers to as government -owned and/or 
controlled corporation s are likewise subject to RA 9184 and its revised IRR (IRR).  
3. Do the rules of public procurement establish a classification on national and international 
tenders?  
Response : 
The rules do not establish specific classification on national and international tenders 
although there are instances wherein foreign participation is allowed by the rules.  
4. In relation to the PhilGEPS electronic platform, please provide more details in relation to 1) 
the degree of implementation; and 2) whether the platform only all ows the publication of 
information or it is also possible to carry out transactions online?  
Response : 
The current system allows the publication of notice, award and notice to proceed. 
Electronic bidding was previously pilot tested in two agencies, however,  was put on hold 
in 2015 when the plans for the modernization of the PhilGEPS were rolled out. The 
electronic bidding platform that was pilot tested included publication of notice, bid 
submission, bid opening, evaluation, post -qualification, award and noti ce to proceed.  
5. Does the Philippines plan to implement an administrative tribunal to resolve supplier 
challenges?  
Response : 
The Philippines is reviewing the possibility of establishing an administrative tribunal to 
resolve protests.  
6. Once an appeal for  reconsideration is filed, is the bidding process suspended?  
Response : 
The bidding process is not suspended. The law provides that in no case shall any protest 
taken from any decision stay or delay the bidding process. However, protests must first 
be resol ved before any award is made.  
7. Is some type of guarantee needed when filing a challenge appeal?  
Response : 
Protests filed must be accompanied by the payment of a non -refundable protest fee, 
which shall be paid in cash in accordance with a prescribed sched ule of protest fees 
based on the range of the approved budget for the contract.  
8. Does the Philippines have any specific regulations that favor MSMEs in relation to public 
procurement?  
Response : WT/TPR/M/3 68/Add.1  
 
- 62 - 
 
  There are specific public procurement regulations that favor  MSME. Under Section 4 of 
Republic Act No 9501 or the Magna Carta for MSMEs, eligible MSMEs shall be entitled to 
a share of at least 10 percent (10%) of total procurement value of goods and services 
supplied to the Government, its bureaus, offices and agen cies annually.  The Department 
of Budget and Management shall monitor the compliance of government agencies on the 
required procurement for MSMEs and submit its report to the MSMED Council on a 
semestral basis and to the Congress of the Philippines through  its appropriate 
committees on a yearly basis.  
9. Can foreign companies participate without limitations in any tenders?  
Response : 
Foreign companies may participate in the procurement of goods, civil works or  
infrastructure projects or consulting services.  
In the procurement of goods,  foreign bidders may be eligible to participate under any of 
the following circumstances: (a) When provided for under any  Treaty or International 
or Executive Agreement as provided in Section 4 of the RA 9184 and its IRR; (b) When 
the foreign supplier is a citizen, corporation or association of a country, which grant 
reciprocal rights or privileges to citizens, corporations or associations of the Philippines; 
(c) When the goods sought to be procured are not available from local  suppliers; or 
d) When there is a need to prevent situations that defeat competition or restrain trade.  
In the procurement of civil works or infrastructure projects, foreign bidders may be 
eligible to participate when provided for under any Treaty or Inter national or Executive 
Agreement as provided in Section 4 of the RA 9184 and its IRR. Likewise, joint 
ventures/consortia in which Filipino ownership or interest is less than seventy -five 
percent (75%) may be eligible where the structures to be built require  the application of 
techniques and/or technologies which are not adequately possessed by Filipinos and 
that Filipino ownership or interest shall not be less than twenty -five percent (25%).  
In the procurement of consulting services, foreign consultants may be hired in the event 
Filipino consultants do not have the sufficient expertise and capability to render the 
services required under the project, as determined by the Head of the Procuring Entity.  
Foreign consultants may be eligible to participate in the procurement of consulting 
services, subject to the following qualifications: (a) must be registered with the 
Securities and Exchange Commission (SEC) and/or any agency authorized by the laws of 
the Philippines; and (b) when the types and fields of consulti ng services in which the 
foreign consultant wishes to engage involve the practice of regulated professions, the 
foreign consultant must be authorized by the appropriate GOP professional regulatory 
body to engage in the practice of those professions and all ied professions: Provided, 
however, that the limits of such authority shall be strictly observed.  
10. Does the Philippines own any compensation mechanisms as set out in the revised GPA, even 
if they are not part of said Accord?  
Response : 
RA 9184 does not h ave a provision for compensation arising from domestic review 
procedures similar to that provided in the 2012 Revised WTO -GPA. However, damages 
may be awarded by any court of competent jurisdiction.  
11. Does a Green Procurement policy exist? If so, how is it implemented?  
Response : 
The Philippines has a green procurement policy. It is being implemented using existing 
legal framework. First sets of common use supplies and equipment and non -common 
use supplies and equipment have been identified and prioritized , the green criteria for 
which have been developed for use of procuring entities. Part of the implementation is 
communication and awareness for the GPPB program and monitoring.  WT/TPR/M/3 68/Add.1  
 
- 63 - 
 
  12. Is it possible to register suppliers from abroad?  
Response : 
 
Yes. The PhilG EPS includes features for the registration of foreign bidders.  
SINGAPORE  
3.3 Measures Affecting Production and Trade  
 
1. We note that the Secretariat included an overview of incentives in its report for the 
Philippines’ last TPR in 2012. However, the prese nt report does not have a section addressing 
“incentives”. Has there been a change in the Philippines’ use of incentives to facilitate production 
and trade?  
 
Response : 
 
There has been no change since the 2012 Philippines’ TPR. The Fiscal Incentives 
Rationalization Bill mentioned in the last TPR was not passed by Congress. There is 
currently a bill on Tax Reform for Acceleration and Inclusion (TRAIN) 2 where outdated 
provisions on incentives and incentives administration in the existing investments la ws 
will be or amended eliminated taking into consideration the current business models 
and engagements in free trade arrangements. Once the law is passed, we will notify as 
appropriate.  
 
4.5.3.1 – Aviation  
 
Paragraph 4.114 (Page 79)  
 
2. The report notes that the Philippines requires the dual approval of tariffs in all its air services 
agreements. Does the Philippines have any plans to ease such requirements to grant airlines more 
operational flexibility?  
 
Response : 
 
There are currently no plans by the Phi lippines to remove the requirement of dual 
approval of tariffs in its air services agreements.  The Philippines, through the Civil 
Aeronautics Board (CAB), requires all tariffs for commercial air services to be approved, 
as provided for under its charter, although there may already be an approval issued by 
an airlines’ own state with respect to their tariff fares and other charges.  
 
While Executive Order (EO)219 liberalized the airline industry, such policy remains 
consistent with Republic Act (RA) 776 whi ch mandates the CAB to determine and fix 
fares or adopt and approve fares proposed by an airline, if the Board finds that the 
proposed fare or rate is not unduly discriminatory, unduly preferential, and 
unreasonable.  
THAILAND  
PART I: QUESTIONS REGARDING T HE SECRETARIAT REPORT  
 
3 TRADE POLICIES AND PRACTICES BY MEASURE  
 
3.1 Measures Directly Affecting Imports  
 
3.1.1 Customs procedures, valuation, and requirements  
 WT/TPR/M/3 68/Add.1  
 
- 64 - 
 
  Paragraph 3.3 “Bureau of Customs' administrative order (AO) No. 243 of January 2010 makes pre -
shipment inspection (PSI) mandatory for all bulk or break bulk cargo. PSI covers quantity, quality, 
and tariff classification. Six companies have been approved by the Bureau of Customs to provide 
this service. For other goods, no PSI is required”   
 
Since the Philippines is a member of World Trade Organization (WTO) and has been 95th country 
that already ratified Trade Facilitation Agreement (TFA) under WTO, which specify in Article 10 
FORMALITIES CONNECTED WITH IMPORTATION, EXPORTATION AND TRANSIT ; sub -article 5.1 
“Member shall not require the use of pre -shipment inspection in relation to tariff classification and 
customs valuation”, and sub -article 5.2 “Without prejudice to the rights of Members to use other 
type of pre -shipment inspection not cov ered by paragraph 5.1, Member are encouraged not to 
introduce or apply regarding their use”  
 
Could Philippines please clarify the reason to introduce pre -shipment inspection measure on all bulk or 
break bulk cargo? Is this measure consistence to TFA princi ple? 
 
Response : 
 
The Philippines considers Administrative Order No. 243 as implemented by CMO No. 18 -
2010 to be consistent with the provisions of the Trade Facilitation Agreement, 
specifically Article 10 Sub -article 5.1.   The requirement of a load port su rvey (LPS), is 
not for the purpose of determining the actual value and classification of the goods.  
Instead, the LPS is only for the purpose of accurately ascertaining the actual quantity 
and quality of the bulk or break -bulk cargo that it covers.  
 
3.1.3 Tariffs  
 
3.1.3.2 Tariff quotas  
 
Paragraph  3.18. “In 2005, the Philippines was granted by the Committee on Market Access a 
seven -year extension, until 30 June 2012, to maintain a quota on rice imports.8 In 2012, the 
Philippines was granted another five -year extension until 30 June 2017.9 As at November 2017, 
the situation relating to rice imports was governed by Executive Order 23 of 24 May 2017 which 
extended the rice waiver until 30 June 2020 or until an amendment of the provisions governing 
rice tariffica tion is enacted.”  
 
As at November 2017, the Philippines extended the Minimum Access volume of rice until 30 June 
2020 or until an amendment of the provision governing rice tariffication is enacted. In this regard, 
when will the Philippines inform the exten sion of such rice waiver to WTO members and the details 
of the agreement for such waiver?  
 
Response : 
 
The Philippines will inform members of the tariffication of rice as soon as the law is 
enacted. Currently, the proposed amendments are undergoing the legi slative process at 
both the Lower and Upper House of Congress.  
 
3.1.5 Import prohibitions, restrictions, and licensing  
 
Paragraph 3.31.  “The Philippines prohibits the importation of certain goods under the Tariff and 
Customs Code and various other laws (Box 3.1). The list of products subject to an import 
prohibition has remained largely unchanged since the Philippines last TPR. The Philippines notified 
its import prohibitions to the WTO”  
 WT/TPR/M/3 68/Add.1  
 
- 65 - 
 
  
Could the Philippines explain the changes of import prohibition i n the list of products? (Box 3.1)  
 
Response : 
 
Thailand may note that as indicated in the Secretariat Report, there are no changes in 
the import prohibition in the list of products.  
 
Paragraph 3.32.  “A vast range of goods is subject to licences or permits w hen imported. For certain 
products, multiple permits or licences are required, and informal payments have been reported by 
the business community. The import licensing regime is regulated mainly by the Customs 
Modernization and Tariff Act of 30 May 2016. I mport licensing is intended, inter alia, to safeguard 
public health, national security and welfare, and to meet international treaty obligations regulating 
certain products. Costs for the licence or permit depend on its validity period, the product, and 
import quantities; additional inspection fees may also apply”  
 
Could the Philippines define and give an example of informal payments?  
 WT/TPR/M/3 68/Add.1  
 
- 66 - 
 
  Response : 
 
The Philippines does not authorize the collection of informal payments in all its 
agencies. All fees and payments made must be pursuant to a valid assessment and 
evidenced by an official receipt.  
 
Could the Philippines describe import licensing procedures for used motor vehicles and other 
related products?  
 
Response : 
 
Executive Order No. 156 prohibits the importation of used vehicles, subject to certain 
exemptions, such as importations made by returning residents, diplomats, consuls, and 
those that may be authorized by the Department of Trade and Industry (DTI) such as 
trucks and motor vehicles for industri al use.  Prior authority can be obtained from the 
Bureau of Import Services -DTI after the filing of the application form and requirements 
to demonstrate the conditions as stated above.  
 
Please provide further information on the Customs Modernization and Ta riff Act, what products are 
subjected to the regulation and what are the requirements?  
 
Response : 
 
Under Section 119, the following are considered restricted importation and exportation:  
 
a) Dynamite, gunpowder, ammunitions and other explosives, firearms and weapons of war, 
or parts thereof;  
 
b) Roulette wheels, gambling outfits, loaded dice, marked cards, machines, apparatus or 
mechanical devices used in gambling or the distribution of money, cigars, cigarettes or 
other goods when such distribution is dependent on chance, including jackpot and pinball 
machines or similar contrivances, or parts thereof;  
 
c) Lottery and sweepstakes tickets, except advertisements thereof and lists of drawing 
therein;  
 
d) Marijuana, opium, poppies, coca leaves, heroin or 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;  
 
e) Opium pipes or parts thereof, of whatever material; and  
 
f) Any other goods whose importation and exportation are restricted.  
 
The requirements for the issuance of an import license for a regulated product is determined by 
the regulating agency as indicated in the Philippines’ notification, namely WTO document 
G/LIC/N/3/PHL/12.  
 
According to the phrase “Cost for the licence and permit depend on its validity period, the product, 
and import q uantities; additional inspection fees may also apply”. Please provide further 
clarification of the additional inspection that might be required.  
 
Response : 
 
The additional inspection fees are indicated in the WTO document G/LIC/N/3/PHL/12 
dated 19 October 2016 (Replies To Questionnaire On Import Licensing Procedures - 
Notification Under Article 7.3 Of The Agreement  On Import Licensing Procedures – 
2016)  
 
3.3 Measures Affecting Production and Trade  WT/TPR/M/3 68/Add.1  
 
- 67 - 
 
  
 
3.3.7 Other measures  
 
Paragraph  3.116.  “The Biofuels Act o f 2006 (RA 9367) establishes local content requirements for 
gasoline, which must have a minimum content of locally produced biofuel and biodiesel.”  
 
The biofuels Act of 2006 established local content requirements for gasoline, which must have a 
minimum con tent of locally produced biofuel and biodiesel. We would like to ask Philippines to 
elaborate more details of this measure.  
 
Response : 
 
The additional inspection fees are indicated in the WTO document G/LIC/N/3/PHL/12 
dated 19 October 2016 (Replies To Ques tionnaire On Import Licensing Procedures - 
Notification Under Article 7.3 Of The Agreement  On Import Licensing Procedures – 
2016)  
 
Republic Act (RA) No. 9367 or the Biofuels Act of 2006 was implemented to increase the 
contribution of biofuels in the count ry’s energy mix thereby reducing its dependence on 
imported fossil -based fuels, enhance the quality of the environment, and create 
opportunities for countryside socio -economic development.  
 
From the medium to long -term, the Department of Energy together wi th the National 
Biofuels Board will embark on revisiting/re -evaluating the blending requirement.  
 
4 TRADE POLICIES BY SECTOR  
 
4.1 Agriculture  
 
4.1.3 Domestic support  
 
According to the table 4.1, showed the price support expenditures of Philippines to agriculture 
product (rice, pig meat and poultry meat) were more than 10% of value of production as shown in 
the same table. Could Philippines explain more details about method of price support scheme?  
 
Response : 
 
This is an issue of different methodologies  for calculating subsidies/supports by the 
OECD and the WTO.   The OECD defines Producer Support Estimate (PSE) as the WT/TPR/M/3 68/Add.1  
 
- 68 - 
 
  monetary value of gross transfers from consumers and taxpayers to agricultural 
producers, arising from policy measures that support agric ulture, regardless of their 
nature, objectives or impacts on farm production or income.  Whereas 
subsidies/supports under the WTO Agreement of Agriculture (AOA) are essentially 
classified according to exempt (the Green Box, Blue Box and Development Box) an d 
non-exempt measures (or trade -distorting support i.e. the Aggregate Measure of 
Support (AMS).    
 
With respect to the calculation of market price support (MPS), the OECD calculation is 
based on the most recent reference period while the WTO calculation i s based on the 
1986 -88 reference period or as indicated in the WTO accession of a Member.   
 
Thus, the aforementioned fundamental differences strongly suggest that the OECD 
method cannot be an accurate representative of the WTO method, and vice versa.  
  
As far as the WTO is concerned, the Philippines ONLY provided public stockholding -
related market price support to rice covering no more than 2% of the annual production 
in 2012 -2016, and this level was less than the 10% of the annual value of production of 
paddy in the same period (please refer to the ST DS:4 and DS:5 notifications of the 
Philippines).  
 
4.1.5 Rice 
 
Paragraph  4.15.  “As a result of the Uruguay Round, the Philippines obtained the right to defer 
temporarily the tariffication of its import restrictions on rice (Special Treatment – Annex 5 of the 
Agreement on Agriculture). This exception allowed the Philippines to mainta in quantitative 
restrictions (QRs) on rice imports for 10 years until 30 June 2005, together with a bound minimum 
access quota for rice; the out -of-quota tariff remained unbound. The special treatment was 
extended until 30 June 2012, and subsequently the W TO General Council granted, upon request by 
the Philippines, a further extension until 30 June 2017.21 The Philippines agreed to tariffy the 
quantitative restrictions on rice upon the expiry of the waiver. According to the authorities, the 
House of Represe ntatives is currently [October 2017] reviewing a consolidated bill that would allow 
for tariffication of the QR on rice, and the Philippine executive branch is working closely with both 
Houses of Congress in the finalization of the bill, as the President o rdered the passage of the rice 
tariffication law to be expedited.”  
 
Response : 
 
Could Philippine please inform the progress and method of tariffication of its import 
restrictions on rice?  
 
At the Lower House of Congress, the bill to amend RA 8178 is under d eliberation by the 
Committee on Appropriations before being submitted to the Plenary for approval. At the 
Upper House of Congress, a version of the bill is being deliberated by the Senate 
Committee on Agriculture and Food. Both Houses will transmit the bil l to the Bicameral 
Conference Committee for a final bill to be approved.  
 
The approved version of the bill will then be transmitted to the Office of the President 
for approval. Note that both the Legislative and Executive branches of Government have 
given priority to this proposed legislation.  
 
4.3 Energy  
 
4.3.2 Electricity  
 
The National Tourism Development Plan of the Government of the Republic of the Philippines 
attaches importance to tourism with the view to promote social and economic development.  
 
At the meetings between the Leaders of Thailand and the Philippines, both sides have agreed to 
promote joint tourist destinations and cruise tourism between Thailand and the Philippines. 
However, these ideas have not yet been translated into concrete outcome.  
 WT/TPR/M/3 68/Add.1  
 
- 69 - 
 
  The Thai side would appreciate the Philippines side informing whether the National Tourism 
Development Plan has included plans on tourism cooperation with external countries in areas such 
as joint tourist destination and cruise tourism.  
 
Response : 
 
Cruis e and nautical tourism has been identified as of the nine (9) tourism product 
portfolio under the National Tourism Development Plan (NTDP) 2016 – 2022.  
 
In accordance with the NTDP, the Department of Tourism developed a National Cruise 
Tourism Development Strategy and Action Plan 2016 – 2022. The strategy aims to 
provide direction to both government and the private sector to build the number of 
cruise ship calls to ports and islands of the Philippines, create excellent guest 
experience, increase economic be nefits and promote sustainable tourism.  
 
The strategy has highlighted that in cruise tourism, itineraries that combine neighboring 
countries work best. The Philippines and certain close neighbors will be stronger if they 
work together than by working alon e. As stated in the strategy, the Philippines may 
cooperate with countries from North and Southeast Asia to create cruise tourism 
itineraries.  
 
4.4 Manufacturing  
 
Paragraph  4.64.  “A variety of incentives are offered to assist manufacturing industries. Acco rding 
to a number of industrial censuses and surveys by the Philippine Statistics Authority (PSA), the top 
industries in terms of utilizing the incentive measures provided by the Government, such as special 
grants, tax exemptions, and tax privileges, are p arts and accessories for motor vehicles and their 
engines, electronic components, and textiles.”  
 
Could the Philippines clarify the incentive measures such as special grants, tax exemptions, and 
tax privileges? Moreover, please identify the rules and regul ations which apply to those incentive 
measures.  
 
Response : 
 
In the Census of Philippine Business and Industry (CPBI) conducted by the Philippine 
Statistics Authority, the incentive measures enumerated in the survey form were not 
clearly defined as well as the regulations covering the enumerated measures. This 
portion of the survey is to be reviewed with the relevant government agencies.  
 
4.5 Services  
 
4.5.2 Telecommunications  
 
Paragraph 4.101  “Telecoms services are regarded as a public utility, and foreign equity in telecoms 
companies (both public (i.e. basic) and value added) is limited, by the Constitution as well as the 
Public Service Act, to 40%. The authorities indicated that, according to  a Department of Justice 
opinion, if the service is not provided directly to consumers or the public, then the 40% limit does 
not apply….”  
 
Does the Philippines has any plan to increase the foreign equity participation in 
telecommunications services to be  higher than 40%?  
Response : 
The Philippines can confirm the legislative initiative to increase the foreign equity 
participation in the telecommunications services to be higher than 40%. The Congress 
adopted House Bill 5828 in 2017, amending the Public Serv ices Act which will provide a 
more precise definition of what constitute a public utility and should allow for greater 
foreign participation in sectors such as transport and telecommunication. Hearings are 
also being conducted in the Senate on the bill ame nding the Public Service Act.  WT/TPR/M/3 68/Add.1  
 
- 70 - 
 
  Paragraph 4.108  “The NTC sets tariffs for telecoms providers. However, if a service has sufficient 
competition to ensure fair and reasonable rates or tariffs, the NTC may exempt the service from its 
rate or tariff regulations.  The authorities did not clarify the criteria used to determine “sufficient 
competition”, or which providers’ tariffs are currently regulated.”  
Since the report states that “The authorities did not clarify the criteria used to determine 
“sufficient competi tion. How does the Philippines guarantee that the regulations on tariff are non -
discrimination?  
Response : 
The NTC acts to establish rates and tariffs which are fair and reasonable and which 
provides for the economic viability of public telecommunications e ntities and a fair 
return on their investments considering the prevailing cost of capital in the domestic 
and international markets.  It has residual power to regulate rates and tariff when 
ruinous competition results or when a monopoly or cartel or combin ation in restraint of 
free competition exists. The NTC may either establish a floor or a ceiling on the rates or 
tariffs.  It has set rates ceiling for most of the services. Rates for all value added 
services are deregulated.  
4.5 Services  
 
4.5.4 Tourism  
 
Thailand welcomes the electricity liberalization policy of the Philippines. The Thai private sectors 
have invested in the electricity sectors of the Philippines such as in Quezon province. Some 
companies have experienced difficulties in investing in the reg ion. 
 
The Thai side would appreciate the Philippines side informing on the coordination with and the 
enforcement of the national electricity liberalization policy on the local government.  
Response : 
The President issued Executive Order (EO) No. 30 signed on  28 June 2017, classifying 
energy projects to be of national significance, and thus, processes of licensing and 
permitting on their implementations shall be harmonized and streamlined.  
One of the most salient provisions of the EO sets for the creation of a n Energy 
Investment Coordinating Council (EICC) that will spearhead and coordinate national 
government efforts to harmonize, integrate and streamline regulatory processes, 
requirements and forms relevant to the development of energy investments in the 
coun try. 
EO 30, may address the concerns of Thai investors pertaining to the tedious process of 
securing permits and approvals.  
As mandated in the Electric Power Industry Reform Act of 2001 (EPIRA), the 
Department of Energy has continuing activities on Informa tion, Education and 
Communication (IEC) Campaign on the EPIRA implementation.  All the policy issuances 
are also being subjected to public consultations.  In these activities, the Local 
Government Units (LGUs) are being invited to participate and provide t heir 
inputs/recommendations and be informed of the national policies particularly on power 
sector development.  
PART II: QUESTIONS R EGARDING THE GOVERNM ENT REPORT  
Structural Reforms (Page 5)  
 
Paragraph 2.5.  In line with the infrastructure investment agenda,  the Build Build Build (BBB) Program 
was launched in 2016 to accelerate infrastructure development and investment to support economic 
and social growth. The BBB identified high impact projects to be implemented within and outside the 
National Capital Regio n such as railways, urban mass transport, airports and seaports, roads and 
bridges, among others. The programme is set to roll until 2022 envisioning the increase of productive 
capacity of the economy, create jobs, increase incomes, and strengthen the inve stment climate leading 
to sustained inclusive growth.  WT/TPR/M/3 68/Add.1  
 
- 71 - 
 
   
According to paragraph 2.5., since the BBB program is considered a long -term project which may 
require a national budget for the period of at least 2 -3 years, please clarify the approach of BBB 
project  which the Philippines intend to be a government investment project or allow participation 
from private sectors to invest as a PPP (Public Private Partnership) project? And if it possible for 
private participation, would it be possible for foreign companie s to participate in tender?  
 
Response : 
 
The Constitution does not prohibit the entry and participation of foreign corporations in 
the Philippine economy. In the procurement of government infrastructure projects 
under RA 9184 or the Government Procurement R eform Act (GPRA), the Law allows the 
participation of the following persons/entities in the bidding of infrastructure projects:  
 
 Duly licensed Filipino citizens/sole proprietorships;  
 Partnerships duly organized under the laws of the Philippines and of whi ch at 
least seventy -five percent (75%) of the interest belongs to citizens of the 
Philippines;  
 Corporations duly organized under the laws of the Philippines, and of which at 
least seventy -five percent (75%) of the outstanding capital stock belongs to 
citizens of the Philippines;  
 Cooperatives duly organized under the laws of the Philippines; or  
 Persons/entities forming themselves into a joint venture, i.e., a group of two (2) 
or more persons/entities that intend to be jointly and severally responsible or 
liable for a particular contract: Provided, however, That in accordance with Letter 
of Instructions No. 630 (LOI 630), Filipino ownership or interest of the joint 
venture concerned shall be at least seventy -five percent (75%): Provided, 
further, That joint  ventures in which Filipino ownership or interest is less than 
seventy -five percent (75%) may be eligible where the structures to be built 
require the application of techniques and/or technologies which are not 
adequately possessed by a person/entity meeti ng the seventy - five percent 
(75%) Filipino ownership requirement: Provided, finally, That in the latter case, 
Filipino ownership or interest shall not be less than twenty -five percent (25%). 
For this purpose, Filipino ownership or interest shall be based on the 
contributions of each of the members of the joint venture as specified in their 
JVA. 
 
In the procurement of infrastructure or development projects covered under the Build -
Operate -Transfer (BOT) Law, or RA 6957 (as amended by RA 7718), the Law provid es 
that any individual, partnership, corporation or firm, whether local or foreign, including 
consortia of local, foreign or local and foreign firms, may participate or apply for pre - or 
simultaneous qualification for projects covered under the provisions of the Act and its 
Revised IRR, subject to the f legal requirements.  
 
For projects to be implemented through a contractual arrangement requiring a public 
utility Franchise for its operation but where the Project Proponent and Facility Operator 
may be two separate and independent entities, the Facility Operator must be a Filipino 
or, if a corporation, must be duly registered with the Securities and Exchange 
Commission (SEC) and owned up to at least sixty percent (60%) by Filipinos.  
 
According to paragraph 2 .5., how many projects that the Philippines has already implemented 
since the BBB program has launched in 2016? And how much does it cost to implement each 
project?  
 
Response : 
 
Below are the projects and the corresponding estimated cost implemented under the 
BBB Program. Other details can be accessed from the BBB Program website 
(www.build.gov.ph/Home/Project ). WT/TPR/M/3 68/Add.1  
 
- 72 - 
 
   
 
Project Name  Implementing  
Agency  Sector  Budget  Start Date  
1.  Central Luzon Links 
Expressway  DPWH  Roads and Bridges  P14,940,000,000  2016/05/01  
2.  Laguna Lake 
Highway  DPWH  Roads and Bridges  P418,000,000  2016/01/04  
3.  Cavite Barge 
Gateway Terminal  DOTr Seaports  US$30,000,000  2017/04/21  
4.  Bacolod Economic 
Highway  DPWH  Roads and Bridges  P5792,090.037  
 2017/02/09  
5.  Pigalo Bridge  DPWH  Roads and Bridges  P437,067,224  2017/04/01  
6.  Davao City By -pass DPWH  Roads and Bridges  P19,810,000,000  2018/01/01  
 
Enhancing Competition Policy and the Regulatory Environment (Page 6)  
 
Paragraph 2.9. To promote foreign participation in the banking and financial sectors, Republic Act 
10641 (an Act Allowing the Full Entry of Foreign Banks in the Philippines) was signed into law on 
July 2014, amending provisions of Republic Act 7721 (an its establish ment, the Philippines has 
approved the entry of foreign banks from Japan, the Republic Act of Liberalizing the Entry and 
Scope of Operations of Foreign Bank in the Philippines) signed in 1994. The law further opened up 
the banking sector to more offshore p layers. Since of Korea, Chinese Taipei and Singapore.  
 
According to paragraph 2.9., it is understood that the Philippines aimed to promote foreign 
participation in banking and financial sectors by allowing the entry of foreign banks in the 
Philippines. In this regard, does this effort affect the financial stability of the Philippines after this 
act allow foreign persons to own 100% locally incorporated subsidiaries and abolishes restrictions 
on the licensing of branches of foreign banks with respect to the entry period, total number of 
entrants, and location of sub -branches? And how the Philippines manage its domestic financial 
system to prevent the emergence of financial turmoil?  
 
Response : 
 
The Philippines, through the Bangko Sentral ng Pilipinas (BSP), re mains mindful that 
banking integration carries the risk of contagion and financial instability. Rapid credit 
growth, financial innovation and development when poorly supervised or unregulated 
can, in some cases, negatively affect macroeconomic stability.  Poor risk management, 
overexposure to cyclical economic activities, weak governance, and directed and 
connected lending are also some of the other potential financial stability risks.   
 
To address these, the BSP instituted a comprehensive policy reform ag enda to timely 
identify and mitigate the buildup of systemic risks. This agenda consists of corporate 
governance reforms, periodic review of the BSP’s risk management guidelines to align 
with international standards, and adopting the Basel III Reform packa ge taking into 
account local market conditions.  In addition, in order to reap the opportunities and 
benefits of an increasingly integrated financial market, the BSP is working with 
counterpart regulators on complementary initiatives to strengthen the stab ility of the 
banking system. These are in the areas of capital and foreign exchange markets and 
financial activities of nonbanks.  
 
According to aforementioned act., does the Philippines allow more labour mobility such as 
professional banker  which will ent er to the Philippines after this act has launched ?  
 
Response : 
 
The Philippines can confirm that the Act allows more labour mobility for professional 
bankers. Article 40 of the Labor Code (Presidential Decree No. 442, as amended) requires 
all aliens/foreig n nationals seeking admission to the Philippines for employment purposes 
and all domestic or foreign employers who desire to engage a foreign national for 
employment in the Philippines to obtain an employment an Alien Employment Permit 
(AEP)  from the Depa rtment of Labor and Employment (DOLE).  WT/TPR/M/3 68/Add.1  
 
- 73 - 
 
   
 One of the requirements for the issuance of an AEP under DOLE Department Order No. 
146-15 is the submission of a copy of the bank’s understudy training program (UTP) to be 
conducted by the applicant foreign nationa l to transfer knowledge and/or skills to the 
Filipino worker. The UTP is no longer required for the banking sector.  This exemption has 
allowed professional bankers to enter the Philippines.  
UKRAINE  
2 TRADE AND INVESTMENT REGIMES  
 
2.4 Investment Regime  
 
Page 27 (Para 2.27)  
 
The Report says that “The Philippines continues to restrict foreign investment in a number of 
activities including agriculture, fisheries, telecom services, and public utilities, but it has also taken 
some liberalizing steps.”  
 
Could the Philippines please clarify what liberalizing steps the Government has taken to open 
economic sectors for attracting foreign direct investment (FDI)?  
 
Response : 
 
Laws have been passed and/or amended since the Philippines’ last Trade Policy Review 
in 201 2 in order to remove restrictions on foreign investments. These include: 
1) allowing the full entry of foreign banks in the Philippines; 2) lifting of the cabotage 
restrictions imposed on foreign operators; and 3) opening up of various professional 
service s, subject to certain exceptions and reciprocity.  
 
The President provided guidance through Memorandum Order No. 16, s. 2017, on the 
priority investment areas or activities where current equity restrictions will be reviewed. 
These include the following:  
 
1. Private recruitment, whether for local or overseas employment;  
2. Practice of particular professions, where allowing foreign participation will 
redound to the public benefit;  
3. Contracts for the construction and repair of locally -funded public works;  
4. Public ser vices, except activities and systems that are recognized as public 
utilities such as transmission and distribution of electricity, water pipeline 
distribution system, and sewerage pipeline system;  
5. Culture, production, milling, processing, and trading excep t retailing, of rice and 
corn and acquiring by barter, purchase or otherwise, rice and corn and the by -
products thereof;  
6. Teaching at higher education levels;  
7. Retail trade enterprises; and  
8. Domestic market enterprise.  
 
There is an ongoing review of the 1987 Constitution by a 25 -member Committee created 
by the President through Executive Order No. 10.  The Committee is expected to 
complete its review in six months or until June this year. It will submit its 
recommendations and proposals to the President, who w ill transmit these to Congress.  
 
Page 27 (Para 2.28)  
 
According to the Report the “regular” Foreign Investment Negative List (FINL) of areas/activities, 
where FDI is limited, is subject to review every two years to reflect any new legislation amending 
or repealing laws affecting investment. The authorities expected the eleventh FINL to be issued in 
2017.  
 
 Would the Philippines elaborate on the state of play as regards of the eleventh FINL?  
 WT/TPR/M/3 68/Add.1  
 
- 74 - 
 
   In which areas/activities is FDI limited at the present time according to the List A and the 
List B of the FINL?  
 Does the Philippines have any plans to reduce the existing restrictions to foreign 
investments in any areas/activities?  
 
Response : 
 
The draft 11th Regular Foreign Investment Negative List is under consideration and 
awaiting approval by the NEDA Board.  
 
Until such time that the 11th RFINL is approved and issued, Executive Order no. 184 
series of 2015 promulgating the 10th   RFINL will still prevail.  
 
The Philippines can confirm plans to reduce the existing restrictions to foreign 
investments in specific areas and activities. Kindly refer to the response above related to 
the Secretariat Report Paragraph 2.27 for these areas and activities.  
 
 
3 TRADE P OLICIES AND PRACTICES BY MEASURE  
 
3.1 Measures Directly Affecting Imports  
 
3.1.1 Customs procedures, valuation, and requirements  
 
Page 30 (Para 3.2)  
 
The Report states that “All imports with a dutiable value above PHP 10,000 must be declared 
electronicall y. However, hardcopies of import documents and attachments must be submitted to 
the Entry Processing Unit for verification. The customs entry declaration form, which was changed 
to Single Administrative Documents (SAD) under Customs Memorandum Order (CMO) 29-2015, 
must be accompanied by: the commercial invoice; a bill of lading or air waybill; a packing list; and 
a certificate of origin if applicable. Depending on the product, an import licence (Section 3.1.5) or 
SPS or TBT certificate (Section 3.3.2) may a lso be required.”  
 
 Would the Philippines kindly inform if it intends to eliminate the requirement concerning 
submission of hardcopies of import documents and attachments for verification?  
 
 What possible measures does the Philippines implement to allow electronic submissions of 
needed documents by importers?  
 
Response : 
 
The Philippines is working towards a paperless environment in customs procedures. 
Through the Bureau of Customs, it is mandated under Section 109 of the Customs 
Modernization and Tariff A ct to utilize information and communications technology (ICT) 
to enhance customs control and to support a cost -effective and efficient customs 
operations geared towards a paperless environment. For purposes of customs 
procedures, electronic documents, perm its, licenses or certificate shall be acceptable 
and shall have the legal effect, validity or enforceability as any other document or legal 
writing.  
 
The Philippines is currently in the process of improving its automated system for 
processing import cleara nces in line with the national program to enhance the National 
Single Window. The TradeNet system is being prepared for live operation by the middle 
of 2018.  This will allow parties involved in trade to lodge information and documents to 
fulfill all impor t, export and transit -related regulatory requirements.  
 
In the meantime,  the Food and Drug Administration (FDA) of the Department of Health 
has instituted an electronic system for the processing of import authorization (License 
to Operate and Certificate of Product Registration).   A License to Operate (LTO) as food 
distributor -importer needs to be secured from the FDA while a Certificate of Product WT/TPR/M/3 68/Add.1  
 
- 75 - 
 
  Registration (CPR), a pre -market approval certificate, needs to be obtained for each and 
every product prior to importation. The electronic system for the processing of import 
author ization can be accessed through the FDA website ( https://www.fda.gov.ph ) 
e-portal.  
 
Page 30 (Para 3.5)  
 
The Report notes that “Shipments are classified according to risk. Risk criteria include country of 
origin and fr equency of imports. Goods in the high risk “red lane” are subject to physical 
examination and documentary review; this requires an average of 1 -2 days for clearance. The 
moderate risk “yellow lane” (documentary review only) requires an average of four hour s for 
clearance. The BOC also uses a “blue lane” (SGL) for qualified importers to provide immediate 
clearance. According to the BOC, in 2017 about 50% of all consignments were classified as red, 
followed by yellow (30%), and blue (20%).”  
 
Could the Philipp ines kindly elaborate more on risk criteria, according to which shipments are 
classified into “red, yellow and green lane” categories?  
 
Response : 
 
The risk criteria or parameters are confidential in nature as it is in an integral part of the 
Bureau of Customs’ over -all strategic and operational policies and practices. The Risk 
Management Office is tasked to continuously update the risk criteria or parameters 
based largely on seizure cases, registration of new consignees and other relevant 
information.  
 
The Bureau of Customs utilizes a selectivity system with risk profiles established from 
risk analysis and assessment. The risk profiles encompass various indicators such as 
type of goods, compliance record of traders, values of goods and applicable duties,  
destination and countries of origin, mode of transport, routes of transport based on 
characteristics displayed by unlawful consignments and offenders.  
 
3.3 Measures Affecting Production and Trade  
 
3.3.2 Sanitary and phytosanitary requirements  
 
Page 48 ( Para 3.73 b)  
 
The Report notes that “Import consignments of food (other than processed and pre -packaged) 
require a permit (“SPS import clearance”) issued by the Department of Agriculture. Prior to arrival, 
an Import Notification Document is required, on th e basis of which the need for inspections, 
including lab testing, is determined by the DA or the DoH.”  
 
 Ukraine would appreciate if the Philippines could elaborate on the recent developments in 
procedures for testing of domestically produced meat.  
 
 Could t he Philippines also inform on relevant administrative orders which provide for 
testing of domestic and imports products (please, shortly describe provisions of 
appropriate orders)?  
 
Response : 
 
The assessment of the microbiological identification for both l ocally produced and 
imported meat is guided by National  Meat  Inspection  Service's (NMIS) Memorandum 
Circular No.9 -2008 -5 Series of 2008 “Guidelines on the Assessment of Microbiological 
Quality of Fresh, Chilled and Frozen Meat”.   
  
For local meat surveilla nce, the applicable guideline is the Department of Agriculture's 
Administrative Order  No. 24, Series of 2009 “Implementing Guidelines on the National 
Veterinary Drug Residues Control Program in Foods pursuant to AO No. 14 Series of 
2006”.  
 WT/TPR/M/3 68/Add.1  
 
- 76 - 
 
  For imported mea t surveillance, the applicable guideline is the NMIS'  Memorandum 
Circular No. 05 -2017 -009 “Surveillance Program for Imported Meat”  on the creation of a 
surveillance program for imported meat. The laboratory examination of imported meat 
shall include (but n ot limited to) Microbial Analysis, Screening of Antimicrobials and 
Meat Species Identification.  
 
4 TRADE POLICIES BY SECTOR  
 
4.5 Services  
 
4.5.1 Financial services  
 
4.5.1.1 Banking  
 
Pages 7 2 - 75 (paragraphs 4.69 - 4.86)  
 
The Report describes particularities of the Philippines' banking sector and the state of its 
development.  
 
 Would the Philippines kindly share information concerning assessment of the ownership 
structure, business reputation and financial condition of a bank by the Bangko Sentr al ng 
Pilipinas (hereinafter - BSP), in particular relating to requirements to transfer of significant 
ownership/control in the regulated entities; indicators of non -transparency of the 
ownership structure?  
 
 Could the Philippines further elaborate on proce dures for authorization of both universal 
and commercial banks and also rural and cooperative banks in the Philippines, including 
key requirements to applicants and approval procedures?  
 
Response : 
 
The Philippines, through the Bangko Sentral ng Pilipinas ( BSP),  identifies and 
determines the suitability of major shareholders, including ultimate beneficial 
shareholders as well as other persons or entities that may exert significant influence4 on 
a bank, pursuant to Section 8 of R.A. No. 8791, The General Ban king Law of 2000.  
Section 8 incorporates into the bank licensing process an assessment of the bank's 
ownership structure, directors and senior management, its operating plan, internal 
controls as well as projected financial condition and capital base.   
 
The BSP also looks into compliance by a bank with the prescribed ownership ceilings and 
subjects to prior Monetary Board (the governing body of the BSP) approval of any 
transaction which will result in ownership or control by any person of more than twenty  
percent (20%) of voting shares of stock of a bank, or effect a change in the majority 
ownership or control of the voting shares of stock of the bank from one (1) group to 
another. In the process of evaluation, supervisors make use of their knowledge and a ll 
available information about the investor to determine transparency and appropriateness 
of information disclosed.  Administrative sanctions, notwithstanding criminal charges, 
may be filed against a Corporate Secretary who willfully discloses false or mis leading 
statements of the list of stockholders and their stockholdings in the ultimate beneficial 
owners of bank shares held in the name of Philippine Central Depository (PCD) Nominee 
Corporation.  
 
Under R.A. No. 10641, foreign banks may operate in the Phi lippines through any one (1) 
of the following modes of entry:  
 Mode 1:  By acquiring, purchasing or owning up to 100 percent of the voting 
stock of an existing domestic bank;  
 
 Mode 2: By investing in up to 100 percent of the voting stock of a new banking 
subsidiary incorporated in the Philippines;  
 
                                                
4 Number 6 of Essen tial Criteria, Principle 3 of the Basel Core Principles for Effective Banking Supervision  WT/TPR/M/3 68/Add.1  
 
- 77 - 
 
   Mode 3:  By establishing branches with full banking authority  
 
Foreign bank applicants undergo a two -stage process, namely that of pre -approval and 
post-approval.  The pre -approval stage covers the submission of  documentary 
requirements of the foreign bank’s corporate profile as well as business plan and model 
to be carried out in the Philippines. The pre -approval stage is applicable to the three 
modes of entry regardless whether the foreign bank is applying for a universal, 
commercial, thrift or rural banking license. The post -approval stage covers the 
completion of the following pre -operating requirements by the foreign bank:  
 
1. Payment of the license fee of PhP 24.5 million;  
2. Inward remittance of the minimum capit al5 depending on the banking license 
applied for;  
3. Registration with the Securities and Exchange Commission of the Articles of 
Incorporation/By -Laws in the case of a foreign bank subsidiary (Mode 2) or 
license to transact in the Philippines in the case of a  foreign bank branch 
(Mode  3); 
4. Confirmation of relevant directors and/or officers;  
5. Completion of the proposed bank premises; and  
6. Submission of other documentary requirements necessary for the issuance of the 
Certificate of Authority to Operate  the bank in the Philippines.  
 
The second stage process is not applicable if the foreign bank applicant opts to utilize 
the first mode of entry, except if the entry will incidentally cause changes in 
directorship/officership, and in that case, confirmation of newly elected/appointed 
directors/officers shall apply. For a more detailed process, the foreign bank applicant 
may refer to the application guide posted on the BSP website following this link: 
www.bsp.gov.ph/downloads/Regulations/guidelines/Application%20Guide%20for%20Foreign%20B
anks.pdf  
 
Ukraine would also appreciate if the Philippines could inform on procedure of authorization of 
micro -banking offices by BSP and c larify differences as compared with bank branches.  
 
Response : 
 
Banks operating in the Philippines are allowed to establish a branch or a branch -lite unit 
(previously referred to micro -banking office, other banking office, and extension office) 
subject to approval of the Monetary Board.  The applicant bank must comply with the 
pre-qualification criteria  which include, among others, no major supervisory concerns in 
the areas of (1) corporate governance; (2) risk management system; (3) internal 
control struct ure; and (4) compliance system, including compliance with the required 
minimum capital ratios and minimum capitalization.   
 
In terms of licensing, branch and branch -lite units are similar in terms of pre -requisites, 
documentary requirements and approving authority. They differ on the processing fee 
and special licensing fee. There are no differences on location. In terms of functions, 
branch and branch -lite differ on the product or services offered and the maintenance of 
book of accounts, whereby a branch -lite unit does not maintain a complete set of books. 
Instead, transactions are recorded in the books of the head office/branch to which it is 
annexed.  
 
What are the requirements concerning authorization of non -banking financial institutions in the 
Philippi nes (including quasi -banks), in particular relating to types of activities, key requirements to 
applicants, approval procedure; verifying sources of funds for the formation of capital?  
 
Response : 
                                                
 5 Banks to be established are required to comply with the minimum capital prescribed under Subsection 
X111.1 of the MORB. The BSP’s minimum capitalization of banks is tiered based on network size as indicated in 
the number of branches (including head office s).  
 
 
 WT/TPR/M/3 68/Add.1  
 
- 78 - 
 
   
Existing regulations require investment houses or finance c ompanies (IH/FC) that 
intend to perform quasi -banking functions to obtain a Certificate of Authority to engage 
in quasi -banking functions by filing an application with the appropriate supervising and 
examining department of the BSP.   Along with other docu mentary requirements, the 
application shall include a certificate signed by the President/ Officer of equivalent rank 
that the IH/FC complies with: capital requirements, accounting systems and procedures, 
reconciliation of float items, credit standing, fit  and proper rule for qualification 
requirements for directors/officers and number of independent directors.  Applicants 
must also have a comprehensive risk management system and should comply with other 
requirements.  The general procedure is similar to th e licensing of domestic banks, 
which covers the filing of an application and submission of documentary requirements, 
and evaluation of the entity’s financial capacity and integrity of the personalities that 
shall manage the FI.  Moreover, since the operati on of a quasi -bank mainly consists of 
borrowing and investments, a borrowing and investment program for one year is 
required to be submitted.  The program should list down the planned distribution of 
asset/investment portfolios and expected source of funds  to support the investment 
program.  
 
Would the Philippines please describe procedures for approving payment system operators and 
issuers of payment instruments and electronic money in the Philippines, including key 
requirements to applicants and basic rule s of payment systems?  
 
Response : 
 
The Bangko Sentral ng Pilipinas’ ( BSP) Payments and Settlements Office (PSO) is the 
payment system operator responsible for the operation and maintenance of the 
Philippine real time gross settlement system known as PhilPaS S and its critical 
components.  It ensures that the operation of PhilPaSS is continuous, safe and efficient 
so that time -critical payments are completed as expected to facilitate and enhance 
economic processes, manage risks, and absorb shocks in order to p romote financial 
stability. Non -bank financial institutions (NBFIs) providing payment services through 
the utilization of electronic -based media that are interested in participating in the 
PhilPaSS as Third -Party Payment Systems Providers are required to r egister and comply 
with the guidelines provided by the PSO. A copy of the guidelines may be found in this 
link: http://www.bsp.gov.ph/downloads/Forms/PhilPaSS/Philpass -tppsp. pdf. 
 
The Agreement for the Philippine Payments System as well as the corresponding 
PhilPaSS Rules and Regulations govern the use and operations of the system. More 
informa tion may be found in this link: http://www.bsp.gov.ph/financial/payments/PhilPaSS.pdf  
For retail payments, the automated clearing houses (ACHs) under the National Retail 
Payment System (NRPS) define their own rules and a greements governing clearing and 
settlement. Currently, PESONet is the first and only ACH under the NRPS.  
 
a. With prior approval of the BSP, banks may offer checking accounts to their 
clients. Banks and their subsidiary or affiliate credit card companies may  likewise 
issue credit cards upon prior approval by the BSP.  
 
b. Banks and NBFIs planning to be an electronic money issuer (EMI) shall apply in 
accordance with the guidelines on electronic banking services and outsourcing of 
banking functions, when applicable . Non -bank institutions planning to be an EMI 
shall register with the BSP as a money transfer agent.  In case the non -bank 
institution is already registered with the BSP as a money transfer agent, it is 
required to meet the additional requirements to quali fy as an EMI.  The 
application shall demonstrate compliance with the provisions of the regulations 
described below, by presenting appropriate documentation.  
c. Bank Applicants - Banks planning to offer e -money shall have an adequate risk 
management process t o assess, control, monitor and respond to potential risks 
arising from the proposed electronic banking activities.  They should also put in 
place security controls to address data security issues on: authentication, non -
repudiation, authorization, integrit y, and confidentiality.   
 WT/TPR/M/3 68/Add.1  
 
- 79 - 
 
  d. Non-Bank Applicants – EMI-Others - If the applicant is a non -bank, it shall 
comply with the provisions for all EMIs.  In addition, the following additional 
provisions to “EMI -others” apply:  
 
 It shall be a stock corporation with a  minimum paid -up capital of P100 million;  
 It shall engage only in the business of e -money and other activities related or 
incidental to the business of e -money, such as money transfer/remittance;  
 It shall not engage in the extension of credit, unless a qua si-banking license is 
obtained;  
 It should have sufficient liquid assets equal to the amount of outstanding e -
money issued to protect e -money holders and ensure that redemptions are 
met;  
 It shall allow BSP access to review the e -money systems and databases  and 
shall extend to the agents, partners, service providers or outsourced entities 
of the EMI -Others in view of their participation in the e -money business;  
 It shall periodically submit audited financial statements (AFS) to BSP within 
set deadlines.  
The d etailed registration procedures are set out under Circular No. 6496. EMI -NBFls and 
EMI-Others that engage in lending activities must secure a quasi -banking license from 
the BSP.  
 
Could the Philippines also kindly provide information regarding requirements to participants and 
organizational structure of payment systems in the Philippines?  
 
Response : 
 
The BSP’s Payments and Settlements Office owns and operates the Philippine Payments 
and Settlements System or PhilPaSS.  It is the RTGS system of the country where both 
processing and final settlement of fund transfer instructions can take place continuous ly 
(i.e. in real time). As a gross settlement system, it enables individual settlement of 
payment instructions, that is, without netting debits against credits. The system effects 
final settlement continuously rather than periodically at pre -specified time s provided 
that a sending banks have sufficient balances in their demand deposit accounts (DDA) 
maintained with the BSP. The participants to the Philpass include the BSP, banks, and 
non-bank financial institutions. Requirements for participation include:  
 
a. An applicant bank or non -bank with quasi -banking function shall have a Demand 
Deposit Account (DDA) maintained with BSP.  
 
b. An applicant bank shall submit  an application for Participation in PhilPaSS and a  
certification of good membership standing from th e association where the 
institution is affiliated with, such as Bankers Association of the Philippines, 
Chamber of Thrift Banks, Rural Bankers Association of the Philippines, et al   as 
applicable.  
 
What are the most popular payment instruments in the Phili ppines? Please, describe BSP 
requirements for such payment tools.  
 
Response : 
 
Aside from cash, the following are the most popular payment instruments in the 
Philippines:  
a. Check  – These are commonly  used  by  consumers  for  bills  and  small  value 
payment s  and  for  businesses  for  their  regular  payments  such  as purchase of 
goods and services.  
 
b. Credit Cards  - In  the  Philippines, credit cards are usually issued  by  the  banks 
which have formed part of their marketing strategy to increase the numbe r of their  
customer  base  and  improve  income  that  can  be  generated  from retail  and  
                                                
6 http://www.bsp.gov.ph/downloads/Regulations/attachments/2009/c649.pdf  WT/TPR/M/3 68/Add.1  
 
- 80 - 
 
  consumer  business.  The most  common  credit  cards  being  used  are  the  Visa,  
MasterCard, BanKard, JCB, Diners Card, and American Express Card.  
 
c. Debit Cards  - The   existing  automated teller machine (ATM)  networks   (BancNet,   
MegaLink, ExpressNet, Nationlink and Encash) have developed their own Point -of-
Sale (POS) System   to   allow   their depositors to pay for their   purchases  
electronically through their ATMs for credit to the retailer’s account.  
 
d. Stored Value Cards (also called an electronic purse) – These are prepaid cards in 
which the record of funds can be increased as well as decreased.   
 
e. Electronic Money (e -money)  - This is a value  stored  electronically  in  a device such 
as a chip card or a hard drive in a personal computer. The   BSP   classifies e -money   
further   as   monetary   value   stored electronically in an instrument or device 
which can be converted back to cash, and if issued by a bank, shall not be 
considered as deposit.  
 
For more details, visit this link: www.bsp.gov.ph/financial/payments/PhilPaSS.pdf  
 
Ukraine would also appreciate if the Philippines could share its positive and negative experience of 
the "regulatory sandbox" application and describe specific features of risk -based and proportionate 
regulation by BSP.  
 
Response : 
 
The BSP’s “regulatory sandbox,” or test and learn approach, has been proven to be 
useful in dealing with increasing digital innovations in the market and promoting 
development and innovation within the financial services indu stry. This approach 
provides an opportunity for innovators to connect to banks and other financial system 
players with clear authority from the regulators. The ultimate objective is to be aware of 
the risks, employ mitigating actions, as needed, but in a m anner that also allows 
benefits leveraging on these new technologies. The BSP regulatory approach towards 
fintech innovation is shaped by three (3) core principles:  
 
a. Regulation must be risk -based, proportionate and fair.  
 
b. There is a need to maintain activ e multi -stakeholder collaboration.  
 
c. Regulations must ensure consumer protection.  
 
With the three (3) principles in mind, the BSP’s approach is proactive with continuous 
surveillance  of fintech developments and innovations. Thus, in carrying out its mandate, 
the BSP undertakes the following:  
 
 Practices Proportionality . The BSP adopts a differentiated and proportionate 
application of prudential principles. It conducts effective superv ision to maximize the 
benefits of financial inclusion, without compromising financial system stability, 
integrity and consumer protection.  
 
 Monitors the effects of fintech innovations and the reaction of banks. T he BSP 
monitors whether risks such as disin termediation could materialize. In doing so, it 
was observed that most banks/FIs are adopting innovations, or are partnering with 
fintech firms to cope with the increasing competition and customer demands.   
 Recognizes and monitors the participation of non -banks in fintech.  The BSP is 
cognizant that the participation of non -bank institutions as service providers, 
aggregators and/or key players in multi -player ecosystems is increasing. Non -banks 
and fintech firms need to be uncovered and fully understood by regulators to ensure 
the relevance and appropriateness of regulatory and supervisory frameworks.  
 
 Coordinates and cooperates with other regulators.  FinTech firms are often outside 
the oversight of central banks and other financial sector regulators but th eir WT/TPR/M/3 68/Add.1  
 
- 81 - 
 
  activities can have effects that interact and affect a number of players within the 
financial system.7 
 
What are specific features of authorization and regulation of third party cash agents in the 
Philippines?  
 
Response : 
 
Banks may use third party cash  agents as a cost -efficient service delivery channel. 
These third party service providers may be authorized by customers to perform 
cash/check  pick -up  and/or  cash  delivery services  on  their  behalf  or accept and 
disburse cash on the bank’s behalf in  order to  promote  operational  efficiency,  more 
expanded  service  delivery  channels,  and greater convenience of banking customers. 
Once given such approval, a bank may continuously undertake these activities unless 
otherwise ordered by the BSP. In th e use of third party entities as  cash agents  subject  
to  existing  rules  on outsourcing, banks are required to comply with the following 
conditions:  
 
a. The bank shall have an electronic banking solution to implement its cash agent 
operations.  
 
b. Cash  agen ts  shall  be  allowed  to accept and disburse cash on bank’s behalf in 
connection with the following self -service transactions of customers, including 
Deposit and withdrawal transactions performed  by  the  customer  on  his  bank 
account.  
The bank assumes full responsibility and liability for all acts and omissions of its cash 
agents on bank -related services.  
 
Would the Philippines kindly describe the procedure of interaction between the regulator of the 
banking/non -banking financial sector and the financial sector in the ASEAN Economic Community?  
 
Response : 
 
Financial and banking regulators of all the ASEAN member states, comprising the ASEAN 
sectoral ministerial body on finance formed under the ASEAN Charter, regularly engages 
with financial sector  representatives and business organizations, such as the ASEAN 
Bankers Association (ABA), ASEAN Insurance Council (AIC), ASEAN Business Advisory 
Council (ASEAN -BAC), among others, to discuss issues and matters of common interest. 
These meetings and dialogu es are often held at the sidelines of the Finance Minister and 
Central Bank Governors’ meetings (held once a year) as well as the ASEAN Summits 
which are held twice a year.  An annual dialogue between central bank governors and 
chief executive officers of various banks is likewise held to discuss, among others, 
recent economic and financial market developments; progress of work of the Working 
Committees and other developments in the implementation of the ASEAN Economic 
Community 2025. It is likewise customa ry in ASEAN for regulators to regularly consult 
with representatives of the financial sector prior to making important decisions or 
commitments regarding financial integration and other cooperation initiatives.  
 
 
What are the requirements concerning proced ure for coordinating the activities of a foreign bank in 
the Philippine banking system?  
 
Response : 
 
The Philippines subscribes to Principle 13 (Home -Host Relationships) of the Basel Core 
Principles for Effective Banking Supervision which requires that arra ngements (such as 
Memoranda of Understanding [MOUs]) be put in place between home and host 
supervisors/authorities to enable the exchange of confidential information and 
                                                
 7  Examples are equity crowd -funding in the financial or securities markets; debt crowd -funding in credit 
markets. There is impact of fintech too in the non -financial sector w ith fintechs accessing telco or social media 
data. WT/TPR/M/3 68/Add.1  
 
- 82 - 
 
  cooperation for better supervision of cross -border banking groups, including effective  
handling of crisis situations. The BSP currently has MOU arrangements with six (6) 
regulatory authorities, and is a party to a Multilateral MOU, from various countries on 
home -host supervisory coordination.  The BSP also ensures close coordination with it s 
counterpart regulators with respect to the supervision of cross -border activities of 
domestic banks and of foreign banks that are operating in the Philippines in supervisory 
college meetings and responds to requests for exchange of information involving these 
banks, subject to laws, rules on confidentiality.  
 
Could the Philippines also describe BSP requirements for the acquisition, including acquisition of 
existing Philippine Banks?  
 
Response : 
 
Of the three modes of entry for foreign bank previously menti oned, this query applies to 
the acquisition purchase or ownership of  up to 100 percent of the voting stock of an 
existing domestic bank.  The procedures enumerated in the response for Query No. 2 of 
Ukraine also apply to this query. In addition, the  follow ing factors shall be considered in 
selecting the foreign banks which will be allowed to enter the Philippine banking system 
through R.A. No. 7721, as amended by R.A. No. 10641 (Subsection X105.3, MORB):  
(a) Geographic representation and complementation.  
 
(b) Strategic trade and investment relationships between the Philippines and the 
home country of the foreign bank.  
 
(c) Relationship between the applicant bank and the Philippines. Consideration shall 
be given to the capability of the foreign bank to promote trade with, and to bring 
foreign investments into, the Philippines.  
 
(d) Demonstrated capacity, global reputation for fi nancial innovations and stability in 
a competitive environment of the applicant bank.  
 
(e) Reciprocity rights enjoyed by Philippine banks in the applicant's country. Subject 
to the host country's rules and regulations of general application, Philippine 
banks should have the opportunity to establish operations in the foreign bank 
applicant's home country.  
 
(f) Willingness to fully share banking technology.  
 
A foreign bank acquiring a domestic bank in the Philippines should also be (Subsection 
X105.2, MORB):  
 
(a) Widel y-owned and publicly -listed in the country of origin, unless the foreign bank 
applicant is owned and controlled by the government of its country of origin.  
 
(b) Established, reputable and financially sound.  
 
Any foreign individual or non -bank corporation may  each own or control up to forty 
percent (40%) only of the voting stock of a universal, commercial or thrift bank: 
Provided, That the aggregate foreign -owned voting stock owned by foreign individuals 
and non -bank corporations shall not exceed forty percent  (40%) of the voting stock of 
the UB/KB, and sixty percent (60%) in the case of thrift banks. For Rural Banks, 
non-Filipino citizens, excluding foreign banks, may each or in the aggregate, own, 
acquire or purchase, up to sixty percent (60%) of the voting s tock in a rural bank.  The 
percentage of foreign -owned voting stock in a bank shall be determined by the 
citizenship of the individual or corporate stockholders in that bank.  
 WT/TPR/M/3 68/Add.1  
 
- 83 - 
 
  4.5.4 Tourism  
 
Page 81 (Para 4.130)  
 
The Report notes that “Since 9 November 2014, the Philippines has offered 30 -day tourist visa 
waivers to nationals from 157 countries.”  
 
Does the Philippines have any plans to include in the list, approved by Executive Order 408, 
nationals of other countr ies, for example Ukrainians to enter the Philippines for tourism purposes 
without a visa?  
 
Response : 
 
The Philippines is undertaking a comprehensive review of the list of countries whose 
nationals can enter the Philippines on short -term visits without visa .. The Philippines 
also notes that while it offers visa -free entry to 157 nationals, Philippine nationals are 
able to enter only to 32 countries without a visa.  
 
The comprehensive review takes into account factors such as national security, 
contribution to  Philippine economic development and reciprocal visa treatment of 
Philippine nationals.  
 
Government Report  
 
Page 6 (Para 2.10)  
 
The Report states that “To identify and eliminate regulations and laws that hamper doing business 
in the country, the Philippine s rolled out “Project Repeal” in June 2016 to cut red tape and 
streamline business transactions and processes. The project supports the Government’s policy of 
eliminating laws that place a heavy regulatory burden on businesses and improve the country’s 
overall competitiveness. Improvements are planned in more complex areas of competitiveness 
such as in infrastructure, government bureaucracy, tax rates and tax regulations, including 
education, research and development, and disaster response.”  
 
Could the Phil ippines please provide more information regarding the measures of this “Project 
Repeal” and possible achievements of its implementation to ease doing business in the country?  
 
Response : 
 
Project Repeal is a collaboration of 88 government agencies where an aggregate of 
4,837 policy issuances were reviewed with a view to repeal outdated rules and reduce 
the cost of business.  
 
Project Repeal has collaborated with the Commission on Higher Education (CHED) and 
signed a Memorandum of Agreement (MoA) in June 2017 to engage faculty members 
from Jose Rizal University who will provide technical support through policy research. 
Moreover, a MoA will be signed between the National Competitiveness Council, 
Department of Trade and Industry and the University of the Philipp ines Law Center -
Office of National Administrative Register (UP Law Center -ONAR).  All repealed, 
amended, and consolidated regulations will be filed with ONAR to complete the repeal 
process.  
 
Page 6 (Para 2.11)  
 
The Report mentions the Customs Modernization  and Tariff Act which amended the Tariff and 
Customs Code of the Philippines to simplify, modernize customs rules and procedures, as well as 
import clearances and valuations procedures, and align these with international best practices.  
 
 Could the Philippines describe some provisions of the Customs Modernization and Tariff 
Act, implementation of which intends to substantially simplify customs processes and to 
remove unnecessary administrative costs for importers?  
 WT/TPR/M/3 68/Add.1  
 
- 84 - 
 
   Has appropriate provisions of that Act been in force or does its implementation need some 
additional steps of legislative process?  
 
 What requirements will be included in the Implementing Rules and Regulations of the said 
Act, which is drafted by the Bureau of Customs at the present time?  
 
Response : 
 
There are provisions in the Customs Modernization and Tariff Act (CMTA) which call for 
the adoption of clear and transparent customs rules, regulations, policies and 
procedures consistent with international standards and customs best practices.  The 
CMTA also provides for the use of modern practices in customs administration and the 
use of information and communications technology in the implementation of customs 
functions. For importations related to passenger baggage, postal item or mail and 
express shipments, simplified clearance procedures will be implemented. Kindly refer to 
the reply below for details.  
 
The Philippines, through the Bureau of Customs, is currently drafting the implementing 
rules and regulations in the form of customs administr ative orders (CAO) on a per topic 
basis to be approved by the Secretary of Finance. There is no additional legislative 
process involved.  
 
To date, the CAOs which are in effect involve the establishment of the Authorized 
Economic Operators Program (CAO 5 -2017); the clearance of postal items (CAO 3 -
2017); customs clearance of accompanied and unaccompanied baggage of travelers and 
crew (CAO 01 -2017); conditionally tax - and/or duty -exempt importation of returning 
residents and overseas Filipino workers (CAO 06 -2016); consolidated shipment of duty - 
and tax -free ‘balikbayan’ boxes (CAO 05 -2016); establishment of an advance ruling 
system for valuation and rules of origin (CAO -03-2016); and imported gods with de 
minimis  value and not subject to duties and taxes (CA O 02 -2016).  
 
The draft CAOs can be accessed in the CMTA microsite ( www.dof.gov.ph/cmta_irr ).  
The requirements will depend per topic or issue. The draft CAOs can be accessed in the 
CMTA microsite ( www.dof.gov.ph/cmta_irr ). 
Page 6 (Para 2.14)  
Under the Report “In pursuit of a simpler, more efficient, and more equitable tax system to finance 
and implement the 10 -point socioeconomic agenda, an effort to rede sign the current tax system is 
currently undergoing the legislative process. The Tax Reform for Acceleration and Inclusion, or 
TRAIN, will consist of low rates and a broad base to promote investments, job creation, higher and 
sustained growth, and poverty reduction. TRAIN will propose amendments on several provisions of 
the 1997 National Internal Revenue Code (Tax Code) specifically on lowering of personal income 
tax, simplifying estate and donor’s tax, expanding the value -added tax (VAT), increasing the 
excise tax on petroleum products, vehicles and sugar -sweetened beverages and certain 
administrative procedures.”  
 
Could the Philippines provide more information regarding the tax reform incentives including 
possible policy changes in VAT exemptions and VAT refunds for exported agricultural products?  
 
Response : 
 
According to the general principles of the rationalization of fiscal incentives under the 
proposed Package II of the TRAIN, the granting of incentives will be based on the 
following key principles:     
 
 Performance -based. Granting of a tax incentive to a corporation should satisfy 
objectives such as job creation, achievement of export targets, achievement of 
country -side development, use of modern technology or extent of research and 
development (R&D; such as 5% of employment in R&D).   The Fiscal Incentive 
Regulatory Board (FIRB), an independent body, will measure the performance.  
 WT/TPR/M/3 68/Add.1  
 
- 85 - 
 
   Time -bound. Five (5) years of incentives can be granted without extension, 
except for customs duty of capital equipment.  
 
 Targeted. The target sectors are based on a three -year Strategic Investment 
Priority Plan, which can cover both foreign and domestic firms (no nationality 
bias) and both exports and domestic market.  
 
 Transparent. The monitoring of tax incentives will be in stitutionalized and 
reported to the Government to provide a better understanding and its costs and 
benefits to the economy.  
 
On the VAT exemption, the VAT will no longer be used as an incentive and cannot be 
used in the separate customs territory argument , especially for vertical zones 
(i.e. buildings, hotels, and hospitals).  Firms will pay VAT, however input VAT of goods 
exported will be subject to a refund.  
 
Page 7 (Para 2.17)  
 
It is stated in the Report that “…the Philippine Development Plan and Invest ment Priorities Plan 
aim to expand economic opportunities in the industry and services sectors and to encourage 
investments in targeted areas to provide inclusive growth and spread economic opportunities to a 
broader segment of the population, especially m icro, small and medium enterprises (MSMEs), 
women, youth and vulnerable groups.”  
 
Could the Philippines kindly describe key measures set out in the Philippine Development Plan and 
Investment Priorities Plan for improvement of investment climate?  
 
Response : 
 
The Philippine Development Plan (PDP) 2017 -2022 spells out the strategies for the 
improvement of the business climate in order to increase local and foreign direct 
investments. These include:  
 
a. Strengthen value and supply linkages through:  
 
o Implementing the comprehensive national industrial strategy;   
o Adopting a holistic market -driven perspective;  
o Improving backbone services such as financial, telecommunications, distribution, 
transport, and logistics services;  
o Enhancing business services su ch as legal and accounting, research and 
development, and packaging; and  
o Implementing the new medium -term National Tourism Development Plan.  
 
b. Remove restrictions, provide incentives, and promote job -creating investments 
through:  
  
o Amending restrictive econ omic provisions in the Constitution;   
o Modernizing the incentive system to remove nationality and export biases;  
o Implementing aggressive investment promotion programs;   
o Addressing cross -cutting issues; and  
o Supporting the development of the services subs ectors outside value  
 
c. Accelerate the implementation of infrastructure programs and projects  
 
Under the Investment Priorities Plan, the strategies mainly include the implementation 
of industry competitiveness enhancement programs under the Manufacturing 
Resurgence Program and the broader I3S. These include addressing binding constraints 
to industry growth such as supply chain gaps, logistics, infrastructure and support 
facilities gaps. By addressing the gaps, barriers to entry of new industry players would 
be reduced and thereby encourage more investments in the country.  
 WT/TPR/M/3 68/Add.1  
 
- 86 - 
 
  Could the Philippines kindly inform when it plans to accept the Marrakesh Treaty to Facilitate 
Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print 
Disabled, which was adopted on June 28, 2013 and entered into force on September 30, 2016?  
 
Response : 
 
The Philippines is in the process of completing the domestic procedures required for the 
country’s formal accession to the Marrakesh Treaty. Nevertheless , the substantive 
provisions of the Treaty have already been incorporated in the national IP legislation 
under the latest amendments to the IP Code. 8 Under Section 184 (l) of the IP Code, the 
following shall not constitute infringement of copyright: “the r eproduction or 
distribution of published articles or materials in a specialized format exclusively for the 
use of the blind, visually - and reading -impaired persons: Provided, That such copies and 
distribution shall be made on a nonprofit basis and shall in dicate the copyright owner 
and the date of the original publication”.  
 
In 2015, the National Council on Disability Affairs has sent a letter to IPOPHL supporting 
the accession of the Philippines to the Marrakesh Treaty as it is consistent with the UN 
Conve ntion on the Rights of Persons with Disabilities. IPOPHL has sent 
recommendations and awaiting feedback of the Executive Department regarding the 
acceptance of the treaty.  
 
With respect to the Beijing Treaty on Audiovisual Performances (this Treaty is not yet in force), 
adopted on June 26, 2012, what are Philippines' intentions to join this instrument?  
 
Response : 
 
The Philippines intends to formally accede to the Beijing Treaty, and consultations have 
been conducted with the relevant stakeholders as part of  its pre -accession preparations. 
Nevertheless, the substantive provisions of the Treaty have already been incorporated in 
the national IP legislation under the latest amendments to the IP Code. 9 Under Sections 
203 and 204 of the IP Code, performers of audi ovisual works are granted the same 
economic and moral rights as performers of sound recordings.  
UNITED STATES  
Questions based on the Secretariat Report (WT/TPR/S/368)  
 
2 TRADE AND INVESTMENT REGIMES  
 
2.4 Investment Regime  
 
Page 27, Paragraph 2.28  
The Secretariat Report notes that the Philippines expected to issue the 11th FINL in late 2017.  
 Can the Philippines provide an update on the status of the 11th FINL?   
 Has the FINL been issued?  
 What were the major changes from the 10th FINL?  
Response : 
 
The draft of the 11th RFINL is for consideration and approval by the National Economic 
and Development Authority (NEDA) Board, thus, has not been issued.  
 
The details of the major changes from the 10th FINL cannot be provided at the moment 
as the list is yet t o be approved by the NEDA Board.  
 
Page 27, Paragraph 2.30  
                                                
8 Pursuant to Republic Act No. 10372, amending Republic Act No. 8293 or the Intellectual Property Code 
of the Philippines.  
9 Pursuant to Republic Act No. 10372, amending Republic Act No. 8293 or the Intell ectual Property Code 
of the Philippines.  WT/TPR/M/3 68/Add.1  
 
- 87 - 
 
  We understand that the Philippines’ Congress is working on legislation that would curtail foreign 
investment restrictions in the Philippines.  Can the Philippines provide an update of those efforts?  
 
Response : 
 
There is an ongoing review of the 1987 Constitution by a 25 -member Committee created 
by the President through Executive Order No. 10, issued in December 2016.  The 
Committee is expected to complete its review in six months or until June this y ear. It 
will submit its recommendations and proposals to the President, who will transmit these 
to Congress.  
 
The President provided guidance through Memorandum Order No. 16, issued in 
November 2017, on the priority investment areas or activities where cur rent equity 
restrictions will be reviewed. These include the following:  
 
1. Private recruitment, whether for local or overseas employment;  
2. Practice of particular professions, where allowing foreign participation will 
redound to the public benefit;  
3. Contracts for the construction and repair of locally -funded public works;  
4. Public services, except activities and systems that are recognized as public 
utilities such as transmission and distribution of electricity, water pipeline 
distribution system, and sewerage pi peline system;  
5. Culture, production, milling, processing, and trading except retailing, of rice and 
corn and acquiring by barter, purchase or otherwise, rice and corn and the by -
products thereof;  
6. Teaching at higher education levels;  
7. Retail trade enterprises ; and  
8. Domestic market enterprise.  
 
3 TRADE POLICIES AND PRACTICES BY MEASURE  
 
3.1 Measures Directly Affecting Imports  
 
3.1.1 Customs procedures, valuation, and requirements  
 
Page 30, Paragraph 3.7  
 
We have received reports that Philippine Customs has used reference prices for particular 
agricultural goods. What steps is the Philippines taking to rectify this practice?  
 
Response : 
 
The Philippines, through the Bureau of Customs (BOC), employs transaction value as the 
primary method for computation of dut ies and taxes and only refers to reference prices 
provided by the Department of Agriculture (DA), which are based on USDA FAS Global 
Agricultural Trade System (GATS) online data.  BOC resorts to further verification when 
in doubt of the authenticity of dec lared values or when the differences between the 
transaction value and reference prices are substantially out of range. In a meeting 
arranged by the Department of Trade and Industry (DTI) and relevant agencies, it was 
agreed with USDA and Canada that shoul d BOC doubt the declared values, it can request 
commercial and agricultural attaches to verify the declared values.  
 WT/TPR/M/3 68/Add.1  
 
- 88 - 
 
  3.1.5 Import prohibitions, restrictions, and licensing  
 
Page 39, Paragraph 3.31, Box 3.1  
 
How are infringing goods defined in Section  G:  Infringing goods as defined under the Intellectual 
Property Code and related laws ? What are the other “related laws” that customs can use to 
prohibit the importation of infringing goods?  
 
Response : 
 
Goods or materials found to be infringing are those which relate to a violation of the 
rights of the IPR owner, as provided under the IP Code. This includes goods found to be 
infringing under Section 76 (Civil Action for [Patent] Infringement), Section 84 
(Criminal Action for Repetition of Infringement), Section 155 (Remedies; [Trademark] 
Infringement), and Section 216 ([Copyright] Infringement) of the IP Code.  
 
Page 39 -40, 3.31, Box 3.1 Prohibited imports 2017 and Table 3.6 Goods subject to 
import permits or licensing  
 
Please explain why the Philippines prohibits  the import of used clothing and rags.  
 
Response : 
 
Republic Act No. 46653 (An Act to Safeguard the Health of the People and Maintain the 
Dignity of the Nation by Declaring it a National Policy to Prohibit the Commercial 
Importation of Textile Articles Commonly Known as Used Clothing and Rags) has not 
been revoked since its enactment by the Philippine Congress.  
 
Page 39 -40, 3.31, Box 1 and Table 3.6  
Please clarify whether used motorcycle parts except engines are prohibited or subject to import 
licensing or permits.  
 If used motorcycle parts are prohibited, p lease explain why certain used motorcycle parts 
are prohibited when it appears that imports of other vehicle parts are allowed, subject to 
import licensing or permitting.  
Response : 
 
Pursuant to Executive Order 877 -A, the importation of used motor vehicle parts for all 
motor vehicles, including motorcycles, is allowed. Interested importers are required to 
secure prior import permit from the Fair Trade and Enforcement Bureau of the 
Department of Trade and Industry.  
 
3.2 Measures Directly Affecting Exports  
 
3.2.6 Export processing zones  
 
Page 45, Paragraph 3.54  
 
We would like to thank the Philippines for submitting an updated subsidies notification in 
November 2017.   However, some of the programs identified in the Secretariat Report were not 
included in that notification.   Specifically, we noticed that the “Omnibus Investments Code of 1987 
(OIC)” was not included. We ask the Philippines to update its subsidies notification to include this 
program.  
 Can the Philippines provide more information on the incentives offered under this 
program?  In addition, could the Philippines explain why this program was not included in 
its most recent subsidies notification?  
Response : 
 
The Omnibus Investments Code of 1987 is part of the latest subsidies notification of the 
Philipp ines (under Investment Promotion Program).  WT/TPR/M/3 68/Add.1  
 
- 89 - 
 
   
 We recognize that certain incentives under the Export Development Act (RA No. 7844) 
have expired.  However, it appears that other incentives offered under Section 16(a), 
which offers tax credits for companies tha t increase their annual export revenue, and 
Section (d) may still be in place.  Is our understanding correct?  If so, why were these 
incentives not notified?  
Response : 
 
The incentives provisions of the Export Development Act (EDA) have already lapsed on 
31 December 1999.  Moreover, Sec. 16 of EDA on Incentives was never implemented due 
to constraints by the implementing authorities.  
 
 We recognize that the 2017 Investment Priorities Plan was enacted after the period 
covered in the Philippines notification, b ut can the Philippines provide more information on 
the incentives offered under this program?    
Response : 
 
Given the current deficiencies in market conditions such as infrastructure support and 
high cost of factor inputs, the Philippines provides incentiv es to industries, which 
contribute to the poverty reduction and inclusive growth goals of the country. The 
incentives are no more than those provided by other countries to similar activities.  
 
3.2.7 Export finance, insurance, and guarantees  
 
Page 45, Parag raphs 3.56 -3.58 
 
According to the Secretariat Report, the Philippine Export -Import Credit Agency (PhilEXIM) 
provides loans, guarantees, and insurance to exporters with a minimum export volume of 
US$100,000 within the last 6 months.    
 Can the Philippines pr ovide more information on the incentives offered under these 
programs?  
Response : 
 
PhilExIm has two programs. The first is the Wholesale Guarantee for SMEs Program 
which provides guarantees on existing loan portfolios to direct and indirect SME 
exporters.  The second is the Guaranteed Programs for SMEs which provides guarantees 
on short term loans to direct and indirect exporters, firms involved in priority projects of 
the government and import substitution industries.  
Page 45, Paragraphs 3.56 -3.58 
The Secre tariat Report states that PhilEXIM is a public export credit and insurance agency that 
provides loans, guarantees, and insurance programs to Filipino -owned companies, including a 
special program for SMEs.    
 Can the Philippines provide the name of the progr ams that cover exports of agricultural 
products?  
Response : 
 
The guarantee facilities of PhilEXIM  include the  Guarantee Program for Large Accounts, 
the Guarantee Program for SMEs and the Portfolio Guarantee Program.  
Page 45, Paragraph 3.57  
 
In addition to domestic loans for working capital, does PhilEXIM also offer medium - and long -term 
direct loans or loan guarantees to finance the foreign purchase of Philippine exports?  
 
Response : 
 
PhilEXIM does not provide direct loans to finance the foreign purchase of Philippine 
exports, only guarantees.  WT/TPR/M/3 68/Add.1  
 
- 90 - 
 
   
 
3.2.8 Export performance requirements  
 
Page 46, Paragraph 3.59  
 
The Secretariat Report notes that certain tax incentives under the Omnibus Investment Code are 
contingent on export performance at 50% of production for Philippine -owned companies and at 
70% of production for foreign -owned enterprises.  
 Can the Philippines provide additional information on the export performance 
requirements, and how they are consistent with WTO obligations?  
Response : 
 
These measures are cu rrently being revisited in line with the review of the Philippines’ 
overall tax and incentive scheme. Under the proposed Tax Reform for Acceleration and 
Inclusion (TRAIN) 2, outdated provisions of existing investments laws will be eliminated 
taking into co nsideration the current business models and engagements in free trade 
arrangements. In this regard, there is not much difference between domestic and export 
markets since both are equally contestable.     
 
 In addition, we ask the Philippines to update its s ubsidies notification with these additional 
programs.  
Response : 
 
This measure is part of the Omnibus Investments Code, which is part of the latest 
subsidies notification of the Philippines (under Investment Promotion Program).  
 
3.3 Measures Affecting Production and Trade  
 
3.3.2 Sanitary and phytosanitary requirements  
 
Page 48 -49, Paragraph 3.76  
 
We appreciate that the Philippines has taken steps to improve the scientific basis of its food safety 
regime (Paragraph 3.69).  However, our exporters continue to face certain measures that do not 
appear to be based on science, such as the two -tiered system for meat handling.  Will the 
Philippines amend its meat -handling regime to remove the two -tiered system?  
Response : 
 
The Philip pines does not implement a two -tiered system. However, there is a separate 
protocol for handling frozen meat particularly if intended to be thawed and sold in the 
wet markets and for freshly slaughtered and chilled meat.  
 
3.3.5 State trading, state -owned e nterprises and privatization  
 
Page 51, Paragraph 3.93  
 
According to footnote 74 of the Secretariat Report, the Philippines last made a notification to the 
Working Party on State Trading Enterprises in 2002.  
 During this review, please provide an update on the current operations of State Trading 
Enterprises in the Philippines.  
Response : 
 
The National Food Authority (NFA) remains as the sole state -trading enterprise in the 
Philippines. It is mandated under Presidential Decree No. 4 (as amended by Republic Act  
No. 8178) to import rice. PD 4 allows NFA to undertake direct importation of rice, or it 
may allocate import quotas to certified and licensed importers. Importation is deemed 
required by NFA when supply shortfalls occur due to natural calamities and/or to  avert 
market distortions due to speculations that result in hoarding.  WT/TPR/M/3 68/Add.1  
 
- 91 - 
 
   
 Will the Philippines make a notification for the period 2003 -2016?  
 
Response : 
 
The Philippines remains committed to abide by the rules and procedures being followed 
under WTO, one of which is the conduct of WTO notification process for the required 
period in review.  
3.3.6 Government procurement  
 
Page 52, Paragraph 3.99  
 
The Secretariat Report notes that government procurement in the Philippines accounts for about 
10% to 11% of GDP.  Do es the Philippines collect statistics or estimates on the number and value 
of government procurement contracts awarded?  If so, can the Philippines provide this data for the 
years since the last report?  
 
Response : 
 
There is data that can be generated throu gh the posting of Contract Award in the 
PhilGEPS. However, the data captured may not be accurate to show the exact number 
and value of government contracts awarded since there is varying compliance by 
Procuring Entities in the registration and posting requ irements.  
 
Page 52, Paragraph 3.99  
 
The Secretariat Report notes that the Philippines is not yet a party or observer of the WTO 
Agreement on Government Procurement (GPA).  Is the Philippines still considering observer 
status?  
 
Response : 
 
The Philippines i s currently assessing the possibility of joining the WTO GPA as an 
observer. Pending the outcome of the assessment, the Philippines is continuously 
undergoing capacity development activities on the WTO GPA through the participation of 
representatives of th e Government Procurement Policy Board in the WTO’s global and 
Asian workshops. The Philippines will be hosting a national workshop on government 
procurement by the second quarter of 2018.  
 
Page 53, Paragraph 3.105  
 
The Secretariat Report notes  that in 2016 , 52% of the total value of contracts was procured 
through open bidding.  Can the Philippines provide figures on what percentage of the total value of 
contracts was procured through each of the alternative methods listed in the Secretariat Report?  
 
Response : 
 
The figures are not currently available. The Philippines will endeavor to provide data on 
percentages of contracts procured through the other alternative methods.  
 
Page 53, Paragraph 3.106  
 
The Secretariat Report notes  that limited source bidding can be used for procurement of highly 
specialized types of goods and consulting services where only a few suppliers or consultants are 
known to be available.  
 
 What is the process to determine this pre -selected list of suppliers and consultants?  WT/TPR/M/3 68/Add.1  
 
- 92 - 
 
  Response : 
 
For the pre -selection of suppliers or consultants in the use of Limited Source Bidding, as 
an alternative method of procurement of goods and consulting services, the GPPB issued 
Resolution No.  06 -2012, dated 30 March 2012, prescribing the amended “Guidelines on 
the Pre -Selection Procedure in the Conduct of Limited Source Bidding”. The Guidelines 
can be accessed at http://www.gppb.gov.ph/issuances/Resolutions/06 -2012.pdf . 
 
In g eneral, the procuring entity shall prepare a list of pre -selected suppliers or 
consultants which shall be those appearing in a list that is maintained updated by the 
relevant government authority with expertise in the type of procurement concerned or 
self-generate such list if it represents itself as the relevant government authority. In 
preparing the pre -selected list, the following criteria shall be considered, thus:  
 
1. Capability and resources to perform the contract taking into account their 
experience an d past performance on similar contracts;  
2. Capabilities with respect to personnel, equipment, or manufacturing facilities; 
and 
3. Financial position.  
 
 Does the Philippines have a process to make procuring entities aware of new suppliers or 
consultants that may qualify to participate in a limited source bid? If so, can the Philippines 
explain this process?  
Response : 
 
The pre -selected list is then submitted to the GPPB. The GPPB -TSO shall acknowledge 
receipt of the said list and post the same in the GPPB or PhilGE PS website for 
transparency.  
 
Concerns on the propriety of the self -generated or pre -selected list shall be directed to 
the procuring entity that issued/adopted the list for a particular procurement activity in 
accordance with the protest mechanism in the IRR of RA 9184.  
 
The Guidelines can be accessed at http://www.gppb.gov.ph/issuances/Resolutions/06 -
2012.pdf.  
 
Page 53, Paragraph 3.108  
 
Can the Philippines confirm if there is an established limit on the number of times a procuring 
entity can use the repea t order method under a single contract?  
 
Response : 
 
Under Section 51 of RA 9184 and its 2016 IRR, the following are the limitations in 
resorting to Repeat Order as an alternative method of procurement, thus:  
 
a) Unit prices of the repeat order must be the sam e as or lower than those in the 
original contract: Provided, That such prices are still the most advantageous to the 
Government of the Philippine after price verification;  
b) The repeat order will not result in splitting of contracts, requisitions, or purchas e 
orders, as provided for in Section 54.1 of the IRR;  
c) Except in cases duly approved by the GPPB, the repeat orders shall be availed of 
only within six (6) months from the date of the Notice to Proceed arising from the 
original contract: Provided, That the re has been a partial delivery, inspection and 
acceptance of the goods within the same 6 -month period; and  
d) Repeat orders shall not exceed twenty -five percent (25%) of the quantity of each 
item in the original contract. In order not to exceed the 25% threshold, the goods 
under the original contract must be:   WT/TPR/M/3 68/Add.1  
 
- 93 - 
 
  i. Quantifiable  
ii. Divisible; and  
iii. Consisting of at least four (4) units per item.  
 
There is no limitation on the number of Repeat Orders but based on the fourth condition, 
procuring entities are indirectly limited on the number of times to resort to Repeat Order 
by the cumulative 25% ceiling on the quantity of items that can subject of Repeat Order.  
Page 54, Paragraph 3.111  
 
The Secretariat Report notes that 0.05% of contract awards between 2012 a nd 2016 were 
awarded to foreign suppliers.  
 
 Can the Philippines provide statistics or estimates on the number of government 
procurement contracts and the value of contracts awarded to foreign suppliers by country 
of origin?  
Response : 
 
Of the 524 contracts awarded, the countries which received the most number of shares 
and percentages are: United States (144; 27%); Korea (56; 10%); France (29; 6%); 
Singapore (26; 5%); Germany (21; 4%); Brazil (20; 4%); United Kingdom (18; 3%); 
Indonesia (16; 3%); India (15; 3%); Hong Kong (14; 3%) and Canada (14; 3%).   The 
Philippines will endeavor to provide the values as soon as available.  
 
Page 54, Paragraph 3.112  
The Secretariat Report notes that the Philippine Government has mandated the use of electronic 
procurement. However, in Paragraph 3.105, the Secretariat Report notes that the GPRA requires 
publication of open bidding opportunities in at least one newspaper .  
 How has the Philippines mandated the use of electronic procurement? Is it through a 
change to the GPRA or through another action?  
Response : 
 
Section 8 of RA 9184 provides that to promote transparency and efficiency, information 
and communications techno logy shall be utilized in the conduct of procurement 
procedures. Accordingly, under Section 8.3.1, all procuring entities are mandated to fully 
use the PhilGEPS in accordance with the policies, rules and regulations, and procedures 
adopted by the GPPB and embodied in the IRR.  
 
Currently, the rules prescribe partial implementation of electronic procurement. In the 
existing rules, electronic submission of bids is only an option, and other bidders may still 
opt to submit bids manually. For more details, the Gu idelines on Electronic Bidding can 
be accessed at http://www.gppb.gov.ph/issuances/Resolutions/23 -2013.pdf . The Philippines is 
still to implement a complete electronic procurement whe reby there will be no manual 
submission of bids. It bears stressing, however, that Section 8 of RA 9184 and its IRR 
authorizes the GPPB to approve changes in the procurement process to adopt to 
improvements in modern technology, provided that such modifica tions are consistent 
with the governing principles of RA 9184.  
 
As regards newspaper advertisement, Section 21 of RA 9184 provides that in line with 
the principle of transparency and competitiveness, all Invitations to Bid contracts under 
Competitive Biddi ng shall be advertised by the Procuring Entity in such manner and for 
such length of time as may be necessary under the circumstances, in order to ensure the 
widest possible dissemination thereof, such as but not limited to, posting in the 
Procuring Entity ’s premises, in newspapers of general circulation, the Government 
Electronic Procurement System and the website of the Procuring Entity, if available.  
 
For increased transparency, procurement opportunities for Competitive Bidding are 
advertised in newspape r, except those with a budget below the threshold, and posted in 
the PhilGEPS website. Procuring entities are mandated to utilize the Electronic Bulletin WT/TPR/M/3 68/Add.1  
 
- 94 - 
 
  Board facility of the PhilGEPS. Thus, under Section 8.2.1(a) of the 2016 IRR of RA 9184, 
all procuring  entities are required to post all procurement opportunities, results of 
bidding and related information in the PhilGEPS bulletin board.  
 
Page 54, Paragraph 3.115  
The Secretariat Report notes that the Asian Development Bank found that the bid challenge 
procedures are neither independent nor objective, and made recommendations for improvement.  
 Has the Philippines adopted any of the recommendations made by the Asian Development 
Bank, or are there any plans to alter the bid challenge procedure to address As ian 
Development Bank concerns?  
 
Response : 
 
Although the proposal to establish an independent review panel is yet to be considered, 
the 2016 IRR introduced reforms on bid protest mechanisms. Accordingly, eligible 
bidders may now file a request for reconsideration to the BAC once they are notified that 
a recommendation to award a contract has already been made. Likewise, request for 
reconsideration can be filed directly to the Head of the Procuring Entity in case of 
disapproval of the recommendation to award the contract.  
 
3.3.8 Intellectual property rights  
 
3.3.8.4 Trademarks  
Page 57, Paragraph 3.130  
The Secretariat Report notes that the Anti -Camcording Act (RA No. 10088 of 2010) prohibits the 
use of audiovisual recording devices for the unauthorized  recording of films or their soundtracks in 
an exhibition facility.  Please provide additional information on this act, including:  
 Have there been any cases in the Philippines applying the Anti -Camcording Act?  If so, 
what was the outcome?  
Response : 
 
Since  its enactment, the Anti -Camcording Act has proven to be a positive deterrent 
against the unauthorized recording of cinematographic films. According to the Motion 
Picture Anti -Film Piracy Council (MPAFPC), there were 44 illegal camcorders arrested in 
2012,  16 in 2013, and at least 27 in 2014 .  Moreover, in 2017 Cinema Monitoring 
Enforcement Activities were conducted by the Optical Media Board of the Philippines, 
with over 1,000 agents, volunteers and partner agencies collaborating in the effort to 
prevent m ovies from being illegally recorded and pirated.  
 
Initiatives to promote vigilance and awareness of the law by the public and security 
personnel of cinemas are also complemented by continued enforcement operations to 
ensure the strict implementation of th e law.  In fact, the National Committee on 
Intellectual Property Rights (NCIPR) member agencies’ seizure of counterfeit and 
pirated items from January to December 2017 amounted to Php 8.2 billion or equivalent 
to more than USD 157 Million as a result of th e relentless enforcement efforts of the 
member agencies of the NCIPR.  
 
3.3.8.7 IP registration and enforcement  
Page 57, Paragraph. 3.136  
The Secretariat Report states that the National Committee on Intellectual Property Rights (NCIPR) 
coordinates enforcement efforts of the various institutions involved, including “the DTI as Chair, 
IPOPHL as Vice -Chair, and members from various other public institutions.” What are the public 
institutions that have been involved?  
Response : 
 
Under Executive Order No,  736 dated 21 June 2008, establishing the NCIPR, the other 
national agencies that are members of the National Committee are as follows:  WT/TPR/M/3 68/Add.1  
 
- 95 - 
 
  1. Department of Justice (DOJ);  
2. Department of the Interior and Local Government (DILG);  
3. Bureau of Customs (BOC);  
4. National  Telecommunications Commission (NTC);  
5. National Bureau of Investigation (NBI);  
6. Philippine National Police (PNP);  
7. Optical Media Board (OMB);  
8. National Book Development Board (NBDB)  
9. Food and Drug Administration (FDA); and  
10. Office of Special Envoy on Transn ational Crime  
 
Page 57, Paragraph. 3.137  
The Secretariat Report states that “(iii) for copyrights, fines and imprisonment depend upon the 
number of times the offence is committed.”  
 How are the fines per each offence calculated?  
 What are the minimum and ma ximum amounts that can be imposed?  
 
Response : 
 
Under Section 217 of the IP Code, as amended, the penalties for copyright infringement 
are provided as follows:  
 
“SEC. 217. Criminal Penalties. - 217.1. Any person infringing any right secured by 
provisions of Part IV of this Act or aiding or abetting such infringement shall be guilty of 
a crime punishable by:  
 
(a) Imprisonment of one (1) year to three (3) years plus a fine ranging from Fifty 
thousand pesos (P50,000) to One hundred fifty thousand pesos (P150,000) for 
the first offense.  
 
(b) Imprisonment of three (3) years and one (1) day to six (6) years plus a fine 
ranging from One hundred fifty thousand pesos (P150,000) t o Five hundred 
thousand pesos (P500,000) for the second offense.  
 
(c) Imprisonment of six (6) years and one (1) day to nine (9) years plus a fine 
ranging from Five hundred thousand pesos (P500,000) to One million five 
hundred thousand pesos (P1,500,000) for t he third and subsequent offenses.  
 
(d) In all cases, subsidiary imprisonment in cases of insolvency.  
 
217.2.  In determining the number of years of imprisonment and the amount of fine, the 
court shall consider the value of the infringing materials that the de fendant has 
produced or manufactured and the damage that the copyright owner has suffered by 
reason of the infringement: Provided, That the respective maximum penalty stated in 
Section 217.1. (a), (b) and (c) herein for the first, second, third and subsequ ent offense, 
shall be imposed when the infringement is committed by:  
 
(a) The circumvention of effective technological measures;  
 
(b) The removal or alteration of any electronic rights management information from 
a copy of a work, sound recording, or fixation of a  performance, by a person, 
knowingly and without authority; or  
 
(c) The distribution, importation for distribution, broadcast, or communication to the 
public of works or copies of works, by a person without authority, knowing that 
electronic rights management information has been removed or altered without 
authority.”  
 WT/TPR/M/3 68/Add.1  
 
- 96 - 
 
  Page 57, Paragraph. 3.138  
The Secretariat’s Report states that the “total market value of seized counterfeited and pirated 
goods between 2011 and October 2017 amounted to more than PHP 45 billion .”  What is the trend 
in the value of annual seizures during this period?  Has there been a steady increase?  
Response : 
 
There is no trend in the value of annual seizures during the periods from 2011 -2017.  
The value of the seizure for each year depends on the kind of commodities/products 
that were seized for that year, and the market value of the original goods in the formal 
economy. In 2017, according to data from the NCIPR, the most common counterfeit 
products seized were electronics, optical media, and p harmaceutical and personal care 
products. In 2016, enforcement data showed that jewellery and watches were the top 
counterfeit items seized, followed by cigarettes and alcohol, and then optical media. In 
2015, the most seized items were watches and jewelle ry, followed by optical media, 
then hand bags and wallets  
Page 57, Paragraph. 3.139  
The Secretariat Report states that “[upon] reasonable cause, enforcement authorities may 
examine and search all types of consignment.” Is there guidance as to what constitutes a 
“reasonable cause”?  
 
Response : 
 
Reasonable Cause would mean grounds to believe that there is a violation under the 
Customs Modernization and Tariff Act or if there is a violation of any valid Customs 
Memorandum Order or Customs Administrative  Order.  
 
Page 57, Paragraph. 3.140  
 
The Secretariat Report states that RA No. 10372 of 28 February 2013 “strengthens IPOPHL’s 
enforcement powers with regard to visits to businesses engaging in IP violations.” How are 
enforcement powers with regard to business visits actually strengthened by this amendment?  
 
Response : 
 
Prior to the amendments to the IP Code under RA No. 10372, Section 5 of the IP Code 
mandated IPOPHL to “ [c]oordinate with other government agencies and the private 
sector efforts to formu late and implement plans and policies to strengthen the 
protection of intellectual property rights in the country.” On the basis of Executive Order 
No. 736, issued by the President on 21 June 2008, inter -agency coordination efforts to 
promote, protect, and  enforce intellectual property rights were undertaken through the 
National Committee on Intellectual Property Rights (NCIPR).  
 
Through the amendments under RA No. 10372, IPOPHL’s enforcement functions were 
strengthened through the grant of the specific man date to “[c]onduct visits during 
reasonable hours to establishments and businesses engaging in activities violating 
intellectual property rights and provisions of this Act based on report, information or 
complaint received by the office”.  
 
Pursuant to suc h mandate, the Intellectual Property Rights Enforcement Office (IEO) of 
IPOPHL was established to provide IP owners or right holders with an alternative 
administrative remedy to enforce their right. On the basis of a verified complaint, 
IPOPHL may conduct visits to establishments alleged to be committing acts in violation 
of IP rights. Upon the IEO Enforcement/Evaluation Officer’s validation that the 
establishment is distributing, trading, offering for sale or selling counterfeit or pirated 
items, IPOPHL ma y issue a Compliance Order to the said establishment. In case of non -
compliance, IPOPHL may file a case with the Department of Trade of Industry for 
cancellation of the establishment’s business name registration, or with the local 
government unit concerned  for the cancellation of the establishment’s Business/Mayor's 
Permit, so that it shall cease to operate or conduct business.  
 WT/TPR/M/3 68/Add.1  
 
- 97 - 
 
  Page 59, Paragraph 3.135  
The IP Code does not expressly prohibit or allow parallel imports of goods and services containing 
any fo rm of IPRs.   Nonetheless, parallel importation of patented drugs and medicines is allowed.    
 Can the Philippines provide the policy on prohibiting or allowing parallel imports of goods 
and services containing any form of IPRs?  
 Has the  policy been recently updated?  
Response : 
 
The Intellectual Property Code of the Philippines (IP Code) is the primary law 
establishing the intellectual property rights regime in the country, and therefore 
provides the basis for the policies prohibiting or allowing parallel imports of goods and 
services containing any form of IPRs.  Aside from the express allowance of parallel 
importation for patented drugs and medicines under Republic Act No. 9502 or the 
Quality and Affordable Medicines Act, there are no ot her recent amendments to the IP 
Code pertaining to the policies on prohibiting or allowing parallel imports of goods and 
services containing any form of IPRs.  
4 TRADE POLICIES BY SECTOR  
 
4.1 Agriculture  
 
4.1.3 Domestic support  
Page 60, Paragraph 4.9:   The Secretariat Report indicates that the Philippines has not provided 
up-to-date domestic support notification since 2010. What is the status of the Philippines domestic 
support notice?  
Response : 
 
The Philippines has submitted its domestic support notificati on to the WTO for the years 
2011 -2015 last 15 February 2018 which are circulated as document G/AG/N/PHL/48 -
52. 
4.1.5 Rice  
Page 62, Paragraph 4.15 and 4.16  
 
The Secretariat Report states, “as a result of the Uruguay Round, the Philippines obtained the righ t 
to defer temporarily the tariffication of its import restrictions on rice (Special Treatment – Annex 5 
of the Agreement on Agriculture).”  
 
This exception allowed the Philippines to maintain quantitative restrictions (QRs) on rice imports 
for 10 years un til 30 June 2005, together with a bound minimum access quota for rice; the out -of-
quota tariff remained unbound. The special treatment was extended until 30 June 2012, and 
subsequently the WTO General Council granted, upon request by the Philippines, a fur ther 
extension until 30 June 2017. The Philippines agreed to convert QRs on rice to tariffs upon the 
expiry of the waiver. According to the authorities, “the House of Representatives is currently 
[October 2017] reviewing a consolidated bill that would allo w for tariffication of the QRs on rice, 
and the Philippine executive branch is working closely with both Houses of Congress in the 
finalization of the bill, as the President ordered the passage of the rice tariffication law to be 
expedited.”  
 
The Secretari at Report goes on to state that under the 2012 WTO Waiver, a number of 
concessions were agreed upon in exchange for the extension of special treatment for rice, 
including tariff concessions on several agricultural products, including butter, buttermilk, ch eese, 
poultry meat, and oilseeds and notes that “Executive Order 23 of 22 May 2017 extended these 
concessions until 30 June 2020, or until such time as a law relating to rice tariffication has been 
enacted, whichever comes first. Thus, as of October 2017, the Philippines rice import regime is 
governed by the status quo.”  
 When does the Philippines expect to pass legislation that would abolish the quantitative 
restrictions on rice and provide the authority to establish tariffs?   
 WT/TPR/M/3 68/Add.1  
 
- 98 - 
 
   What additional steps must the government take to set the tariff rates and how long does 
the Philippines anticipate that this process will take?  
 
 Can the Philippines clarify the trigger for the reversion of the concessions to prior tariff 
rates on agricultural products listed in Executive Order 23?  
Response : 
 
The bill to provide for the tariffication of rice imports is currently at the House of 
Representatives (HOR) subject to plenary hearings. Upon its passage on the third 
reading in the HOR plenary, the adopted bill will be transmitted to the Philippine Senate 
and shall undergo the same process. The approved version of the bill will then be 
transmitted to the Office of the President for approval.  
 
In view of the independence of the three (3) branches of Government, the Legislative 
Branch will have their own timelines.  Note that the leadership of both houses have 
given priority to this proposed legislation.  
 
Executive Order No. 23 dated 22 May 2017extends the concessions granted by the 
Philipp ines to interested trading partners for another three years (2018 -2020) or until 
the enactment of a law amending Republic Act (RA) 8178, whichever comes first.  In the 
meantime, the MFN tariff rates  remain at 35% for the in -quota rate and 50% for the 
out-quota rate.  
4.4 Manufacturing  
 
Page 71, Paragraph 4.67  
 
The Secretariat Report provides information about the Motor Vehicle Development Programme 
(MVDP) regarding tariff rates for both motor vehicle components and finished vehicles, noting that 
tariff rate s for finished vehicles are much higher than those for components.  We understand that 
the Philippines, through various FTAs including those with ASEAN and Japan, has lowered the 
tariffs rates for finished vehicles from those preferential rates.  
 
 Has the P hilippines considered reducing the rates on a MFN basis for finished automobiles 
and motorcycles?  
Response : 
 
The Philippines has recently completed the comprehensive tariff review with the 
issuance of Executive Order No. 20, s. 2017. In the said EO, the MF N rates for finished 
automobiles and motorcycles were maintained.  
 
Questions based on the Government Report by The Philippines (WT/TPR/G/368)  
 
2 DOMESTIC POLICIES AND INITIATIVES TO SUSTAIN LONG -TERM GROWTH AND 
IMPROVE THE BUSINESS ENVIRONMENT FOR INCLUSIV E GROWTH  
 
2.2 Enhancing Competition Policy and the Regulatory Environment  
 
Page 6, Paragraph 2.10  
We understand that the President has issued Memorandum 16 in November 2017 encouraging the 
National Economic Development Authority to reduce restrictions on foreign investment.  Can the 
Philippines please provide an update on the Memorandum’s effect on reducing foreign investment 
restrictions?’  
Response : 
 
The issuance of Memorandum Order No. 16 in November 21, 2017 is directed not only to 
the National Economic and Development Authority (NEDA) but to all the member WT/TPR/M/3 68/Add.1  
 
- 99 - 
 
  agencies of the NEDA Board10. There are now bills that have been filed covering most of 
the fol lowing investment areas/activities identified in Memorandum Order No. 16:  
 
 practice of particular profession;  
 
 public services, except activities and systems that are recognized as public utilities 
such as transmission and distribution of electricity, wa ter pipeline distribution 
system, and sewerage pipeline system;   
 
 culture, production, milling processing, and trading except retailing, of rice and corn 
and acquiring by barter, purchase or otherwise, rice and corn and the by -products 
thereof; and retail  trade enterprises.  
 
3 INDUSTRY AND TRADE POLICY DEVELOPMENTS  
 
3.2 Participation in the Doha Development Agenda (DDA) Negotiations  
 
3.2.3 Intellectual Property  
Page 13, Paragraph. 3.16  
The Government Report notes that the Republic Act No. 10372, which took effect in March 2013, 
established a Bureau of Copyright and Other Related Rights within the Intellectual Property Office 
of the Philippines.  Can the Philippines provide additional information regarding the Bureau of 
Copyright and Other Related Rights , including:  
 Has the Bureau of Copyright and Other Related Rights been fully staffed?   
 
 If not, what is the anticipated timeline for fully staffing the Bureau of Copyright and Other 
Related Rights?  
 
Response : 
 
Currently, the administrative procedures for the full staffing of the Bureau have not 
been completed, and IPOPHL is still in the process of hiring all the necessary personnel 
required. Nevertheless, designated IPOPHL personnel are already performing the 
functions of the Bureau, and it is envisioned t hat the Bureau will be fully staffed in 2018.  
 
Page 13, Paragraph. 3.16  
The Government Report notes that the Bureau of Copyright and Other Related Rights shall have 
responsibility for the accreditation of collective management organizations or societies.    
 Have any such collective management organizations or societies been accredited since the 
creation of the Bureau of Copyright and Other Related Rights?   
 
 If so, how many have been accredited?  
 
 Does the Bureau of Copyrights and Other Related Rights have a ny other significant 
responsibilities with respect to managing the copyright regime in the Philippines?  If so, 
please enumerate such responsibilities.  
 
Response : 
 
The Philippines confirms that since the establishment of the Bureau of Copyright and 
Other Related Rights under RA No. 10372, four (4) collective management organizations 
have been accredited, as follows:  
 
                                                
10 President (Chair), National Economic and Development Authority (Vice -Chair), Members: Executive 
Secretary Cabinet Secretary, Department of Budget and Mana gement, Department of Energy  Department of 
Finance, Depart ment of Public Works and Highways, Department of  Transportation, Department of Trade and 
Industry,  Mindanao Development Authority, Bangko Sentral ng Pilipinas  WT/TPR/M/3 68/Add.1  
 
- 100 - 
 
  a. Filipino Society of Composers, Authors and Publis hers, Inc. (FILSCAP), in 
representation of composers, lyricists, music publishers and other music copyright 
owners;  
 
b. Filipinas Copyright Licensing Society, Inc. (FILCOLS), in representation of authors, 
publishers and other right holders in the text and ima ge sector;  
 
c. Performers Rights Society of the Philippines, Inc. (PRSP) in representation of 
performers; and  
 
d. Sound Recording Rights Society of the Philippines (SOUNDSRIGHT) in representation 
of sound recording producers.  
 
Pursuant to RA No. 10372, aside from the accreditation of collective management 
organizations or similar entities, the functions of the Bureau are as follows:  
 
(1) Exercise original jurisdiction to resolve disputes relating to the terms of a license 
involving the author’s right to public per formance or other communication of his 
work;  
 
(2) Conduct studies and researches in the field of copyright and related rights; and  
 
(3) Provide other copyright and related rights services. To date, this has included 
accepting copyright deposits pursuant to a Mem orandum of Agreement with the 
National Library of the Philippines in January 2011, and implementing projects to 
benefit copyright stakeholders, both copyright owners and users of copyrighted 
works, which involve information dissemination and general legal advisory.  
 
Page 13, Paragraph 3.16  
 
The Government Report notes that the Republic Act No. 10372, which took effect in March 2013, 
granted related rights for performances fixed in audiovisual works or fixations.  Can the Philippines 
describe the nature of s uch related rights, including whether such rights are exclusive rights, and if 
so, what activities are reserved to the holder of the rights.  
 
Response : 
 
Under Sections 203 and 204 of the IP Code, the economic and moral rights of performers 
of audiovisual works or fixations are provided as follows:  
 
“SEC. 203. Scope of Performers' Rights. - Subject to the provisions of Section 212, 
performers shall enjoy the following exclusive rights:  
 
203.1. As regards their performances, the right of authorizing:  
(a) Th e broadcasting and other communication to the public of their performance; and  
(b) The fixation of their unfixed performance.  
 
203.2. The right of authorizing the direct or indirect reproduction of their performances 
fixed in sound recordings or audiovis ual works or fixations in any manner or form;  
 
203.3. Subject to the provisions of Section 206, the right of authorizing the first public 
distribution of the original and copies of their performance fixed in the sound recordings 
or audiovisual works or fix ations through sale or rental or other forms of transfer of 
ownership;  
 
203.4. The right of authorizing the commercial rental to the public of the original and 
copies of their performances fixed in sound recordings or audiovisual works or fixations, 
even after distribution of them by, or pursuant to the authorization by the performer; 
and  
 
203.5. The right of authorizing the making available to the public of their performances 
fixed in sound recordings or audiovisual works or fixations, by wire or wireles s means, WT/TPR/M/3 68/Add.1  
 
- 101 - 
 
  in such a way that members of the public may access them from a place and time 
individually chosen by them.  
 
SEC. 204. Moral Rights of Performers. - 204.1. Independently of a performer's economic 
rights, the performer, shall, as regards his live aural performances or performances 
fixed in sound recordings or in audiovisual works or fixations, have the right to claim to 
be identified as the performer of his performances, except where the omission is 
dictated by the manner of the use of the performa nce, and to object to any distortion, 
mutilation or other modification of his performances that would be prejudicial to his 
reputation. XXX”  
 
Page 13, Paragraph 3.16  
The Government Report notes that the Republic Act No. 10372, which took effect in March 20 13, 
included a copyright limitation in favor of blind and visually - and reading -impaired persons.  Can 
the Philippines provide additional information about this limitation, including:  
 What is the category of beneficiary persons?  
 
 What categories of works are subject to the limitation?  
 
 What exclusive rights are subject to the limitation?  
 
 What requirements are placed on beneficiary persons or authorized entities to exercise the 
limitation?  
Response : 
 
Under Section 184.1(l) of the IP Code on the limitations  to copyright, the following act 
does not constitute infringement of copyright: “[t]he reproduction or distribution of 
published articles or materials in a specialized format exclusively for the use of the 
blind, visually - and reading -impaired persons: Pro vided, That such copies and 
distribution shall be made on a nonprofit basis and shall indicate the copyright owner 
and the date of the original publication.”  
 
Pursuant to the above provision, the beneficiary persons of the copyright limitation are 
exclusiv ely “the blind, visually - and reading -impaired persons”, and the categories of 
works that are subject to the limitation are “published articles or materials”.  
 
Meanwhile, the exclusive rights that are subject to the limitation are the rights of 
reproductio n and distribution, and the requirements that are placed on beneficiary 
persons or authorized entities to exercise the limitation are that the copies and 
distribution “shall be made on a nonprofit basis and shall indicate the copyright owner 
and the date o f the original publication”.  
 
Page 13, Paragraph 3.16:   The Government Report notes that the Republic Act No. 10372, 
which took effect in March 2013, enacted a change in the copyright law to the effect that “acts 
constituting copyright infringement to also  include those benefiting from the infringing activity of 
another person, with notice of the infringing activity and the right and ability to control the 
activities of the infringer, and those who knowingly induce, cause or materially contribute to the 
infringing conduct of another.”  Can the Philippines provide additional information on this change, 
including:  
 Have there been any cases in the Philippines applying this new basis for liability?  If so, 
what was the outcome?  
 
 What types of evidence are suffic ient to demonstrate liability?  
Response : 
The amendments to Section 216 of the IP Code were intended to establish the persons 
liable for copyright infringement, including those that may be secondarily liable 
therefor.  
 WT/TPR/M/3 68/Add.1  
 
- 102 - 
 
  As of 28 February 2018, no administra tive case before IPOPHL has been filed on the 
basis of the above -cited amendments of the IP Code.  
 
On the other hand, in order to address alleged copyright violations in the internet, 
IPOPHL’s Enforcement Office (IEO) has issued warning letters or complia nce letters to 
Internet Service Providers (ISPs) on the basis of such provisions on secondary liability. 
In compliance with such issuances, the subject ISPs have caused either the removal or 
blocking of the relevant accounts that offer infringing content s uch as movies, books, 
and music. In compliance with another warning letter issued by the IEO, a local 
electronic payment facility also effected the immediate termination of the account which 
was using the said platform as a payment facility for a website o ffering infringing 
content.  
 
Under the Revised Rules on Evidence as promulgated by the Supreme Court of the 
Philippines, the types of evidence that may be admissible are those that constitute 
object or real evidence, documentary evidence, and testimonial evidence.11 To be 
sufficient as evidence, the same should prove every element of liability as provided 
under the relevant paragraph of Section 216, and should satisfy the quantum of 
evidence required to establish the administrative, civil and/or criminal li ability of one 
who shall be secondarily liable.  
 
Page 13, Paragraph 3.16  
The Government Report notes that the Republic Act No. 10372, which took effect in March 2013, 
enacted a change in the law to provide for the award of “double the amount of damages and  
imposition of the maximum penalty for copyright infringement committed through the 
circumvention of technological protection measures or the alteration of rights management 
information.”  Can the Philippines provide additional information on this change, including:  
 Is an act of copyright infringement a necessary predicate to damages for circumvention of 
technological protection measures or the alteration of rights management infringement?  
 
 Have any cases to date awarded such damages?  If so, in what amount s? 
Response : 
The Philippines can confirm that under the amendments to the IP Code, an act of 
copyright infringement is a necessary predicate to award double the amount of damages 
and impose the maximum penalty for copyright infringement committed through t he 
circumvention of technological protection measures or the alteration of rights 
management information.  
Sub-section 216.1 of the IP Code provides as follows:  
 
 “216.1 Remedies for Infringement - Any person infringing a right protected under this 
law shal l be liable: XXX  (b) To pay to the copyright proprietor or his assigns or heirs 
such actual damages, including legal costs and other expenses, as he may have incurred 
due to the infringement as well as the profits the infringer may have made due to such 
infringement, and in proving profits the plaintiff shall be required to prove sales only 
and the defendant shall be required to prove every element of cost which he claims, or, 
in lieu of actual damages and profits, such damages which to the court shall appe ar to 
be just and shall not be regarded as penalty: Provided, That the amount of damages to 
be awarded shall be doubled against any person who:  
 
(i)  Circumvents effective technological measures; or  
                                                
11 As provided under Rule 130 of the Revised Rules on Evidence, as amended per Supreme Court of the 
Philippines Resolution adopted on 14 March 1989.  WT/TPR/M/3 68/Add.1  
 
- 103 - 
 
  (ii)  Having reasonable grounds to know that it will induce, enable, facilitate or conceal 
the infringement, remove or alter any electronic rights management information from a 
copy of a work, sound recording, or fixation of a performance, or distribute, import for 
distribution, broadcast, or communicate to the public works or copies of works without 
authority, knowing that electronic rights management information has been removed 
or altered without authority. XXX  
The copyright owner may elect, at any time before final judgment is rendered, to 
recover instead  of actual damages and profits, an award of statutory damages for all 
infringements involved in an action in a sum equivalent to the filing fee of the 
infringement action but not less than Fifty thousand pesos (Php50,000.00). In awarding 
statutory damages,  the court may consider the following factors:  
 
(1)   The nature and purpose of the infringing act;  
 
(2)   The flagrancy of the infringement;  
 
(3)   Whether the defendant acted in bad faith;  
 
(4)   The need for deterrence;  
 
(5)   Any loss that the plaintiff has suffered or is likely to suffer by reason of the 
  infringement; and  
 
(6)   Any benefit shown to have accrued to the defendant by reason of the  
  infringement.  
 
In case the infringer was not aware and had no reason to belie ve that his acts constitute 
and infringement of copyright, the court in its discretion may reduce the award of 
statutory damages to a sum of not more than Ten thousand pesos (Php10,000.00): 
Provided, That the amount of damages to be awarded shall be double d against any 
person who:  
 
(i) Circumvents effective technological measures; or  
(ii) Having reasonable grounds to know that it will induce, enable, facilitate or conceal 
the infringement, remove or alter any electronic rights management information 
from a copy of a  work, sound recording, or fixation of a performance, or distribute, 
import for distribution, broadcast, or communicate to the public works or copies of 
works without authority, knowing that electronic rights management information 
has been removed or alte red without authority.”  
As of 28 February 2018, no administrative case before IPOPHL has been filed on the 
basis of the above -cited amendments of the IP Code.  
 
Page 13, Paragraph 3.17  
The Government Report notes that the Republic Act No. 10515 (the Anti -Cable TV & Cable Internet 
Tapping Act of 2013) prohibits the theft of cable TV and cable internet signals.  Can the Philippines 
provide additional information on this act, including:  
 What is the prescribed penalty for the theft of cable TV and cable internet  signals?  
Response : 
 
Section 5 of RA 10515 provides that the penalties shall be imprisonment of not less than 
two (2) years but not more than five (5) years or a fine of not less than PhP 50,000.00 
nor more than PhP 100,000.00 or both, at the discretion of  the Court. If the offender is a 
corporation or association, the president, manager, managing partner or any officer of 
the corporation or partnership who directly participated in the violation of the law shall 
be held liable.  
 
 Have any cases been brought under this act?  If so, what was the outcome?  WT/TPR/M/3 68/Add.1  
 
- 104 - 
 
  Response : 
 
Information on the status of cases, if any, are being requested from relevant police and 
investigative agencies.  
 
Page, 13, Paragraph 3.17  
The Government Report notes that the Republic Act No. 10863 (the Customs Modernization and 
Tariff Act of 2016) prohibits the importation and exportation of IPR infringing goods and provides 
power for the Bureau of Customs to effect seizures of infringing goods.  Can the Philippines 
provide additional information on  this act, including:  
 Whether copyright infringement is a covered IPR?  
Response : 
 
Under Republic Act No. 10863, or the Customs Modernization and Tariff Act (CMTA), the 
prohibition against the importation and exportation of infringing goods may include 
copy right infringement. However, in the exercise of such authority, the Bureau of 
Customs of the Philippines is assisted by the Intellectual Property Office of the 
Philippines (IPOPHL) in the technical determination of whether the said goods are 
infringing. Th e Bureau may also be guided by the decisions of the Courts in the case of 
judicial proceedings, and the IPOPHL in administrative cases, on the determination of 
whether certain goods infringe upon IP rights under the IP Code.  
 
 Whether IPR owners must regist er their rights with the Bureau of Customs to benefit from 
such seizures?  If so, how is such registration accomplished?  
Response : 
 
IPR owners may or may not register with the Intellectual Property Rights Division 
(IPRD) of the Bureau of Customs (BOC). How ever, once their IPR is recorded with the 
IPRD -BOC registration, their products will be included in the database / reference 
material used for the verification of authenticity of consumer products being imported in 
the Philippines. Recordation with the BOC -IPRD is valid for two (2) years and serves as 
a continuing complaint against any and all counterfeit and infringing goods. On the other 
hand, IPR holders that do not record their IPR and product with the IPRD -BOC may file a 
written complaint against impor ters suspected of bringing in counterfeit and infringing 
goods into the country. Complaint letters may be submitted to the IPRD -BOC or to the 
Office of the Commissioner of Customs or to the Concerned District Collector of Customs. 
However, a complaint lett er is valid only for a particular shipment and does not 
constitute as a continuing complaint.  
 
 Whether the Bureau of Customs has utilized this power to effect seizures of IPR infringing 
goods?  If so, how many goods have been seized, and how has the Bureau  of Customs 
disposed of such goods?  
Response : 
 
The Philippines confirms that for the year 2017, BOC was able to apprehend a total of 
PhP5,925,272,260.00 worth of counterfeit goods from various operations conducted.  
 
Page 13, Paragraph. 3.17  
The Government Report outlines the various laws that were recently passed to complement the IP 
Code.  We understand that regulations are currently being drafted specific to Geographical 
Indications (“GI”).   
 Can the Philippines please provide a status upda te on when these regulations will be 
finalized?  Can the Philippines please provide a copy?  WT/TPR/M/3 68/Add.1  
 
- 105 - 
 
  Response : 
 
Geographical indications are currently protected in the Philippines under the law on 
trademarks, pursuant to the IP Code, and in full compliance with the  country’s 
obligations under the TRIPS Agreement. Nevertheless, the Philippines, through the 
IPOPHL, continues to develop possible enhancements of the GI protection system, 
including through the enactment of the appropriate legal issuance. Through a whole -of-
government approach, consultations with stakeholders, including the relevant 
government agencies and foreign trading partners, continue. The Philippines remains 
committed to adopting the appropriate measures in due time, with the view of 
strengthening t he protection of geographical indications and in pursuit of its national 
development agenda.  
 
 Under these regulations, will it be made clear that all GI applications, even those 
contemplated through trade agreements, will be examined and subject to third party 
opposition on the basis of likelihood of confusion with prior trademark rights and to 
determine whether the terms are generic in the Philippines?  
Response : 
 
These issues are being carefully considered in developing the appropriate measures to 
be adop ted as part of the enhancement of the current GI protection system of the 
Philippines.  
 Will the Philippines identify generic components of GIs comprising compound terms, such 
as by a disclaimer, so that third parties may better evaluate whether to oppose?  
Response : 
 
These issues are being carefully considered in developing the appropriate measures to 
be adopted as part of the enhancement of the current GI protection system of the 
Philippines.  
 
3.2.5 Trade Facilitation  
Page 14, Paragraph 3.22  
When will the Philippines submit its indicative Category B and C notification?  
Response : 
 
The Philippines submitted its notification on Categories A, B and C on 30 January 2018.  
CHILE  
SUMMARY  
 
Paragraph 22  
 
Paragraph 22 of the summary indicates that the services sector in the Philippines contributes some 
51% of the GDP during the review period. Regarding this subject, Chile would be thankful if The 
Philippines could inform if it considers - in their future tra de strategy - measures or plans for 
enhance the contribution of this sector to the economy, or if exist another sector or sectors that 
are of interest to strengthen internally.  
 
Response : 
 
The Philippine Development Plan 2017 -2022 contains strategies directed at enhancing 
the contribution of services in the economy.  These include efforts to relax restrictive 
economic provisions in the Constitution as well as burdensome laws, rules, and 
regulations that limit foreign participation in certain sectors. T he proposed amendment 
to the Public Service Act, i.e., defining public utilities would allow for more foreign 
equity participation in sectors such as telecommunications and transportation, among 
others.  WT/TPR/M/3 68/Add.1  
 
- 106 - 
 
   
Paragraph 23  
 
Paragraph 23 expresses that cabotage is reserved for national carriers in both in aviation and 
maritime transport. Regarding the fact that cabotage is reserved for domestic companies, both in 
air transport and in maritime transport, Chile would be grateful if the Philippines could indicate 
more details about its definition of "cabotage", together with informing how this relates to the 
authorizations for foreign ships to carry goods destined for international trade, between national 
ports from one island to another.  
 
Response : 
 
Cabotage is defi ned in Republic Act (RA) No. 10668 or “An Act allowing Foreign Vessels 
to Transport and Co -Load Foreign Cargoes for Domestic Transshipment and for other 
Purposes”. RA 10668 allows foreign vessels to dock and co -load in multiple ports goods 
that are intende d for export and import.  
 
Paragraph 24  
 
Paragraph 24 indicates that Philippines’ telecommunications sector is private -sector driven and 
dominated by two companies. Chile would be thankful if The Philippines would inform their 
percentages of participation,  if they are foreign or national.  
 
Response : 
PLDT and Globe Telecom are the two dominant companies.  Based on the latest Annual 
Report submitted by the two companies, the foreign equity of Globe is 25.56% (common 
share). Smart it is owned by PLDT (100%); f or PLDT,  its foreign partner equity is 
15.5%.  
1.3.2 Trends and structure of direct foreign investment  
 
Paragraph 1.48  
 
Paragraph 1.48 indicates that a problem for attracting more Foreign Direct Investment (FDI) is 
lack of good infrastructure.  Chile would  thank The Philippines to provide more detail on what 
particular infrastructure should be improved, in order to attract more FDI.  
 
Response : 
 
An accelerated infrastructure development program has been initiated . The NEDA Board 
Committee on Infrastructure and the Investment Coordinating Committee have 
identified 75 flagship projects that are expected to promote inclusive growth.  Of the 
total, 45 projects are located in Luzon, 10 projects in the Visayas and 17 projects in 
Mindanao. Two projects are intended  to enhance inter -island connectivity while one 
project is nationwide in scope.  As of 15 January 2018, 66 projects are already with 
determined cost totalling Php2.29 trillion.The main proponents are the Department of 
Public Works and Highways with 31 proj ects amounting to Php0.88 trillion; and the 
Department of Transportation with 14 projects amounting to Php1.13 trillion. Some 34 
projects are expected to commence this year.  
 
The following are some of the flagship infrastructure projects:  
 
1. 12 Pasig River,  Marikina River, and Manggahan Floodway Bridges.   Construction 
of additional fixed links or bridges and alternate routes to improve road transport 
network capacity and efficiency in Metro Manila, as well as to alleviate traffic 
congestion.  
 
2. Panguil Bay Br idge Project .  Project worth 4.86 billion that will connect the City 
of Tangub, Misamis Occidental and municipality of Tubod, Lanao del Norte.   WT/TPR/M/3 68/Add.1  
 
- 107 - 
 
  3. New Bohol International Airport.   Improvements of the airport and provision of 
additional facilities to enhance  safety, security, access, passenger and cargo 
movement efficiency.  Project cost is PHP 4.57 billion.  
  
4. Mindanao Rail Project (Phase 1).   Construction of a 102 km rail network, worth 
PHP 35.26 billion, that will run through Tagum, Davao City, and Digos i n 
Region  11. 
 
5. Metro Manila Subway Project.   A 25.3 -km underground rail, costing PHP 355.59 
billion, which serves as a north -south rail backbone for the Greater Capital 
Region from Mindanao Avenue in Quezon City in the North to Ninoy Aquino 
International Ai rport in the South.  
 
6. MRT-LRT Common Station Project.   A concourse area of 13,700 square meters 
which connects the LRT Line 1 North Extension, MRT 3, MRT 7 on the corner of 
North Avenue and EDSA.  Project cost is PHP 2.80 billion.  
  
7. Philippine National Ra ilway (PNR) North 2.   A PHP 211.43 billion project that will 
construct a 69.5 -km extension of the PNR North 1 from Malolos, Bulacan, to Clark 
International Airport and Clark Green City in Pampanga.  
 
8. PNR South Long -haul.   Construction of a 639 -km rail, worth PHP 175.30 billion, 
that consists of Los Banos – Legaspi (406 km), Legazpi – Matnog in Sorsogon 
(117 km), Calamba – Batangas (58 km), and Manila – Los Banos segments 
(58 km) 
2  COMMERCE AND INVESTMENT REGIMES  
 
2.2 For mulation and objectives of the commercial policy  
 
Paragraph  2.5, letter (e)  
 
Paragraph 2.5 letter (e) indicates that The Philippines’ has an Interagency Committee on Trade in 
Services (IAC. -TS). Chile would thank The Philippines to give more details on the  functions and 
attributions of this Committee, and on how it is conformed.  
 
Response : 
 
The Interagency Committee on Trade in Services  (IAC -TS) is one of the working groups  
supporting the Technical Committee on WTO Matters (TCWM).12  It coordinates the 
preparation and recommends Philippine positions on matters relating to trade in 
services in bilateral, regional, and multilateral trading arrangements. The members of 
the committee are representatives from government agencies that have oversight and 
regulatory  functions in business services, professional services, computer -related 
services, communications services including postal, courier, and telecommunications, 
audio -visual, distribution, education, environmental, financial, health tourism and 
travel -related , transport (maritime, air, road, rail), and energy -related, among others.  
The IAC -TS is chaired by the National Economic Development Authority and also serves 
as its secretariat. Decisions are generally reached through consensus. Member agencies 
undertak e their own stakeholder consultation.  
 
3.2.3 Taxes, charges and charges for export  
 
Paragraph  3.45 
 
With regard to what is indicated in the paragraph, Chile would be grateful if the Philippines would 
indicate the objectives to be achieved when imposing this tax on the export of plantation trunks, 
                                                
12 The Technical Committee on WTO Matters is one of two technical committees created under the NEDA 
Board Comm ittee on Tariff and Related Matters pursuant to NEDA Board Resolution No. 10 series of 1999. The 
TCWM discusses and recommends Philippine positions and strategies on issues relevant to the country’s 
implementation of its WTO commitment and the continuing p articipation in the multilateral trading system.  
 WT/TPR/M/3 68/Add.1  
 
- 108 - 
 
  along with sharing information on the public policy to whi ch it responds, as well as any other 
related information.  
 
Response : 
 
Pursuant to Executive Order No. 26, s. 1986, an export duty on logs was imposed at 
twenty (20%) percent of the gross FOB value at the time of shipment based on the 
prevailing rate of exc hange. This is to secure the domestic supply of logs and incentivize 
further processing for eventual export as a higher -valued manufactured product.  
 
The duty was imposed given the decline in log production in the 1980s due to the 
cancellation of erring a nd non -renewal of expiring Timber License Agreements operating 
in natural forests, as part of the government’s conservation efforts. The policy 
environment remains the same with the more recent Executive Order No. 23, s. 2011, 
which declares a moratorium o n the cutting and harvesting of timber in the natural and 
residual forests.  
 
3.3 Measures affecting production and trade  
 
3.3.1 Standards and other technical requirements  
 
Paragraph  3.61 
 
Regarding what is stated in the above paragraph about the methods of  elaboration of standards, 
Chile would be grateful if the Philippines would indicate if it has a mechanism so that third parties, 
whether Filipino or foreign nationals, can access the background of the technical standards that 
are being carried out, togeth er with informing if the BPS elaborates reports of economic, 
environmental, comments and arguments to carry out the regulation.  
 
Response : 
 
Requests to access the background of technical standards are processed in accordance 
to existing rules or policies.  
 
Paragraph  3.72 
 
Chile would like to thank the Philippines for reporting the levels of risk perceived by his Rapid Alert 
System, along with commenting on the specific actions involved in risk detection.  
 
Response : 
 
The Philippines acknowledges Chile’s comm ents.  
 
Chile would be grateful to the Philippines if the exporter is allowed to correct the detected fault, 
depending on the requirement violated, and if so, how much time is left to the exporter to correct 
it. 
 
Response : 
 
The Food and Drug Administration (FDA) is the National Contact Point for the Philippine 
Rapid Alert System for Food and Feed (PhilRASFF).  It is committed to share information 
regarding products that have safety issues. The FDA recognizes that there are product 
quality issues, including l abelling. The FDA acts and provides timelines on cases based 
on the severity of the product non -conformity detected and the risk of the product.  
 
Chile would be grateful if the Philippines would indicate if there is a channel to communicate the 
failure det ected to the exporter and to the sanitary authorities of the countries.  
 WT/TPR/M/3 68/Add.1  
 
- 109 - 
 
  Response : 
 
Those responsible for placing the products in the market, the exporter and FDA -licensed 
distributor -importer are informed by  PhilRASFF . Queries can be addressed through its  
website ( http://philrasff.org/ ). 
 
Paragraph  3.76 
 
Regarding the requirements for the importation of meat, the cited paragraph indicates that the 
shipments of imported meat must come from a foreign meat establishment that is recognized by 
the Veterinary Administration and accredited in the Philippines. In this regard, Chile would like the 
Philippines to indicate more information on the procedure to achieve the aforementioned 
recognition by the Veterinary Administration, along with indicating whether a ranking of priority - 
or preference among suppliers - for the recognition of foreign meat establishments is presented.  
 
 If so, Chile would also appreciate commenting on the aspects or factors that the 
Philippines considers when establishing said ranking or preference.  
 
 Chile would appreciate the Philippines sh aring statistical data on surveys and 
accreditations made by Veterinary Administration inspectors to meat establishments 
abroad.  
 
Response : 
 
The Philippines would like to know what statistical data Chile is referring to and would 
appreciate if Chile will b e able to share its own statistical data similar to this.  
 
Please refer to the following link for the list of updated list of accredited foreign meat 
establishment: http://nmis.gov.ph/attachments/article/411/161020 -2228.pdf  
 
3.3.8.2 Patents  
 
3.3.8.3 Copyri ght and related rights  
 
Paragraph  3.129  
 
Regarding the role of the Copyright Office indicated in the paragraph, Chile would be grateful if the 
Philippines would share more information about the operation of that office in the framework of its 
dependence on  the IPO, together with information on whether there is other functions exercised by 
the Copyright Office in addition to that indicated in the aforementioned paragraph.  
 
Response : 
 
Section 6 of the IP Code, as amended by RA 10372, includes the Bureau of Co pyright and 
Other Related Rights as one of the bureaus comprising the IPOPHL. Under Section 7(b) 
of the IP Code as amended, the decisions of the Bureau are also appealable to the 
IPOPHL Director General, in the same manner as the decisions of the other IPO PHL 
Bureaus.  
  
Section 9A of the IP Code, as amended, also provides for the other functions of the 
Bureau, as follows:  
 
i. Exercise original jurisdiction to resolve disputes relating to the terms of a license 
involving the author’s right to public performance or other communication of his 
work;  
ii. Accept, review and decide on applications for the accreditation of collective 
management organizations or similar entities;  
iii. Conduct studies and researches in the field of copyright and related rights; and  
iv. Provide other copyright and related rights service and charge reasonable fees 
therefor.  
    
 WT/TPR/M/3 68/Add.1  
 
- 110 - 
 
  Paragraph 3.130  
 
Regarding the Prevention Law indicated in the above paragraph, Chile would be grateful to the 
Philippines to inform about how the criminalization is controlled and the use of audiovisual 
recording devices is prohibited.  
 
Response : 
 
Under the Anti -Camcording Act, the PNP, in coordination with the NBI, OMB, operators 
of the cinemas, theaters, or exhibition facilities and owners of cinematographic films or 
audiovisual works and other soundtracks, may without a warrant, and without payment 
of any admission fee or other charge, enter an exhibition facility and:  
 
(a) search any person if the person subject of the search has in his/her actual 
possession, any audi ovisual recording device;  
 
(b) seize, remove or detain any audiovisual recording device or other object which 
appears to contain, or likely to contain evidence of an offense committed under 
the Anti -Camcording Act;  
 
(c) use reasonable force to remove any person or  object obstructing the authorized 
person in the exercise of any power conferred upon him/her by the Anti -
Camcording Act;  
 
(d) detain any person, within a reasonable time not exceeding eighteen (18) hours, 
found in any place which the authorized person is empo wered to enter and search 
if, after inquiry made, said authorized person has reasonable ground to believe 
that the person subject of the search is connected with the subject matter of the 
search and it is considered necessary to detain the person subject o f the search to 
be able to adequately perform the search; and  
 
(e) require the operator of an exhibition facility or any other person who appears to 
be at the time responsible for the control or management of the exhibition facility 
to give information or rend er assistance that may be necessary to enable the 
authorized person to carry out the functions under the law.  
 
3.3.8.6 Plant varieties  
 
Paragraph  3.134  
 
Regarding the topic of plant variety protection mentioned in the document, Chile would be grateful 
if the Philippines would comment on the current status of its process of accession to the UPOV 
Convention.  
 
Response : 
 
At present, the Philippines is not considering to become a member of UPOV 1991. 
Nevertheless, plant varieties that are new, distinct, uniform , and stable are protected 
under a sui generis system pursuant to Republic Act No. 9168 or the Plant Variety 
Protection Act of the Philippines.  
 
3.3.8.7 IP registration and enforcement  
 
Paragraph 3.138  
 
Regarding enforcement efforts made, Chile would appreciate the Philippines sharing more 
information on the aforementioned Action Plan on Enforcement, in particular, indicating more 
details on its operation and application.  
 WT/TPR/M/3 68/Add.1  
 
- 111 - 
 
  Response : 
 
The 2017 -2022 Philippine IPR Action Plan serves as a roadmap to carry  out 
synchronized efforts of all government agencies to fight counterfeiting and piracy. 
Under this Action Plan, the Philippines will continue to implement a holistic approach to 
IPR enforcement, as well as pursue an aggressive IP education program that cu ts across 
various players in the IP community. The Action Plan has seven (7) strategic initiatives, 
namely:  
 
1. Mainstream IP policy in the government;  
2. Scale up the promotion, protection and enforcement of IPR through the NCIPR;  
3. Ensure a speedy and quality disposition of IPR cases;  
4. Strengthen the legal infrastructure on IP;  
5. Enhance the capabilities of enforcement agencies and personnel involved in IPR 
enforcement;  
6. Intensify IP education initiatives; and  
7. Establish strong presence in international fora.  
 
4.5.2  Telecommunications  
 
Paragraph  4.100  
 
Paragraph 4.100, about telecommunications services in The Philippines, indicates that the fixed -
line penetration has remained largely stable. Regarding this subject, Chile would be thankful if The 
Philippines could poi nt out the evolution of the penetration rate of fixed telephone services in the 
country, from 2012 to the present.  
 
Response : 
 
From  year 2012  to 2013,  installed  fixed  line density  were  6.93 and 6.718  respectively.  For 
year 2014 to 2016, the teledensity has  decreased to 5.87, 5.72 and 5.66 respectively. 
The decline could be attributed to the availability of mobile phone services as 
subscribers prefer mobile phone service than fixed telephone  service.  
 
Paragraph  4.102  
 
Paragraph 4.102 indicates that basic telecoms services providers must obtain prior approval from 
both Houses of Congress to become a “Congressional Franchise”. Chile would thank The Philippines 
to further explain on the concept of “congressional franchise”. For example, what are the 
requireme nts, the fees and how is the process to obtain it.  
 
Response : 
 
Republic Act 7925 (Public Telecom Policy Act) Article VI, Sec. 16. States that no person 
shall commence or conduct the business of being a public telecommunications entity 
without first obtaini ng a franchise. The Legislative Franchise being issued by the 
Congress of the Philippines is required for public utility service providers.  
 
It is an authorization granted for the provision of any public utility service in the 
country. Among the  requiremen t by the congress  is a five-year technical  and feasibility  
study  and of the service  being applied and proof of legal  capacity.  
 
There are two tier requirement for the provision of telecom network facility services: 
Legislative Franchise  and authorization  from  the telecom  regulator,  the NTC.  A grantee  
of a franchise  can apply for authorization for a particular telecom service from the 
National Telecommunications Commission.  
 
The applicant shall prove to the Commission that it has the Legal, Technical, and 
Financial capacity to  provide  the service.  All applications  except  applications  for the 
provision  of value  added  services undergo quasi -judicial  process. The following should 
be provided:  
 WT/TPR/M/3 68/Add.1  
 
- 112 - 
 
   Proof of Legal Capacity : Franchise from  Congress;  
 Proof of Financial Capacity : Debt -to-Equity Ratio of  70/30;  
 Proof  of Technical Capacity  : Technical  Staff  with experience  in the 
provision  of public Telecommunication services  
 
Paragraph  4.108  
 
Paragraph 4.108 specifies that if a service has sufficient competition  to ensure a fair and 
reasonable rates or tariffs, the NTC may exempt the service from its rate or tariff regulation. But 
the authorities did not clarify the criteria to define “sufficient competition”. Chile would be thankful 
if The Philippines would clar ify the criteria that it uses to define “sufficient competition” in telecoms 
services rates or tariffs.  
 
Response : 
 
In general, competition in a relevant market is regarded as sufficient if no entity holds 
the ability to profitably sustain prices above com petitive levels, or restrict output, 
variety, quality or innovation below competitive levels. Thus, the notion of sufficient 
competition is related to the ability of the entity to behave independently of the actions 
and reactions of its competitors, custom ers, suppliers, or consumers. If there is 
sufficient competition, competitive pressure is sufficiently strong to constrain any entity 
from harming the process of competition and, ultimately, market outcomes.  
  
With respect to telecommunications services, a ssessing whether there is sufficient 
competition is therefore tantamount to considering the extent to which there are 
constraints on the players’ ability to profitably sustain rates and tariffs above 
competitive levels. Such constraints may come from the m arket position of current 
players, credible threat of future expansion by actual players or entry by potential 
players, the bargaining power of the customers, and the overall regulatory environment.  
 
4.5.3 Transport  
 
4.5.3.1 Aviation  
 
Paragraph  4.114  
 
Paragraph 4.114 says that Executive Order 29 or 2011 authorizes Philippines’ negotiators to offer 
in a bilateral air services agreement (ASA) up to the fifth freedom rights, but most of the ASAs in 
force are restrictive, covering only the third and fourth freedom. Chile would thank The Philippines 
to further comment in the effects of the Executive Order 29 by sharing the percentages of ASAs 
that include the fifth freedom and the ones up to the third and fourth freedom.  
 
Response : 
 
Under the records of the P hilippine Civil Aeronautics Board, there is a total of 66 ASAs 
between the Philippines and other sovereign countries. A total of 26 AS’s allow fifth 
freedom traffic rights or 39.3% of all ASA’s.  
 
However, some of these agreements only allow 5th freedom rig hts once the designated 
airlines of both parties execute commercial agreements between them.  
 
4.5.4 Tourism  
 
Paragraph  134 
 
Paragraph 4.134 indicates that applications for designation must be made to the Tourism 
Infrastructure and Enterprise Authority (TIEZA) and the minimum required investment in order to 
benefit from incentives is US$ 5 million, but exemptions may be granted.  
 
Chile would thank The Philippines to further comment on what are those exemptions. What are the 
requirement to apply to be exe mpt from the 5 US$ million minimum required?  
 WT/TPR/M/3 68/Add.1  
 
- 113 - 
 
  Response : 
 
Exemption from USD 5 million investment requirement is on “extremely meritorious 
cases” as may be determined and decided by TIEZA Board and in the development of 
Ecotourism TEZs and historical/cultur al/heritage TEZs.  
 
Paragraph  4.135  
 
Paragraph 4.135 says that during the review period, the Department of Tourism took steps to 
enhance the business environment of the Tourism sector. One of the initiatives to do that included 
cutting the regulatory red ta pe through the Regulatory Impact Assessment Programme. Chile 
would thanks the Philippines to share some examples of regulatory red tape that was cut. For 
example, what certificates or forms were eliminated.  
 
Response : 
 
The Department of Tourism is one of t he pilot agencies implementing RIA program in 
the country. The DOT’s objective is to use RIA to create a business -friendly environment 
where regulations are transparent, consistent and unnecessary rules are removed.  
 
Following are major accomplishments of the DOT’s RIA project:  
 
 Completion of ten (10) Regulatory Impact Statements;  
 Amendment in the sections of the Puerto Princesa City Local Ordinance – Tourism 
code  that imposes an excessive cost to travel and tour agency, tourist transport, 
and tour guides.  
 Technical assistance to Local Government Units in developing Red Tape Reduction 
Strategy; and  
 Extension of the accreditation validity of primary tourism enterprises from 1 year 
to 2 years to lessen administrative  costs.  
 
GOVERNMENT REPORT  
 
3.2.3 Intellectual property  
 
Paragraph 3.18  
 
Bearing in mind the position of the Philippines, mentioned in the paragraph, in the sense that 
participation in a future multilateral system of notification and registration of geogra phical 
indications (GIs) for wines and spirits should be voluntary, Chile would appreciate Philippines 
indicate whether there is a defined national regulation for its GI records.  
 
Response : 
 
Geographical indications are currently protected in the Philippines under the law on 
trademarks, pursuant to the IP Code, and in full compliance with the country’s 
obligations under the TRIPS Agreement. Nevertheless, the Philippines, through the 
IPOPHL, continues to develop possible enhancements of the GI prote ction system, 
including through the enactment of the appropriate legal issuance. Through a whole -of-
government approach, consultations with stakeholders, including the relevant 
government agencies and foreign trading partners, continue. The Philippines rem ains 
committed to adopting the appropriate measures in due time, with the view of 
strengthening the protection of geographical indications and in pursuit of its national 
development agenda.  
 WT/TPR/M/3 68/Add.1  
 
- 114 - 
 
  2.4 Services  
 
2.4.1 Information Technology -Business Process Manag ement (IT -BPM)  
 
Paragraph 2.19  
 
Paragraph 2.4.1 indicates that the Information Technology -Business Process Management (IT -
BPM)- is one of the country’s best -performing and employment -generating service industries over 
the past several years.  Chile would thankful if The Philippines further explains, the reasons 
observed for this success, especially concerning governmental policies that helped this 
development and the higher participation of women.  
 
Response : 
 
Advances in information and communication techn ology (ICT) have facilitated growth in 
the business process outsourcing (BPO) sector, making the Philippines among the 
world’s major BPO destinations. The sector’s economic influence in the country has 
tripled in the last ten years. Low labour costs, a hig hly skilled workforce and competitive 
ICT infrastructure have provided the major drivers of this growth. While contact centres 
represent the most important subsector in terms of revenue and employment, higher 
value added subsectors are also growing.  
 
IT-BPM enterprises benefit from streamlined business registration and better 
coordination procedures with government.  Policies were put in place to support the 
industry’s growth and development. These policies include, among others: 1) the 
addition of BPO/ IT-BPM in the priority areas for investment; 2) declaring IT buildings as 
vertical economic zones; and 3) allowing women to work night shifts, which was 
previously prohibited under the Philippines’ Labor Code.  
 
According to estimates from the Philippines S tatistics Authority more than 55 per cent of 
workers in the BPO sector are women. Women were present in medical transcription 
industries, data processing and call centre activities. Formerly, Philippine labour law 
prohibited women from working night shifts  (between 10 p.m. and 6 a.m.). In 2011, 
however, due to the growing contribution of the BPO sector to the national economy and 
since most BPO employees were women serving customers in different time zones, 
employers successfully lobbied for the repeal of t his provision.  
 
Subsequently, new requirements for employers were established, including 
sleeping/resting quarters, mandatory transport services for women doing night shifts 
and other social services, catering in particular to those with children.13  Repub lic Act 
No. 10028 (also known as the Expanded Breastfeeding Promotion Act of 2009) 
mandates workplaces to have a lactation station for nursing mothers, not less than 40 
minutes of lactation break for women and inclusion of breastfeeding programs as part of  
development program of companies.  
 
Paragraph  2.20 
 
Paragraph 2.20 indicates future statistics development to support Philippine’s priority in IT -BPM 
services. Chile would be thankful if The Philippines would give more detail on what statistics and 
data wi ll they work on in order to support their IT -BPM services industry.  
 
Response : 
 
Lack of services statistics including in IT -BPM is acknowledged in the current Philippine 
Development Plan and will be addressed. Timely, relevant, and quality official statistics  
are needed to track the performance of the sectors to serve as basis for strategic 
planning.  Data on the IT -BPM sector such as employment and revenue are being sourced 
from the IT and Business Process Association of the Philippines. The Philippi ne Statistics 
Authority, meanwhile, published in 2017, the 2014 Annual Survey of Philippines 
                                                
13 ILO Asia -Pacific Working Paper Series, Business Process Outsourcing in the Philippines: Challenges for 
Decent Work Lorenza Errighi, Charles Bodwell and Sameer Khatiwada December 2016  WT/TPR/M/3 68/Add.1  
 
- 115 - 
 
  Business and Industry for IT -BPM activities, covering industry data on sub -class, jobs, 
income generated, labor productivity, capital expenditures, among others.  Data on “gig 
economy” such as the number of people earning on outsourcing platforms is yet to be 
determined and methodology on how to gather this information is yet to be developed.  
 
3.2.2 Services  
 
Paragraph  3.14 
 
Paragraph 3.2.2 indicates that Philippine s is committed to according appropriate consideration to 
the needs of MSME service suppliers. Chile would be thankful if The Philippines would inform in 
which areas of their services sector MSMEs play a fundamental role, and how they equilibrate the 
protection and consideration policies with the ASEAN agreement entering into force.  
 
Response : 
 
Micro, small and medium enterprises accounted for 99. 57% (911,768) of the total 
establishments in the country. Micro -enterprises took the largest share  with 89.63% 
followed by small enterprises with 9.50% and medium enterprises (0.44%).14 Almost 
70% of the total MSMEs are services related subsectors.15 
 
The Philippine Development Plan 2017 -2022  includes strategies that will enable micro 
and small services orien ted enterprises to improve production networks by supporting 
linkages between MSMEs and large corporations as well as develop more inclusive 
business models and social enterprises. Access to finance will be improved by 
streamlining and simplifying loan pro cesses and providing literacy trainings. 
Productivity, efficiency and resilience will be enhanced through increased access to 
technology and through entrepreneurship programs.  
NEW ZEALAND  
SECTION: SUMMARY  
WT/TPR/S/368, summary, page 7, para 10  
“…. Pre -shipment inspection is mandatory for all bulk or break bulk cargo. All shipments are 
classified according to risk. Customs clearance times for high risk consignments (about 50% of all 
consignments) are between one and two days, while moderate risk consignments require about 
four hours for clearance. The Philippines accepted the WTO Trade Facilitation Agreement on 27 
October 2016; it has also submitted a notification regarding its Category A commitments.”  
 
SECTION 3: TRADE POLICIES AND PRACTICES BY MEASURE  
 
3.1: Measures Directly Affecting Imports  
 
WT/TPR/S/368, section 3, page 30, para 3.3 and para 3.8  
“Bureau of Customs' administrative order (AO) No. 243 of January 2010 makes pre -shipment 
inspection (PSI) mandatory for all bulk or break bulk cargo.  PSI covers quantity, quality, and tariff 
classification. Six companies have been approved by the Bureau of Customs to provide this 
service. For other goods, no PSI is required.”  
 
Further Section 3, paragraph 3.8 states:  
 
“The Philippines accepted the Trad e Facilitation Agreement on 27 October 2016…. ” 
Question  
                                                
14 Based on the 2016 List of Establishments Census of the Philippine Statistical Authority . 
15 In terms of sectoral distribution, (% of total MSMEs) - Wholesale and Retail Trade: Repair of Motor 
Vehicles and Motorcycles (46.13%); 2) Accommodation and Food Service Activities (13 .13%); (3) 
Manufacturing (12.69%); (4) Other Service Activities (6.19%); and (5) Financial and Insurance Activities 
establishments (4.35%).  Classification is based on the Philippine National Accounts and may not be compatible 
with the W120 Services Sectora l Classification List.  WT/TPR/M/3 68/Add.1  
 
- 116 - 
 
   Could the Philippines outline the reason for Bureau of Customs' administrative order (AO) 
No. 243 of January 2010 making the pre -shipment inspection mandatory for all bulk or 
break bulk cargo?  
Respons e: 
This is an advance clearance system for bulk and break -bulk, so the purpose is to 
facilitate trade, in compliance with the Revised Kyoto Convention.  
There is a need to obtain and secure critical information for the proper examination, 
classification, an d valuation of bulk and break -bulk cargoes using measures compliant 
with customs international best practices and global trade standards. Revenue collection 
will be protected and maximized by ensuring the determination of the correct weight, 
quantity, qual ity and description of bulk and break -bulk cargoes and the correct 
assessment of duties thereon.  
While AO No. 243 provides for the inspection at the port of origin of the bulk and break -
bulk cargoes. , The required information does not include the value of the shipment and 
tariff classification.  Only information on the description, quality, quantity,  port of 
loading, shipper, among others. are required.  The value and tariff classification are 
information that are still being provided by the importer themselves, not by the surveyor 
or inspector.  Thus, AO 243 is compliant with the WTO TFA.  
The Bulk a nd Break -bulk enhancement program of the Bureau of Customs is lodged to 
harmonize the objectives of the Revised Kyoto Convention. It was implemented to 
ensure transparency and to protect and enhance revenue collection due to rampant 
smuggling and unscrupul ous schemes of smugglers.   Bulk and break -bulk cargoes are 
shipments that are not containerized and due to the nature of such, smuggling has been 
a major concern.  
It appears that AO 243 is contrary to the pre -shipment inspection provision of the WTO Trade  
Facilitation Agreement (WTO -TFA). Paragraph 5 (Pre -shipment Inspection) of Article 10 Formalities 
Connected with Importation and Exportation and Transit) of the WTO -TFA states:  
 
“5.1. Members shall not require the use of pre -shipment inspections in relati on to tariff 
classification and customs valuation”  
 
3.1: Measures Directly Affecting Imports  
WT/TPR/S/368, section 3.3.6, page 54, para 3.111  
“The nationality requirement of bidders continues to restrict wholly -owned foreign entities from 
participating in public procurement. For procurement of goods and consulting services, it requires 
that at least 60% of the interest of partnerships or the outstanding capital of corporations belong 
to citizens of the Philippines. For infrastructure projects, it requires 7 5% Filipino ownership. 
Foreign bidders are only eligible to participate (i) when allowed under any treaty or international or 
executive agreement; (ii) when the foreign bidder is a citizen, corporation or association of a 
country whose laws or regulations grant reciprocal rights to citizens, corporations, or associations 
of the Philippines; (iii) when the goods sought to be procured are not available from local 
suppliers; or (iv) when there is a need to prevent situations that defeat competition or restrain  
trade. Of the 930,557 award notices issued between 2012 and 2016, 524 contracts (0.05 per cent) 
were awarded to foreign suppliers.”  
Questions  
 Of the 524 contracts awarded to foreign suppliers between 2012 and 2016, how many of 
these were awarded through t he third exception that allows for foreign participation: 
“when the goods sought to be procured are not available from local suppliers”?  
Response :  
It cannot be determined how many of the 524 contracts awarded to the foreign 
suppliers from 2012 to 2016 involve goods that are not available from local suppliers WT/TPR/M/3 68/Add.1  
 
- 117 - 
 
  based on the Philippine Government Electronic Procurement System (PhilGEPS) -
generated report.  More particularly, there is no facility/platform where it can be verified 
whether:  
 the head of the procuring entity or his duly authorized representative of the 
procuring entities involved in the said 524 contracts has issued a certification 
that, after d iligent market research conducted by the procuring entity, the goods 
sought to be procured are not available from Local Suppliers; or  
 the procuring entity has secured a certification from the appropriate Government 
regulatory body, that based on its availa ble records, the goods sought to be 
procured are not available from Local Suppliers, when applicable,  
It is necessary to check Clause 5.2 of the Instructions to Bidders and the Bid Data Sheet 
of each bidding documents associated with the 524 contracts awar ded to foreign 
suppliers.  
 Does the Philippines have any plans to amend the nationality requirements in its public 
procurement legislation that restrict foreign -owned entities from participating in public 
procurement?  
Response : 
The President of the Philippi nes issued Memorandum Order No. 16, dated 17 November 
2017 directing NEDA and its member agencies to exert utmost efforts to lift or ease 
restrictions on certain investment areas or activities with limited foreign participation, 
which include, among others , practice of particular professions, where allowing foreign 
participation will redound to the public benefit; and contracts for the construction and 
repair of locally -funded public works.  
Moreover, the preference for “domestic entities” in the Procurement  of Goods has been 
repealed by Republic Act No. 10667 or the Philippine Competition Act.  
 How do foreign suppliers know which procurement opportunities they are able to 
participate in?  
Response : 
If the foreign supplier is registered in the PhilGEPS, it will  be automatically notified of 
procurement opportunities through the Electronic Bulletin Board feature of the PhilGEPS  
If the foreign supplier is not registered in the PhilGEPS, it has to research on 
procurement opportunities which are required to be:  
 Posted in the PhilGEPS website, website of the Procuring Entity’s website, if 
available, and any conspicuous place in the premises of the Procuring Entity 
concerned.  
 Advertised at least once in one (1) newspaper of general nationwide circulation 
which has been regularly published for at least two (2) years before the date of 
issue of the advertisement.  
 
However, advertisement shall not be required for contracts to be bid with an Approved 
Budget of the Contract (ABC) as follows:  
 
 For goods, ABC of PhP 10 mil lion and below;  
 For infrastructure projects: APC of PhP 15 million and below;  and  
 For consulting services; ABC of PhP 5 million and below.  
 
SECTION 4: TRADE POLICIES BY SECTOR  
4.1: Agriculture  WT/TPR/M/3 68/Add.1  
 
- 118 - 
 
  WT/TPR/S/368, section 4.1.3, page 60, para 4.7, para 4.10 and para 4.11  
The Secretariat report points to a decline in the size and economic contribution of the agriculture 
sector over the reporting period (e.g. table 1.1).   It explains that agricultural policy remained 
geared towards ensuring food security, in particular towards achieving self -sufficiency in rice, 
sugar and maize (para 4.7).  
 In the case of rice however, it reports that ‘about one third of all rice -producing households and 
well over two thirds of all households were net buyers of rice, according  to the Survey of Food 
Demand for Agricultural Commodities 2012; these farmers and households are unlikely to benefit 
from the high level of tariff protection and price support for rice’ while ‘about a quarter of farmers' 
revenues were due to support polic ies’ (para 4.10 -4.11).  
Question  
 What reform plans does the Philippines have for the agriculture sector and in particular the 
rice sector, so that it meets its government’s objectives to make a positive contribution to 
its economy?  
Response : 
The reform pla n hinges on the passage of the Rice Tariffication Act.  Agriculture has 
been under -supported historically and the reform being envisaged is one that will 
support the sector that it will become more competitive, either on the border or the 
export markets. T his includes improving infrastructure, the value chain and other 
elements.  
4.2: Fisheries  
WT/TPR/S/368, section 4.2, page 67, para 4.37  
Secretariat report (para) 4.37 notes that ‘… Duty and tax rebates on fuel (as per Executive Order 
209) have … expired.’  Philippines ASCM notification (G/SCM/N/38/PHL) similarly notes that ‘duty 
and tax rebates on fuel consumption for commercial fishing operators of Philippine registry in the 
high seas as provided in Section 35, paragraph c were not implemented by the Depar tment of 
Agriculture since funds were not appropriated to the Department for the afore -mentioned 
purpose.’  
Question  
 Can the Philippines confirm that it no longer has any programmes establishing duty or tax 
rebates for fuel used in fishing operations?  
Response : 
It should be clarified in the Secretariat Report that EO 209 on duty and tax rebates on 
fuel did not expire.  At the same time, the Philippines can confirm that there were no 
availments made under this program.  
WT/TPR/S/368, section 4.2, page 66,  para 4.31 -4.35 
The Philippines and Secretariat reports do not elaborate on the Fisheries Industry Support 
Programs notified by the Philippines in ASCM notification (G/SCM/N/38/PHL), which has the stated 
objective of ‘To encourage commercial fishing vessel  operators to fish farther in the Exclusive 
Economic Zone and beyond’.  
Question  
 To what extent has this objective been met and how does the Philippines ensure that these 
programmes do not contribute to IUU fishing or overfishing and overcapacity?  
Response : WT/TPR/M/3 68/Add.1  
 
- 119 - 
 
  Providing incentive for tax and rebate on fuel consumption under EO 209 was limited to 
commercial fishing operators of Philippine registry to encourage them to fish farther in 
the exclusive economic zone and beyond. The availment of the incentive by the f our (4) 
fishing companies/enterprises out of the 57 eligible enterprises (2005 -2010) made no 
significant impact.  
To prevent IUU fishing or overfishing and overcapacity, the Philippines has in place 
fisheries conservation and management measures, fisheries licensing system and other 
regulatory requirements (for example, International Fishing Permit and Certificate of 
Clearance, catch logsheet).  
4.3: Energy  
WT/TPR/S/368, section 4.3.1, page 67, para 4.39 and para 4.52  
The Secretariat report highlights the Phi lippine Energy Plan (PEP)  2017-40 which establishes ‘a 
roadmap to ensuring sustainable, secure, sufficient and accessible energy’ and para 4.52 outlines 
the National Renewable Energy Programme (NREP) to expand and diversify renewable energy.    
However, th e report does not comment on the level of energy access in the Philippines. According 
to Asian Development Bank 2016 report ‘Fossil Fuel Subsidies in Asia, Trends, Impacts and 
Reforms’ almost a third of the population in the Philippines have no access to e lectricity.    
Question  
 New Zealand commends Philippines’s early actions to remove subsidies on fossil fuels and 
targets to expand renewable energy. Given the benefits of fossil fuel subsidy reform and 
development of renewable energy, is the Philippines con sidering further measures to 
increase access to basic energy services for those in need?   
Response : 
The Philippine Development Plan 2017 -2022 identified the following strategies to 
continue the development of the energy sector as follows:  
 Support the required massive investments and fast track the implementation of 
infrastructure projects to improve power generation;  
 Encourage competition to drive down electricity costs;  
 Pursue the development of national gas industry;  
 Ensure that the needed transmis sion facilities are implemented on time to 
efficiently transmit electricity to various load centers and interconnect the entire 
grid;  
 Prioritize the provision of electricity services to the remaining unelectrified off -
grid, island, remote, and last -mile co mmunities to achieve total household 
electrification by 2022.  
INDONESIA  
SECRETARIAT REPORT  
 
Summary  
 
Page 6 Para 8  
 
“Nevertheless, some notifications remain outstanding, notably in the area of agriculture .” 
 
Question:  
 
1. Would the Government of the Philippines give clarification on this matter?  
 
Response : 
 WT/TPR/M/3 68/Add.1  
 
- 120 - 
 
  The Philippines has submitted its domestic support notification to the WTO for the years 
2011 -2015 last 15 February 2018 which are circulated as document G/AG/N/PHL/48 -
52. 
 
Page 7 Para 14  
 
“Exports  of rice, corn, and sugar remain restricted and may be exported only if there is a 
surplus .” 
 
Question:  
 
2. Would the Government of the Philippines give clarification on this matter?  
 
Response : 
 
The Philippines can opt not to export products depending on the current domestic 
situation since there is no discipline for this. However, notifications should be made.  
 
Page 7 Para 16  
 
“A new Food Safety Act was promulgated in 2013; its implementing legislation entered into force 
in 2015. However, the Philippines' SPS-related import requirements for food, which 
appear to be complex, remain largely unchanged. ” 
 
Question:  
 
3. Would the Government of the Philippines clarify about the complexity of its SPS -related 
import requirements for food as mentioned above?  
 
Response : 
 
The Philippines does not consider its SPS -related import requirements for food under 
the Food Safety Act as ‘complex’.  The competent authority for raw and unprocessed 
food products is the Department of Agriculture while the Food and Drug Administration 
is the competent authority for processed food.    
 
Page 8 Para 19  
 
“The WTO waiver allowing the  Philippines to defer the tariffication of its quantitative  
restrictions (QRs) on rice expired in  June 2017. A bill on tariffication of the QRs is  
pending in parliament as at December 2017.  In the  meantime, the Philippines has  extended 
its WTO waiver -related tariff concessions on rice and other  commodities.  Thus, as at December 
2017, the Philippine rice import regime remains under the  status quo. ” 
 
Question:  
 
4. Would the Government of the Philippines give recent updates on the development of this 
issue?  
 
Response : 
 
At the Lower House of Congress, the bill is under deliberation by the Committee on 
Appropriations before being submitted to the Plenary for approval. A t the Upper House 
of Congress, a version of the bill is being deliberated by the Senate Committee on 
Agriculture and Food. Both Houses will transmit the bill to the Bicameral Conference 
Committee for a final bill to be approved.  
 
The approved version of th e bill will then be transmitted to the Office of the President 
for approval. Note that both the Legislative and Executive branches of Government have 
given priority to this proposed legislation.  
 
Page 8 Para 20  WT/TPR/M/3 68/Add.1  
 
- 121 - 
 
   
“Local content  requirements are applied to bioethanol : production must first exhaust  
domestic feedstock sources  before using any imported equivalent. ” 
 
Question:  
 
5. Would the Government of the Philippines give clarification on this matter?  
 
Response : 
 
Republic Act (RA) No. 9367 or the Biofuels Act of  2006 was implemented to increase the 
contribution of biofuels in the country’s energy mix thereby reducing its dependence on 
imported fossil -based fuels, enhance the quality of the environment, and create 
opportunities for countryside socio -economic devel opment.  
 
From the medium to long -term, the Department of Energy together with the National 
Biofuels Board will embark on revisiting/re -evaluating the blending requirement.  
 
3 TRADE POLICIES AND PRACTICES BY MEASURE  
 
3.1 Measures Directly Affecting Imports  
 
3.1.1 Customs procedures, valuation, and requirements  
 
Page 30 Para 3.3  
 
“Bureau of Customs' administrative order (AO) No. 243 of January 2010 makes pre -shipment 
inspection (PSI) mandatory for all bulk or break bulk cargo. PSI covers quantity, quality, an d 
tariff classification.  Six companies have been approved by the Bureau of Customs to provide 
this service. For other goods, no PSI is required.”  
 
Question:  
 
6. Would the Government of the Philippines give clarification on why its mandatory PSI also 
covers tariff classification? How can the Government of the Philippines make sure that this 
policy is consistent with the Article 10.5.1 of Trade Facilitation Agreement?  
 
Response : 
 
The Philippines considers Administrative Order No. 243 as implemented by CMO No. 18-
2010 to be consistent with the provisions of the Trade Facilitation Agreement, 
specifically Article 10 Sub -article 5.1.  The requirement of a load port survey (LPS), is 
not for the purpose of determining the actual value and classification of the goods.   
Instead, the LPS is only for the purpose of accurately ascertaining the actual quantity 
and quality of the bulk or break -bulk cargo that it covers.  
 
3.3 Measures Affecting Production and Trade  
 
3.3.1 Standards and other technical requirements  
 
Page 46 Pa ra 3.62  
 
“As of October 2017, there were 10,091 PNSs; the share aligned with international standards was 
79.9%, up from 78.5% in October 2011. Where PNSs are not aligned with international standards, 
this is due mainly to long standing business practices, climatic conditions, the absence of specific 
international standards, and the need for higher requirements than international standards. The 
authorities underlined their objective to strongly increase the share of internationally aligned 
standards by 2022. ” 
 WT/TPR/M/3 68/Add.1  
 
- 122 - 
 
  Question:  
 
7. Would the Government of the Philippines share their experience on its mechanism in order to 
enhance it standards to be aligned with international standards?  
 
Response : 
 
The Bureau of Philippine Standards (BPS) formulates Philippine National Standards 
(PNS) through its Technical Committee Method and Fast Track Method.  
 
Through the Technical Committee Method, Technical Committees (TC) are established 
composed of representatives from the academia, trade/ industry, consumer, 
professional groups, research institution/s, government agencies, and testing 
institutions. The draft standards undergo a series of deliberation; the draft is  circulated 
for two months to all sectors to seek technical views and comments.  
 
Meanwhile, the fast track method allo ws the BPS to circulate the international standards 
without modifications for comments prior to adoption.  The draft standards are 
circulated for at least sixty (60) days before adopting said standards as PNS.  
 
Further, the BPS is guided by the ISO IEC Gui de 21 parts 1 and 2 on regional or national 
adoption of International Standards and other International Deliverables in aligning its 
standards to international standards.  
MALAYSIA  
Para 14, p. 7  
 
Registration and documentation requirements for exporters are  similar to those for importers. Only 
registered companies are allowed to export. No export taxes are levied in the Philippines, apart 
from exports of plantation logs which are subject to a tax of 20%. Minimum export prices for corn 
and rice are no longer applied. Export licences are required for a wide range of products. Exports 
of rice, corn, and sugar remain restricted and may be exported only if there is a surplus. Some tax 
incentives are contingent on export performance.  
 
Pursuant to paragraph 14, some tax incentives are contingent on export performance. Can the 
Philippines elaborate on these incentives? Please clarify how the measure is consistent with the 
commitments on the prohibition of export subsidies.  
Response : 
These measures are currently be ing revisited in line with the review of the Philippines’ 
overall tax and incentive scheme. Under the proposed Tax Reform for Acceleration and 
Inclusion (TRAIN) 2, outdated provisions of existing investments laws will be eliminated 
taking into consideratio n the current business models and engagements in free trade 
arrangements. It is noted that presently, there is not much difference between the 
domestic and export markets since both are equally contestable.    
 
Once the law is passed, we will notify as app ropriate.  
 
2 TRADE AND INVESTMENT REGIMES  
 
2.3.2.3 EFTA  
Para 2.17, page 25  
EFTA and the Philippines launched free trade negotiations in March 2015. The Philippines –EFTA 
FTA was signed on 28 April 2016 in Bern.18 Ratification is still pending in the Philip pines and 
Iceland, according to the authorities.  
 WT/TPR/M/3 68/Add.1  
 
- 123 - 
 
  Can the Philippines provide an update on the ratification process and when the agreement can 
enter into force? What are the laws that had to be amended, if any, for the agreement to come 
into effect?  
Response : 
The President signed the instrument of ratification for the PH -EFTA FTA last 8 December 
2017 and the Senate ratified the on 5 March 2018. In accordance with the provisions of 
the Agreement, the FTA will enter into force on the first day of the th ird month following 
the Philippines’ deposit of its instrument of ratification. The instrument of notification 
was deposited on 16 March at the Norwegian Embassy in Manila.  
 
The Philippines negotiated the PH -EFTA FTA within the parameters of its existing l aws, 
rules, and regulations. As such and taking into account the independence of the 
executive and legislative processes, all provisions of the Agreement are in accordance 
with Philippine laws and existing international commitments such as those undertaken  
under the WTO.  
 
2.4 Investment Regime  
 
Para 2.26, p. 26  
 
The foreign investment regime of the Philippines is governed, inter alia , by the 1987 Constitution 
and the Foreign Investments Act of 199126, which regulate the entry and establishment of foreign 
investors, and Executive Order No. 226 (or Omnibus Investment Code (OIC) of 1987), which 
stipulates investors' (national and foreign) eligibility for incentives.  
 
Foreign Investments Act covers all act ivities, except banking and other financial services. It 
provides for the establishment of a "regular" Foreign Investment Negative List (FINL) of 
areas/activities where FDI is limited (Annex A2[fdi]):  
 
a. List A – foreign ownership is prohibited or limited ( in terms of foreign ownership 
caps) by mandate of the Constitution and specific laws; and  
b. List B – foreign ownership is limited for reasons of security, defence, risk to health 
and morals, and protection of SMEs.  
 Can the Philippines explain further on th e areas of activities and the extent of the 
Constitution mandate and specific laws under List A?  
 Based on paragraph 2.26, does safeguarding SMEs afford protection to domestic 
production?  
Response : 
Please refer to the 10th RFINL which could be accessed at  
http://www.neda.gov.ph/wp -content/uploads/2014/04/EO98withannex.pdf .   
 
The “protection of SMEs” under List B of the FINL refers to the limitation on foreign 
equity of up to 40% only. It does not afford protection to domestic production.  
 
Para 2.31, page 28  
 
The Philippines continues to encourage investment in targeted areas, which are listed in the 
Philippine Investment Priorities Plan (a three -year rolling plan), includin g manufacturing and 
agriculture. Incentives include duty -free importation of capital goods and a four -year tax holiday. 
The 2017 plan reflects the Government's objective to spread economic growth opportunities 
domestically and encourage especially micro, s mall and medium enterprises (MSMEs) to benefit 
from local and global value chains. The ten priority investment areas under the 2017 plan are 
based on the President’s "Zero to 10 -point" Socio -Economic Agenda, AmBisyon Natin 2040, and 
the Philippine Developm ent Plan 2017 -2022, and focus on competitiveness, skills development, WT/TPR/M/3 68/Add.1  
 
- 124 - 
 
  technology upgrading, infrastructure modernization, and improvements in the overall business 
environment. With the theme, "Scaling -Up and Dispersing Opportunities,” the Plan includes mor e 
inclusive and innovation -driven activities. One of the strategies is through the Inclusive Business 
(IB) Model project wherein medium and large agribusiness and tourism enterprises are encouraged 
to engage micro and small enterprises as raw material supp liers or service providers. The BOI 
provides full assistance from pre - to post -establishment of investment activities in the country.  
 
 Can the Philippines provide further details regarding the Investment Priorities Plan? Is this 
rolling plan updated every  3 years to include more areas or are they confined to the ten 
priority investment areas highlighted in the Report? Are details on this Plan available 
online?  
Response : 
The Investment Priorities Plan (IPP) contains the list of investment activities being 
encouraged by the government to achieve the poverty reduction and inclusive growth 
goals of the country.  
 
While the IPP is a three -year rolling plan, it is reviewed annually.  
 
Further details on the 2017 IPP are available at the website of the Philippine B oard of 
Investments (www.boi.gov.ph).  
3.1 Measures Directly Affecting Imports  
 
3.1.1 Customs procedures, valuation, and requirements  
Para 2.27, p. 27 (ASEAN)  
The Philippines continues to restrict foreign investment in a number of activities including 
agriculture, fisheries, telecom services, and public utilities, but it has also taken some liberalizing 
steps. In the area of professional services, the FDI restrictions in place at the time of the last 
Review have been eliminated (subject to certain excep tions and reciprocity). The Philippines has 
also liberalized banking services.28 The remaining FDI restrictions are made public in a transparent 
manner through a consolidated negative list.  
 
 What is the rationale behind the continuous restriction in sectors such as telecom services 
and public utilities?  
Response : 
This is a limitation provided in the Philippine Constitution. Kindly refer further to the 
reply on Malaysia’s questions on the Government report on plans to further liberalize the 
services sectors which cites initiatives to amend the Public Service Act and issuance of 
Memorandum Order No 16, among others.  
Para 2.28, p. 27 (ASEAN)  
The FINL is subject to review every two years to reflect any new legislation amending or repealing 
laws affecting  investment. Following the last TPR (March 2012), the ninth FINL was promulgated 
on 29 October 2012 (Executive Order No. 98); it entered into force on 13 November 2012.29 The 
most recent (tenth) FINL was issued on 29 May 2015 by Executive Order No. 184 and  entered into 
force on 13 June 2015.30 The authorities expect the eleventh FINL to be issued in 2017.  
 
 What is the current status on the 11th FINL?  
Response : 
The draft of the 11th RFINL is for consideration and approval by the National Economic 
and Develop ment Authority (NEDA) Board, thus, has not been issued.  
 WT/TPR/M/3 68/Add.1  
 
- 125 - 
 
  Other (ASEAN)  
 
The passing of the Philippines Halal Export Development and Promotion Program under the Halal 
Act by the Philippines Congress on 16 May 2016 will pave the way for the Philippines to es tablish a 
comprehensive program for the development of their Halal ecosystem and promote halal exports. 
It will be formulated to cover the entire value chain for food, products and services, agricultural 
production, manufacturing, export and marketing assi stance and application of Halal certification 
standards.  
 
 What are the conditions set by the body for the export and trade of Halal products, 
processes and services?  
Response : 
Pursuant to Section 6(f)of Republic Act (R.A.) No. 10817, otherwise known as the Halal 
Export Promotion and Development Act of 2016 and Section 16(f)of its Implementing 
Rules and Regulations on its mandate to develop and promote Halal exports,  a Philippine 
National Halal Certification Scheme (PNHCS) has to be developed.   
 
As such, the Technical  Working  Group for Halal  which was  created by the Halal Board 
was tasked to craft  the PNHCS. This document  contains the general guidelines and 
procedures of certification by the Halal Certification Bodies (HCBs) in the Philippines. 
Based on th e draft PNHCS, scope of certification covers the ff:   
1. Food Products / Beverages / Food Supplements  
2. Food Premises/Establishment  
3. Consumer durables (define as non -food)  
4. Cosmetics and Personal Health Care Products  
5. Pharmaceuticals  
6. Packaging  
7. Farm Systems Include s Agricultural Inputs and Feeds  
8. Slaughterhouses  
9. Logistics  
10. Others  
The Philippine Accreditation Board, as the national accreditation body, for HCBs had 
participated in the review of this document done by the Technical  Working  Group for 
Halal.  Note: The draft  PNHCS is yet to be adopted or  approved  by the Halal Board, within 
this month.  
 
3.1.5 Import prohibitions, restrictions, and licensing (MOH)  
 
 Philippines has not mentioned any specific provisions on importation/exportation of human 
remains, human tissues, microorganisms and pathogenic substances. The Disease Control 
Division, Ministry of Health Malaysia would like to seek clarification whether t he 
Government of Philippines, has imposed any license/permit requirements under the 
country legislation and guidelines to import/export human remains, human tissues, 
microorganisms and pathogenic substances?  
 If the country imposed such requirements, we se ek information on the name of 
Government agency issuing the license/permit and whether fees will be imposed on any 
license/permit issued by the Authority.  
Response : 
The Philippines has been implementing, through the Bureau of Quarantine of the 
Department o f Health, the provisions on importation/exportation of human remains, 
human tissues, microorganisms and pathogenic substances. These provisions are 
governed by Republic Act No. 9271, known as the “Quarantine Act of 2004”, and 
stipulated in the Section 58 o f Rule 10, and Sections 60 and 61 of Rule 11 of its 
Implementing Rules and Regulations (IRR).  WT/TPR/M/3 68/Add.1  
 
- 126 - 
 
   
3.3.8 Intellectual property rights (MOH)  
 
Para 3.126, p. 56  
 
The Universally Accessible Cheaper and Quality Medicines Act of 2008 (R.A. 9502 of 2008) allows 
parallel imports of patented drugs and medicines. This law also allows for the issuance of a special 
compulsory license for the importation of patented drugs an d medicines, which are primarily for 
domestic consumption and are subject to the payment of adequate remuneration to the patent 
owner either by the exporting or importing country. The compulsory license also contains a 
provision directing the grantee of th e license to exercise reasonable measures to prevent the re -
exportation of such products imported.  
 
 Appreciate if Philippines could indicate what kind of reasonable measures are taken to 
prevent the re -exportation of the products imported through this special compulsory 
license? Does it include special markings or labelling?  
Response : 
The Philippines has  not yet issued a special compulsory license for the importation of 
patented drugs and medicines. Nonetheless, the provisions of the special compulsory 
license in the Universally Accessible Cheaper and Quality Medicines Act of 2008 were 
inspired by the dec ision of 30 August 2003 of the WTO General Council on the 
implementation of paragraph 6 of the Doha Declaration on the TRIPS Agreement and 
Public Health.  Accordingly, the implementation of the special compulsory license will 
include the undertaking by the  grantee of the license to exercise reasonable measures 
within the means and administrative capacity of the grantee to prevent re -exportation of 
the products covered by the special compulsory license. Such reasonable measures may 
include special markings o r labelling. IPOPHL, together with the Department of Health 
(DOH) and the Food and Drug Authority (FDA), is in the process of enhancing and 
developing the regulations, guidelines, and procedures on the issuance of special 
compulsory licenses, which will al so cover what may be considered reasonable 
measures to prevent re -exportation.  
Para 3.8, p. 31  
 
The Philippines accepted the Trade Facilitation Agreement on 27 October 2016. It notified its 
category A commitments in August 20145. The authorities indicate that the notification of category 
B and C commitments is under preparation.  
 
 Can the Philippines indicate when Category B and C commitments will be notified?  
Response : 
The Philippines submitted its notification on Categories A, B and C on 30 January 2018.  
 
3.1.3 Tariffs  
 
Para 3.12, page 31   
 
Cane sugar and rice receive the highest tariff protection, with rates of 65% and 50% respectively. 
14.9% of tariff lines are nuisance tariffs, and 41.9% carry a tariff greater than zero and up to 5% 
(Chart 3.1). A greater share of duty -free lines and a reduction of nuisance tariffs would facilitate 
the Philippines integration into global value chains.  
 
 The Report indicates that 14.9% of tariff lines are nuisance tariffs. Can Philippines explain 
the sectors that attribute to these nuisance tariffs and if there is any plan in the near 
future to eliminate them?  
 WT/TPR/M/3 68/Add.1  
 
- 127 - 
 
  Response : 
Footnote d of Table 3.1 (page 31 of Secretariat Report) refers to tariff rates which are 
greater than zero, but less than or equal to 2%.  At eight -digit level, there are 1,609 
tariff lines, out of 10,813 total tariff lines, with rates within those range.  
 
Under Executive Order (EO) 20, s. 2017 which provides for the Philippine MFN tariff 
schedule from 2017 to 2020, the number of 8 -digit tariff lines with tariff rates less than 
2% were reduced from 2,295 (or 21% share of total tariff lines) in 2016 to 1,60 9 tariff 
lines (15% share) in 2017.   
 
The products whose tariffs were reduced to 0% under EO 20 include:  
 
 certain products (e.g., agricultural, chemical) covered under the Agriculture and 
Fisheries Modernization Act (AFMA). Under the AFMA, which expired i n 2015, said 
products may be imported duty -free subject to the submission of Certificate of 
Eligibility or Certificate of Accreditation issued by the Department of Agriculture;  
 
 certain capital equipment; and  
 
 products covered by the Philippine Expansion Schedule under the Information 
Technology Agreement (ITA II). The Philippines eliminated the duties on 116 tariff 
lines under ITA II in 2017 and is committed to eliminate the tariffs on an additional 
95 tariff lines by 2019.  
 
3.3.6 Government procurement  
 
Para 3.99, p. 52  
 
Government procurement accounts for about 10% to 11% of GDP. The Philippines has been 
making efforts to establish an open, transparent and competitive government procurement regime 
and relevant reforms have been carried out since early 2000s. However, despite the progress, 
there continues to be high risk of corruption in the system.77The restriction on foreign suppliers' 
participation in the sector also remains as a concern. The Philippines is not yet a party or observer 
of the WTO Agree ment on Government Procurement (GPA). It has not included government 
procurement provisions or chapters in its free trade agreements with trading partners.  
 
 Is the Philippines considering to be an observer or party to the GPA?  
 Can the Philippines elaborat e in detail on the initiatives that have been taken (if any) to 
open the sectors for foreign participation . 
Response : 
 
The Philippines is currently assessing the possibility of joining the WTO GPA as an 
observer. Pending the outcome of the assessment, the Philippines is continuously 
undergoing capacity development activities on the WTO GPA through the participation of 
representatives of the Government Procurement Policy Board in the WTO’s global and 
Asian workshops. The Philippines will be hosting a nationa l workshop on government 
procurement by the second quarter of 2018.    
 
At present, the preference for “domestic entities” in the Procurement of Goods has been 
repealed by Republic Act No. 10667 or the Philippine Competition Act. Likewise, the 
President of  the Philippines issued Memorandum Order No. 16, dated 17 November 2017 
directing NEDA and its member agencies to exert utmost efforts to lift or ease 
restrictions on certain investment areas or activities with limited foreign participation, 
which include,  among others, practice of particular professions, where allowing foreign 
participation will redound to the public benefit; and contracts for the construction and 
repair of locally -funded public works.  
 WT/TPR/M/3 68/Add.1  
 
- 128 - 
 
  Para 3.111, p. 54  
 
The nationality requirement of bidders continues to restrict wholly -owned foreign entities from 
participating in public procurement. For procurement of goods and consulting services, it requires 
that at least 60% of the interest of partnerships or the outs tanding capital of corporations belong 
to citizens of the Philippines. For infrastructure projects, it requires 75% Filipino ownership. 
Foreign bidders are only eligible to participate (i) when allowed under any treaty or international or 
executive agreeme nt; (ii) when the foreign bidder is a citizen, corporation or association of a 
country whose laws or regulations grant reciprocal rights to citizens, corporations, or associations 
of the Philippines; (iii) when the goods sought to be procured are not avail able from local 
suppliers; or (iv) when there is a need to prevent situations that defeat competition or restrain 
trade. Of the 930,557 award notices issued between 2012 and 2016, 524 contracts (0.05 per cent) 
were awarded to foreign suppliers.  
 
Based on paragraph 3.111, 524 contracts (0.05 per cent) were awarded to foreign suppliers. Could 
the Philippines indicate in which sectors?  
Response : 
The Philippine Government Electronic Procurement System (PhilGEPS) 
platform/Electronic Bulletin Board does not requ ire the Procuring Entity to indicate the 
particular sector involved in its procurement, thus the data being asked is not available.  
4 TRADE POLICIES BY SECTOR  
 
4.1.2.2 Tariff quotas  
Para 4.5, p. 59  
 
The tariff quota year runs from February to January, and licences are allocated twice per quota 
year. They are issued through a "systematic distribution procedure" combined with first -come -
first-served allocation when quotas are underutilized. There is a b eginning -year pool (annual 
commitment quantity plus unused quota volumes from the previous quota year), where priority 
access is given to: (i) licensees that have not surrendered any of their previous year's quota 
allocation, and have utilized at least 80%  of the previous year's allocation from the beginning -year 
pool and used 30% from the mid -year pool by the last working day of May; and (ii) qualified 
entrants (first -time licensees or licensees that failed to obtain a quota share in the previous quota 
year). The mid -year pool is fed by surrendered quota allocations by end -May of each quota year. 
Any tariff quota volumes remaining in the beginning -year or mid -year pools are distributed to 
interested applicants on a first -come -first-served -basis. A special r egime applies for rice 
(Section  4.1.5)  
 Could the Philippines explain the details on the usage of "systematic distribution 
procedure" combined with first -come -first-served allocation when quotas are 
underutilized?  
Response : 
 
Unutilized quotas may be returne d or be subjected to penalty (i.e. recalled) and said 
volumes are added to the pool for SDP. Unallocated volumes after SDP are made 
available on a First -Come, First -Served basis until exhausted, as stated in DA 
Administrative Order 8 series of 1997.  
 
4.1.3  Domestic support  
 
Para 4.9, p. 60  
 
The main trade policy instruments remain unchanged: price support, input subsidies, insurance 
programmes, credit schemes, and buffer stocks, in addition to Green Box -type general services. 
The Philippines has yet to prov ide up -to-date domestic support notifications (the most recent year 
covered is calendar year 2010).11 The Philippines does not have a bound Total AMS commitment; 
domestic support is subject to a 10% de minimis ceiling.  WT/TPR/M/3 68/Add.1  
 
- 129 - 
 
   
 Could the Philippines indicate when  it intends to submit the notifications for domestic 
support?  
 Based on paragraph 4.9, the recent year of Domestic Support notification was year 2010. 
Could the Philippines explain the reason of the pending notifications?  
Response : 
 
The Philippines has subm itted its domestic support notification to the WTO for the years 
2011 -2015 last 15 February 2018 which are circulated as document G/AG/N/PHL/48 -
52. 
 
4.5.4 Tourism  
 
Para 4.133, p. 81  
 
Notwithstanding the importance the Government attaches to growth, significant market access and 
barriers to foreign investment remain in the tourism sector. 100% foreign equity is allowed in 
accommodation facilities. However, lands may be leased to foreign investors only for a period of 
50 years, renewable once for not m ore than 25 years. For tourism projects, private land may only 
be leased to foreigners for investments of a minimum of US$5 million. Minimum paid -up capital for 
100% foreign -owned restaurants is US$2.5 million; otherwise foreign ownership is limited to 40% . 
 
 Para 4.133 emphasises that significant market access and barriers to foreign investment 
remains in the tourism sector. Can the Philippines explain the procedure for land 
acquisition once the 75 year period of leasing is over? Is the Philippines  consider ing to 
liberalize further the tourism sector in the future?  
Response : 
 
Furthermore, the Philippines already maximized 100% foreign equity for hotel/ lodging 
services.  On the other hand, other sub -sectors under the travel and tourism services 
namely: restaurants, travel agencies and tour operator services and professional 
congress organizers shall still be subject to existing domestic rules and regulations.  
 
GOVERNMENT REPORT  
 
2.4.4  Logistics  
Para 2.30, p. 10  
 
In addition, a number of improvement projects for the port system, including the Roll -on-Roll-off 
(RoRo) network and conduct of feasibility and engineering studies, were undertaken to ensure 
efficient operations and prepare the country’s port system for regional integration with the rest of 
the ASEAN.  
 In order to promote regional integration  with the rest of the ASEAN countries , does the 
Philippines allow right -hand drive vehicles from other countries to enter the Philippines via 
RoRo service to any of its ports? What are the terms and conditions imposed by the 
Philippines’ authority with reg ards to this matter?  
Response : 
 
Importation of all right ‐hand drive vehicles and its parts are banned from entering any 
Philippine port.  
 Foreign investor may renegotiate with a Filipino land owner for a new lease term after 
the lapse of the 75 year initial lease but not to exceed a total number of 99 years from 
date of o riginal lease agreement.  
 WT/TPR/M/3 68/Add.1  
 
- 130 - 
 
  Pursuant to Republic Act No. 8506, it shall be unlawful for any person to import, cause 
the importation of, register, cause the registration of, use, or operate any vehicle with 
its steering wheel right -hand side thereof in any highway, street or road, whe ther 
private or public or of the national or local government except such vehicles that are 
acknowledged as vintage automobiles, manufactured before 1960, in showroom 
condition, and/or are to be utilized exclusively for officially and legally sanctioned 
motorsports events, and off -road special purpose vehicles.  
 
On RoRo operations, Executive Order (EO) No. 204 (s. 2016) was signed to expand the 
coverage of EOs 170 and 170 -A (s. 2003) and to include Chassis RoRo (Cha -Ro), 
addressing the need to further redu ce logistics cost and support and promote 
competitiveness of the export sector, among others. With the expansion of the coverage 
of RoRo operations (i.e. Cha -Ro), containers on chassis can now be loaded unto the 
RoRo ship by prime mover (or tractor head) a t the port of origin and unloaded from the 
RoRo by a different prime mover (tractor head) at the port of destination.  Cha -Ro 
service is seen to address the left -hand, right -hand drive issue among ASEAN countries 
since prime movers from either side of the route would be used in loading and 
discharging of containers from the RoRo ships.  
3.2.2 Services  
 
Para 3.14, p. 13  
The Philippines is committed to according appropriate consideration to the needs of MSME service 
suppliers and will continue to push for the exercise of options by member countries (i.e. where 
commitments will be made, apply horizontal limitations to all services; invoke general exceptions 
to justify existing regulations or to enact new ones in pursuance of legitimate public policy 
concerns; an d invoke restrictions to safeguard the balance -of-payments).  
 
 Does the Philippines intend to liberalise further the services sectors?  
 Could the Philippines update on the progress made to facilitate MSMEs participation in the 
services sectors?  
Response : 
 
The President provided guidance through Memorandum Order No. 16, s. 2017, on the 
priority investment areas or activities where equity restrictions will be reviewed and 
these include a number of services sectors such as the following:  
 
 Private recruitment,  whether for local or overseas employment;  
 
 Practice of particular professions, where allowing foreign participation will 
 redound to the public benefit;  
 
 Contracts for the construction and repair of locally -funded public works;  
 
 Public services, except ac tivities and systems that are recognized as public utilities 
 such as transmission and distribution of electricity, water pipeline distribution 
 system, and sewerage pipeline system;  
 
 Culture, production, milling, processing, and trading except retailing, of rice and 
 corn and acquiring by barter, purchase or otherwise, rice and corn and the by -
 products thereof;  
 
 Teaching at higher education levels;  
 
 Retail trade enterprises; and  
 
 Domestic market enterprise.  
 WT/TPR/M/3 68/Add.1  
 
- 131 - 
 
  Based on the Philippine Development Plan 2017 -2022, the strategies to facilitate MSMEs 
participation in general and relevant to the services sectors include accelerating HRD 
and skills development to make education more industry appropriate and supporting 
linkages between MSMEs and large corporations t o facilitate increased participation of 
MSMEs in global value chains.  
SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU  
WT/TPR/S/368  
 
2. TRADE AND INVESTMENT REGIMES  
 
2.2. Trade Policy Formulation and Objectives  
 
Page 22-23 (P ara 2.4. / Para 2.5) 
 
The National Economic and Development Authority (NEDA) is the Philippines’s economic 
development and planning agency. The NEDA Board, chaired by the President, set s the principles 
economic policy direction, and the NEDA Secretariat serves as the Board’s r esearch and technical 
support arm. The NEDA Board is supported by several Cabinet -level inter -agency committees, 
including the Committee on Tariff and Related Matters. The Philippines Development Plan 2017 -
2022 focus on the competitive of the economy throu gh open services markets, good regulatory 
practices and sound competition policy and institutions.  
 
Question(s):  
 
With regard to formulating trade policies and making policy decisions, how does the NEDA consult 
the public and experts for opinions involvin g the policy -making process? Is there a similar 
mechanism or channel for foreign investors and stakeholders to make policy suggestions?  
 
Response : 
 
All agencies and interagency bodies have contact points for non -government 
stakeholders inputs into trade po licy making process. For tariffs on goods, the Tariff 
Commission, an attached agency of the NEDA, conducts public hearings on proposed 
tariff modification and accession to trade agreements. NEDA also consults concerned 
agencies and experts on proposed PH p ositions and draft requests and offers for trade in 
services negotiations. These agencies in turn consult their respective stakeholders. The 
NEDA likewise participates in the One Country One Voice Advocacy and Consultation 
forum launched by the DTI in 2011  to enable stakeholders to participate in trade policy 
formulation and trade negotiation.  
 
Foreign investors can make policy suggestions or submit position papers through the 
foreign chambers association or through the local chamber of commerce and indust ry, 
which are in turn submitted to the NEDA for consideration. Concerned government 
agencies are consulted in the crafting of the RFINL.  
 
3.  TRADE POLICIES AND PRATICES BY MEASURE  
 
3.1 Measures Directly Affecting Imports  
 
3.1.1 Customs procedures, valuati ons, and requirements  
 
Page 30 (Para 3.4.) 
 
The Customs Modernization and Tariff Act (RA No. 10863) of 30 May 2016 has the aim to 
modernize customs rules, expedite customs procedures, reduce opportunities for corruption, and 
improve customs service delivery. The Act introduced more severe penalties for misclassification, 
undervaluation, and corrupt behaviour of officials.  
 WT/TPR/M/3 68/Add.1  
 
- 132 - 
 
  Question(s):  
 
When are the Customs Modernization and Tariff Act (RA No. 10863) and the relevant rules for 
implementation scheduled to be announced? If an importer does not comply with this act, what 
are the penalties? Are different customs clearance procedures set up according to the 
characteristics of the goods? What are the relevant application fees?  
 
Response : 
 
The copy of the Customs Modernization and Tariff Act is available in  the Official Gazette: 
http://www.officialgazette.gov.ph/2016/05/30/republic -act-no-10863/  
 
The Philippines, through the Bureau of Customs, is currently drafting the implementing 
rules and regulations in the form of customs administrative orders (CAO) on a  per topic 
basis to be approved by the Secretary of Finance.   
 
To date, the CAOs which are in effect involve the establishment of the Authorized 
Economic Operators Program (CAO 5 -2017); the clearance of postal items (CAO 3 -
2017); customs clearance of acco mpanied and unaccompanied baggage of travelers and 
crew (CAO 01 -2017); conditionally tax - and/or duty -exempt importation of returning 
residents and overseas Filipino workers (CAO 06 -2016); consolidated shipment of duty - 
and tax -free ‘balikbayan’ boxes (CAO  05-2016); establishment of an advance ruling 
system for valuation and rules of origin (CAO -03-2016); and imported gods with de 
minimis value and not subject to duties and taxes (CAO 02 -2016).  
 
The draft CAOs can be accessed in the CMTA microsite: 
https:// www.dof.gov.ph/index.php/issuances/cmta_irr/  
 
3.3 Measures Affecting Production and Trade  
 
3.3.1 Standards and other technical requirements  
 
Page 46 (Para 3.6.5 ) 
 
The Philippines Accreditation Bureau (PAB) is the national accreditation body of the Philippines . It 
covers the accreditation of inspection, testing and calibration laboratories and assesses the 
conformance of laboratories’ quality management systems with international guidelines. As the 
September 2017, PAB has accredited 243 conformity as sessment bodies (76 testing laboratories, 
41 calibration laboratories, six medical laboratories, four inspection bodies, and 16 certification 
bodies.)  
 
Question(s):  
 
Has t he Philippines Accreditation Bureau (PAB) set up norms for halal certification product 
categories, including raw materials, processing, and distribution? We would appreciate it if the 
Philippines would share and provide more details about marketing promotion strategies on halal -
certified products.  
 
Response : 
 
Section 6(f) of Republic  Act No. 10817 or the Halal Export Promotion and Development 
Act of 2016 and Section 16(f) of its Implementing Rules and Regulations mandate the 
development and promotion of Halal exports as well as the development of the 
Philippine National Halal Certific ation Scheme (PNHCS).  
 
A Technical Working Group for Halal, which was created by the Halal Board, was tasked 
to craft the PNHCS. This document will contain the general guidelines and procedures of 
certification by the Halal Certification Bodies (HCBs) in the Philippines. Based on the 
draft PNHCS, scope of certification covers the following products and services:  
 
 Food Products / Beverages / Food Supplements;  
 Food Premises/Establishment;  WT/TPR/M/3 68/Add.1  
 
- 133 - 
 
   Consumer durables (define as non -food);  
 Cosmetics and Personal Health  Care Products;  
 Pharmaceuticals;  
 Packaging;  
 Farm Systems Includes Agricultural Inputs and Feeds;  
 Slaughterhouses;  
 Logistics;  
 Others.  
 
As the national accreditation body for HCBs, PAB is a member of the Technical Working 
Group and had participated in the re view of the PNHCS. The draft PNHCS is yet to be 
adopted or approved by the Halal Board with a target to do so within this month 
(March).  
 
3.3.8  Intellectual property rights  
 
3.3.8.2 Patents  
 
Page 55 (Para 3.123 ) 
 
The term of a patent is 20 years from the filing date. A patentable invention is "any technical 
solution of a problem in any field of human activity which is new, involves an inventive step and is 
industrially applicable". The Law lists non -patentable inve ntions (e.g. discoveries, scientific 
theories, and mathematical methods). In the case of drugs and medicines, the mere discovery of a 
new form or new property or new use of a known substance, or the mere use of a known process, 
are not patentable. Also exc luded from patent protection are schemes, rules, and methods of 
performing mental acts, playing games or doing business, and computer programs; methods for 
the treatment of human or animal body by surgery or therapy and diagnostic methods practiced 
on the human or animal body; and plant varieties or animal breeds or essentially biological process 
for the production of plants or animals.  
 
Question(s):  
 
According to the Philippines’ Intellectual Property Code, inventions related to computer software 
are excluded from eligible subject matters protected by patents. Such inventions can only be 
protected by copyright. However, as copyright protects exclusively the outward form of an 
invention and the ideas thereof, its protection does not extend to the concre te steps of 
implementing such ideas. In recent years, we have seen the US, Japan, and the EU allow patent 
protection of inventions related to computers. We’d like to know if the Philippines will consider 
including inventions related to computer software as  eligible subject matters protected by patents.  
 
Response : 
 
The Philippines can confirm that under Section 172.1(n) of the IP Code, a computer 
program per se is among the literary and artistic works that may be the subject of 
copyright protection. Copyrigh t protection of computer programs extends to the original 
expression of ideas of its author, the computer programmer. Hence, the protection 
extends to the source and object codes, as well as the literary and artistic elements in 
the program.  
 
Thus, under S ec. 22 of the IP Code, programs for computers are identified as non -
patentable inventions that are excluded from patent protection, since they are treated 
as mere abstract ideas and lacking in technical effect.  
 
However, if the computer program is installe d in a certain apparatus or machine and it is 
able to produce technical effect, then the invention is not directed to the computer 
program. In such case, the computer program ceases to be an abstract idea, and it may 
be considered as an invention relating to a product or process.  
 
The Philippines, through IPOPHL, has adopted the Guidelines on the Examination 
Guidelines for the Information Communications Technology and Computer -Implemented WT/TPR/M/3 68/Add.1  
 
- 134 - 
 
  Inventions, which serves as a guide to IPOPHL patent examiners in the  examination of 
patent applications. The Guidelines is available at the IPOPHL website.  
 
3.3.8.4  Trademarks  
 
Page 57 (Para 3.131 ) 
 
A trade mark must be registered in the Philippines to be protected against trademark 
infringement. Well -known marks are simi larly protected when these are declared as such by 
competent authorities. Trade names or business names, whether registered or not, are protected 
against any subsequent use by a third party which is likely to mislead the public.  
 
Question(s):  
 
Is IPOPHL the competent authority for declaring well -known marks? On what facts or grounds does 
IPOPHL determine if a trademark is  well -known? Are the declarations based on the applications of 
proprietors or on court decisions? Should the declared marks, well -known  or not, be registered 
with IPOPHL? We would like to know any related provisions.  
 
Response : 
 
The Philippines confirms that IPOPHL is one of the competent authority for declaring 
whether a mark is well -known. Under Rule 101(d) of the IPOPHL Rules and Regul ations 
on Trademarks, Service Marks, Trade Names and Marked or Stamped Containers of 2017 
(TM Regulations of 2017), the “competent authority” for purposes of determining 
whether a mark is well -known refers to the courts, the IPOPHL Director General, and th e 
Director of the Bureau of Legal Affairs of IPOPHL.  
 
Under Rule 103 of the TM Regulations of 2017, in determining whether a mark is 
well-known, the following criteria or any combination thereof may be considered: (a) 
the duration, extent and geographical area of any use of the mark, in particular, the 
duration, extent and geographical area of any promotion of the mark, including 
advertising or publicity and the presentation, at fairs or exhibitions, of the goods and/or 
services to which the mark applies; ( b) the market share, in the Philippines and in other 
countries, of the goods and/or services to which the mark applies; (c) the degree of the 
inherent or acquired distinction of the mark; (d) the quality -image or reputation 
acquired by the mark; (e) the ex tent to which the mark has been registered in the 
world; (f) the exclusivity of registration attained by the mark in the world; (g) the 
extent to which the mark has been used in the world; (h) the exclusivity of use attained 
by the mark in the world; (i) t he commercial value attributed to the mark in the world; 
(j) the record of successful protection of the rights in the mark; (k) the outcome of 
litigations dealing with the issue of whether the mark is a well -known mark; and (l) the 
presence or absence of i dentical or similar marks validly registered for or used on 
identical or similar goods or services and owned by persons other than the person 
claiming that the mark is a well -known mark.  
 
The declaration of a mark as well -known will be made based on the ev idence presented 
by a party to a case, and upon finding of the competent authority that the mark meets 
the criteria set out in the IP Code and the Rules. In this regard, Section 123(e) of the IP 
Code states that “in determining whether the mark is well -known, account shall be 
taken of the knowledge of the relevant sector of the public rather than of the public at 
large, including knowledge in the Philippines which has been obtained from the 
promotion of the mark”.  
 
For purposes of a declaration that a mark is well -known, the mark need not be 
registered with IPOPHL. Under Sec. 131.3 of the IP Code, the owner of a well -known 
mark as defined under Section 123.1(e) of the IP Code, which is not registered in the 
Philippines, may, against an identical or confusing ly similar mark, oppose its 
registration, or petition the cancellation of its registration or sue for unfair competition, 
without prejudice to availing himself of other remedies provided for under the law.  
 WT/TPR/M/3 68/Add.1  
 
- 135 - 
 
  On the other hand, under Section 147 of the IP Code, “[t]he exclusive right of the owner 
of a well -known mark defined in Subsection 123.1(e) which is registered in the 
Philippines, shall extend to goods and services which are not similar to those in respect 
of which the mark is registered: Provided, Th at use of that mark in relation to those 
goods or services would indicate a connection between those goods or services and the 
owner of the registered mark: Provided further, That the interests of the owner of the 
registered mark are likely to be damaged b y such use.”  
 
Is the protection of a proprietor, excluding a third party’s use of the  trade name or business name 
(whether registered or not), which is likely to mislead the public, stipulated in the IP Code? If so, 
what are the provisions? Can the proprie tor of a foreign trade name or business name pursue 
protection on the basis of such provisions?  
 
Response : 
 
The Philippines confirms that the protection for trade names from use by a third party 
that is likely to mislead the public is stipulated in the IP Code. Section 165 of the IP 
Code and Rule 104 of the TM Regulations of 2017 prohibit the use of a name or 
designation as a trade name if its nature or its use is contrary to public order or morals 
and if, in particular, it is liable to deceive trade circle s or the public as to the nature of 
the enterprise identified by that name. Notwithstanding any laws or regulations 
providing for any obligation to register trade names, such names shall be protected, 
even prior to or without registration, against any unla wful act committed by third 
parties. In particular, any subsequent use of the trade name by a third party, whether as 
a trade name or a mark or collective mark, or any such use of a similar trade name or 
mark, likely to mislead the public, shall be deemed unlawful.  
 
In accordance with the above provisions, if the use of a trade name by a third party is 
unlawful, i.e., in particular, if it is likely to mislead the public, then the proprietor of a 
foreign trade name may pursue protection on the basis of Sect ion 165 of the IP Code.  
REPUBLIC OF KOREA  
2 Trade and Investment Regimes  
 
2.4 Investment Regime  
 
Page 26 (Para 2.26), Page 27 (Para 2.27 and Para 2.29)  
 
According to the Para 2.26, 2.27 and 2.29, the Philippine government has liberalized restriction on 
foreign investment in some areas.  
 
 My delegation wants to know whether the Philippine government has any long -term plan to 
liberalize foreign ownership cap.  
 
Response : 
 
The Philippines is currently reviewing the 1987 Constitution and several other laws wit h 
a view to lift or ease foreign equity restrictions. In December 2016, the President signed 
Executive Order No. 10 creating the 25 -member consultative committee tasked to 
review the Constitution. The said committee has already started consultations with 
various government agencies on certain provisions of the Constitution.  
 
The President has also directed the National Economic and Development Authority 
(NEDA) Board, through Memorandum Order No. 16, s. 2017, to take immediate steps to 
lift or ease existing  restrictions on foreign participation in the following investment 
areas or activities:  
 
1. Private recruitment, whether for local or overseas employment  
2. Practice of particular professions, where allowing foreign participation will redound 
to the public benef it 
 WT/TPR/M/3 68/Add.1  
 
- 136 - 
 
  3. Contracts for the construction and repair of locally -funded public works  
 
4. Public services, except activities and systems that are recognized as public utilities 
such as transmission and distribution of electricity, water pipeline distribution 
system, a nd sewerage pipeline system  
 
5. Culture, production, milling, processing, and trading except retailing, of rice and 
corn and acquiring by barter, purchase or otherwise, rice and corn and the by -
products thereof  
 
6. Teaching at higher education levels  
 
7. Retail trade enterprises  
 
8. Domestic market enterprise  
 
 My delegation also wants to know whether the Philippine government will reform business 
environment, which is considered not to be business -friendly for foreign investors. For exa
mple, if foreigners own less t hat 40 percent of a company share, foreigners are not allowe
d to take high ranking positions such as president and treasurer in the company.  
 
Response : 
 
This question is related to the previous question. The equity restriction in certain 
activities are cur rently under review as mentioned above. Once the equity restrictions 
are relaxed, foreigners will then be allowed to take higher positions in the said 
activities.    
TURKEY  
THE GOVERNMENT REPORT  
 
2. Domestic Policies And Initiatives To Sustain Long -Term Growth And Improve The Business 
Environment For Inclusive Growth, 2.2 Enhancing Competition Policy and the Regulatory 
Environment, pg. 6, 2.10  
 
It is stated in the Government Report that “ To identify and eliminate regulations and laws that 
hamper doing bus iness in the country, 2.10. the Philippines rolled out “Project Repeal” in June 
2016 to cut red tape and streamline business transactions and processes. The project supports the 
Government’s policy of eliminating laws that place a heavy regulatory burden o n businesses and 
improve the country’s overall competitiveness. Improvements are planned in more complex areas 
of competitiveness such as in infrastructure, government bureaucracy, tax rates and tax 
regulations, including education, research and developmen t, and disaster response.”  
 
Question:  Could the Philippines give further explanation about this project, particularly regarding 
the regulation changes?  
 
Response : 
 
Project Repeal has collaborated with the Commission on Higher Edu cation (CHED) and 
signed a Memorandum of Agreement (MoA) in June 2017 to engage faculty members 
from Jose Rizal University  who will provide technical support through policy research. 
Moreover, a MoA will be signed between the National Competitiveness Coun cil, 
Department of Trade and Industry and the University of the Philippines Law Center -
Office of National Administrative Register (UP Law Center -ONAR).  All repealed, 
amended, and consolidated regulations will be filed with ONAR to complete the repeal 
process. 
 Project Repeal is a collaboration of 88 government agencies where an aggregate of 
4,837 policy issuances were reviewed with a view to repeal outdated rules and reduce 
the cost of business.  
 WT/TPR/M/3 68/Add.1  
 
- 137 - 
 
  THE SECRETARIAT REPORT  
 
1. Economic Environment, 1.3.2 Trends and patterns in FDI, pg. 20, 1.48  
 
It is stated in the Secretariat Report that “ Further success in attracting FDI inflows has been 
hampered by a number of factors such as lack of good infrastructure, FDI restrictions (Section 
2.[investment regime]), and weak competition environment. The authorities noted that steps have 
been taken to address the issues, including steadfast implementation of the competition law, 
drawing up a national com petition policy, and avoiding regulations that unduly discourage new 
entrants. ”  
 
Question:  Could the Philippines provide detailed information about the steps that have been taken 
in relation with FDI legislation? (Elimination of FDI restrictions, avoidanc e of unnecessary 
bureaucracy etc.)  
 
Response : 
 
Laws have been passed and/or amended since the Philippines’ last Trade Policy Review 
in 2012 in order to remove restrictions on foreign investments. These include: 
1) allowing the full entry of foreign banks i n the Philippines; 2) lifting of the cabotage 
restrictions imposed on foreign operators; and 3) opening up of various professional 
services, subject to certain exceptions and reciprocity.  
 
The President provided guidance via Memorandum Order No. 16, s. 201 7, on the priority 
investment areas or activities where current equity restrictions will be reviewed. These 
include the following:  
 
1. Private recruitment, whether for local or overseas employment  
2. Practice of particular professions, where allowing foreign pa rticipation will 
redound to the public benefit  
3. Contracts for the construction and repair of locally -funded public works  
4. Public services, except activities and systems that are recognized as public 
utilities such as transmission and distribution of electricity, water pipeline 
distribution system, and sewerage pipeline system  
5. Public services, except activities and systems that are recognized as public 
utilities such as transmission and distribution of electricity, water pipeline 
distribution system, a nd sewerage pipeline system  
6. Culture, production, milling, processing, and trading except retailing, of rice 
and corn and acquiring by barter, purchase or otherwise, rice and corn and the 
by-products thereof  
7. Teaching at higher education levels  
8. Domestic ma rket enterprise  
At present, there is an ongoing review of the 1987 Constitution by a 25 -member 
Consultative Committee created by the President through EO No. 10. The Committee is 
expected to complete its review in six months or until June this year. It wil l submit its 
recommendations and proposals to the President, who will transmit these to Congress.  
 
3.1.3.2 Trade Policies and Practices by Measure – Measures Directly Affecting Imports – 
Tariffs – Tariff Quotas, pgs. 34, para. 3.17  
 
It is stated in the Se cretariat Report that “For 34 tariff lines the out -of-quota rate is equal to the 
in-quota rate; there is effectively no tariff quota on these lines. ” 
 
Question: Could the Philippines explain the purpose/mind -set of the equality between out -of and 
in-quota rates for these 34 tariff lines in practice?  
Response : 
 
This tariff structure is the result of the implementation of the reduction commitments of 
out-quota rates.  WT/TPR/M/3 68/Add.1  
 
- 138 - 
 
   
3.1.5 Trade Policies and Practices by Measure – Measures Directly Affecting Imports – 
Import  Prohibitions, Restrictions and Licensing, pg. 39, para. 3.32  
 
It is stated in the Secretariat Report that “A vast range of goods is subject to licences or permits 
when imported. For certain products, multiple permits or licences are required, and informa l 
payments have been reported by the business community. The import licensing regime is 
regulated mainly by the Customs Modernization and Tariff Act of 30 May 2016. Import licensing is 
intended, inter alia, to safeguard public health, national security and  welfare, and to meet 
international treaty obligations regulating certain products. Costs for the licence or permit depend 
on its validity period, the product, and import quantities; additional inspection fees may also 
apply. ” 
 
Question: As one of WTO memb ers ratifying the Trade Facilitation Agreement, could the 
Philippines specify whether there will be any measures taken for facilitating the import regime in 
terms of both narrowing the vast range of goods that are subject to licensing and easing the 
comple xity in the licensing procedures?   
 
Response : 
 
The general direction of the Philippines is to simplify and automate the processes.  
 
3.1.6.3 Trade Policies and Practices by Measure – Measures Directly Affecting Imports – 
Anti-Dumping, Countervailing, and Safeguard Measures – Other Measures, pgs. 42 -43, 
paras. 3.42  
 
It is stated in the Secretariat Report that “Under Section 714 of the Customs Modernization Tariff 
Act, the President may im pose an additional duty of up to 100% on goods from any country that 
discriminates against Philippine exports. If discrimination persists or increases after the duty is 
imposed, the President may prohibit the importation of goods of that country or establi sh import 
quotas, if in the national interest. Although this measure has not been used during the period 
under review, it adds an element of uncertainty to the Philippines' trade regime. ” 
 
Question: Can these additional duties exceed the bound MFN rates? If yes, could the Philippines 
explain the legal rationale under the GATT and the WTO Agreements that justifies parties to 
impose additional duties should a country discriminate against other parties’ exports?  
 
Response : 
 
The Philippines can confirm that the duties can exceed the bound MFN rates and will be 
pursued according to applicable domestic and international trade remedy laws.  
 
 
3.3.6 Government procurement, pp. 54, para. 3.111  
 The Philippines is currently in the process of improving its automated system for 
processing import clearances in line with the national program to enhance the National 
Single Window. The TradeNet system is being prepared for live operation by the middle 
of 2018.  This will allow parties involved in trade to lodge information and documents to 
fulfill all import, export and transit -related regulatory requirements.  
 
In the meantime,  some agencies have automated their licensing processes. For example, 
the Food and Drug Administration (FDA) of the Department of Health has instituted an 
electronic system for the processing of import authorization (License to Operate and 
Certificate of Product Registration).   A License to Operate (LTO) as food distributor -
importer needs to be secured from the FDA while a Certificate of Product Registration 
(CPR), a pre -market approval certificate, needs to be obtained for each and every 
product prior to importation. The electronic system for the processing of import 
authorizat ion can be accessed through the FDA website ( https://www.fda.gov.ph ) e-
portal.  
 WT/TPR/M/3 68/Add.1  
 
- 139 - 
 
  It is mentioned in the report that “The nationality requirement of bidd ers continues to restrict 
wholly -owned foreign entities from participating in public procurement. For procurement of goods 
and consulting services, it requires that at least 60% of the interest of partnerships or the 
outstanding capital of corporations bel ong to citizens of the Philippines. For infrastructure projects, 
it requires 75% Filipino ownership. Foreign bidders are only eligible to participate (i) when allowed 
under any treaty or international or executive agreement; (ii) when the foreign bidder is  a citizen, 
corporation or association of a country whose laws or regulations grant reciprocal rights to citizens, 
corporations, or associations of the Philippines; (iii) when the goods sought to be procured are not 
available from local suppliers; or (iv) when there is a need to prevent situations that defeat 
competition or restrain trade. Of the 930,557 award notices issued between 2012 and 2016, 524 
contracts (0.05 per cent) were awarded to foreign suppliers.”  
 
Question:  As the Philippines is getting rea dy for the Build, Build, Build Program, which will cover a 
number of big -scale infrastructural projects, could the Philippines explain if it has plans for a more 
accessible government procurement policy which would welcome foreign participants openly?  
 
Response : 
 
At present, the preference for “domestic entities” in the Procurement of Goods has been 
repealed by Republic Act No. 10667 or the Philippine Competition Act. Likewise, the 
President of the Philippines issued Memorandum Order No. 16, dated 17 November 2017 
directing NEDA and its member agencies to exert utmost efforts to lift or ease 
restrictions on certain investment areas or activities with limited foreign participation, 
which include, among others, practice of particular professions, where a llowing foreign 
participation will redound to the public benefit; and contracts for the construction and 
repair of locally -funded public works.  
 
2. Table A2.2 Tenth foreign investment negative list, May 2015, p.94 -95 
 
As it is stated in the Tenth foreign i nvestment negative list, in the Secretariat Report, “Domestic 
market enterprises with paid -in equity capital of less than the equivalent of US$200,000”  and 
“Domestic market enterprises which involve advanced technology or employ at least 50 direct 
employee s” are restriction subtitles for FDI.  
 
Question:  Could the Philippines give further explanation regarding these restrictions? (i.e. the 
definition of domestic market enterprises, the grounds on which these restrictions are imposed, 
and whether there is an y plan to abolish/amend these restrictions)  
 
Response : 
 
More than 40% foreign own ership of a domestic market enterprise is allowed as long as 
the paid -in capital is a minimum of US$200,000.00, or its equivalent. Employing a 
minimum of 50 direct employees or using advanced technology may allow a paid -in 
capital of less than US$100,000.0 0, or its equivalent (RA 7042, as amended by RA 
8179).  
 
The Philippine government issued Memorandum Order (MO) No. 16, dated November 21, 
2017, which directs the NEDA Board and its member agencies to take immediate steps 
to lift or ease existing restrictio ns on foreign participation in certain investment areas 
and activities. Domestic market enterprise is one of the identified investment areas 
under said memorandum order.  
 
  Domestic market enterprise refers to an enterprise which produces goods for sale, or 
renders services to the domestic market entirely or if exporting, consistently export 
below 60% of its output (RA 7042, as amended by RA 8179).  
 WT/TPR/M/3 68/Add.1  
 
- 140 - 
 
  BRAZIL , FOLLOW -UP QUESTIONS  
 
Line 22 – Inputs/Comments: “The assessment of the micr obiological identification was guided by 
NMIS Memorandum Circular No.9 -2008-5 Series of 2008 “Guidelines on the Assessment of 
Microbiological Quality of Fresh, Chilled and Frozen Meat”. The aforementioned guideline serves as 
the guideline for both locally produced and imported meat. While the Philippines is implementing 
its surveillance program to ensure food safety, the conduct of laboratory testing for meat, both 
local and imported, are done only when there are reports of adverse findings of contamination .” 
 
With regards to the aforementioned NMIS Memorandum Circular No. 9 -2008-5, could the 
Philippines clarify if there is differentiation between the requirements (i.e. the microbiological 
limits) which apply to meat that is destined for consumption and meat  that is destined for further 
processing by local industrial plants? Are there other requirements that apply to cooked/processed 
meat for consumption or are they the same ones that apply to the products listed in NMIS 
Memorandum Circular No. 9 -2008-5? 
 
Response : 
 
There is no differentiation on the requirements (i.e., microbiological limits) of meat 
destined for consumption and those that are destined for further processing by local 
processing plants.  
CHINA , FOLLOW -UP QUESTIONS  
 
Part I.  Questions based on Report by the Secretariat (WT/TPR/S/368)  
 
Summary, Para 5  
 
“Attracting further FDI has been hampered by factors such infrastructure problems and restrictions 
on foreign ownership.”  
 
1. Please further explain the restrictions on foreign investment ownership . Are there any 
differences between the conditions of market access of foreign investment by foreign state -owned 
enterprises and that by foreign private enterprises in the Philippines?  
 
Response : 
 
The 10th Foreign Investment Negative List (FINL) provides f or the areas/activities 
where there are limitations in the participation (or ownership) of foreign nationals by 
mandate of the Philippines’ 1987 Constitution, specific laws, or for reason of security, 
defense, risk to health and morals.  These limitations apply whether a foreign enterprise 
is private or state -owned. For details on restrictions, refer to: http://boiown.gov.ph/db -
main -final/foreign -investments/.  
 
Page 27, Para 2.27  
 
“The Philippines continues to restrict foreign investment in a number of activities including 
agriculture, fisheries, telecom services, and public utilities, but it has also taken some liberalizing 
steps. In the area of professional services, the FDI restrictio ns in place at the time of the last 
Review have been eliminated (subject to certain exceptions and reciprocity). The Philippines has 
also liberalized banking services.”  
 
2. Please elaborate on the liberalizing steps that the Philippines has taken and the p rofessional 
services in which FDI restrictions have been eliminated.  
 
Response : 
 
The Professional Regulation Commission (PRC) has issued the Revised Guidelines on the 
issuance of Special Temporary Permit (STP) or PRC Memorandum No. 3, series of 2016 
to streamline the processing of applications that allow foreign professionals to practi ce WT/TPR/M/3 68/Add.1  
 
- 141 - 
 
  in the Philippines for specific purposes and definite period of time. The said 
Memorandum provides for the designation of a Focal Person among the members of a 
Professional Regulatory Board (PRB) to act on applications of STP. Compared with the 
previous  policy (PRC Resolution No. 668, series of 2012), a PRB needed to convene a 
majority before they can act on an application and issue a Resolution for the said 
purpose prior issuance of STP. The policy shift reduced the period of processing and 
issuance of permit from a period of a month to more or less ten (10) days.  
  
The practice of Pharmacy (RA 10918) and Forestry profession (RA 10690) now allows 
foreign individuals in the Philippines. The provision on reciprocity has been incorporated 
in the said laws. The same provision on reciprocity is being considered in the proposed 
bills in Congress for the practice of radiologic and x -ray technology as well as the 
practice of criminology.  
  
The difficulty of accessing the Philippine market by professionals may be attributable to 
the requirements of respective professional boards. However, the processes involved 
has been clarified and simplified by several policy issuances by the Professional 
Regulation Commission (i.e. PRC Memorandum Order No. 3 and 4, series of 
2016).  Again, the Commission has taken a liberal approach in the application of the 
principle of reciprocity.  
 
Page 39, Table 2  Goods subject to import permits or licensing  
 
Commodity  Government agency issuing 
permit/clearance  
Recyclable materials containing hazardous substances, 
cyanide and its compounds, asbestos, mercury and its 
compounds, ozone depleting substances, methyl 
bromide, certain chemicals under the Philippine Revised 
Priority Chemical List, new transformers, used 
computers and parts thereof, new chemicals  Department of Environment and 
Natural Resources (DENR) / 
Environmental Management Bureau 
(EMB)  
3. What measures have been taken by the Philippines to prohibit imports for the purpose of 
environmental protection? Have the implementation effects of these measures been evaluated? If 
so, please provide relevant evaluation reports.  
 
Response : 
 
Section 24 of Department Administrative Order (DAO) 1992 -29, Implementing Rules and 
Regulations of RA 6969 (Hazardous Wastes Act), prohibits the entry even in transit of 
hazardous wastes and their disposal into the Philippines.  
 
However, DAO 1994 -28 (Interim Guidelines on the Importation of Recyclable Materials 
Containing Hazardous Substances) and amendments to its annexes, allo ws the 
importation of recyclable materials containing hazardous substances intended for 
recycling, recovery or reprocessing subject to the requirements of EMB -DENR. DAO 
1994 -28 allows the importation of the following recyclable materials, namely, scrap 
metals (lead -acid batteries &amp; metal bearing sludge); solid plastic materials; 
electronic assemblies and scraps; used oil; and fly ash subject to certain limiting 
conditions. DAO 1994 -28 was incorporated in the latest procedural manual on hazardous 
wastes issued as DAO2013 -22 or the Revised Procedures and Standards for the 
Management of Hazardous Wastes.  
 
There has been no large -scale evaluation of the effects of these import prohibitions. 
However, Regional Offices of the Environmental Management Bureau (EM B) regularly 
conduct monitoring on the implementation of these import prohibitions. For Ozone 
Depleting Substances, an assessment of all rules and regulations issued under the 
Montreal Protocol is tentatively set to be carried out from 2018 to 2019. This 
assessment will be conducted under the Institutional Strengthening Project 11 of the 
Philippine Ozone Desk of the Department of Environment and Natural Resources.  
 WT/TPR/M/3 68/Add.1  
 
- 142 - 
 
  Page 50, Para 3.82  
 
“Since the previous TPR in 2012, the Philippines has made visible achieve ments in developing its 
legal framework and institutions for competition policy. The landmarks include the introduction of 
its first competition act in 2015 and the establishment of a competition authority, namely the 
Philippine Competition Commission (PCC ), in 2016. Despite these efforts, the overall competition 
environment is still considered weak due to restrictive regulations on trade and investment, 
barriers to entrepreneurship and state control.”  
 
4. Please provide the latest developments in the legis lation and enforcement of competition laws in 
the Philippines after the introduction of the Competition act in 2015 and the establishment of a 
competition authority in 2016.  
 
Response : 
 
With the enactment of Republic Act No. 10667, otherwise known as the P hilippine 
Competition Act (“PCA”), in 2015, and the subsequent constitution of the Philippine 
Competition Commission (“PCC”) the year after, the Philippines has made great strides 
in the enforcement of competition law. Following the PCA’s enactment, releva nt rules 
and regulations pertaining to the implementation of the Act have been issued. These 
include the 2016 Implementing Rules and Regulations of the PCA, the 2017 Rules of 
Procedure of the PCC, the PCC Merger Review Guidelines, and the PCC Rules on Merg er 
Procedure. A more recent development is the issuance of a memorandum circular which 
effectively increases the threshold values for mandatory merger review. From PhP 1 
billion, as provided for in the PCA, the amount is now reckoned at PhP 5 billion for t he 
Size of Party and PhP 2 billion for Size of Transaction, beginning March 20, 2018. As of 
April 2, 2018, the PCC has received a total of 158 notifications, with a total transaction 
value of almost PhP 2 trillion.  
 
With the end of the PCA’s two -year trans itory period on August 8, 2017, the 
investigation of potentially anti -competitive conduct and abuses of dominant position is 
now in full swing. Currently, the PCC’s Enforcement Office has been conducting several 
preliminary inquiries on matters brought bef ore it, spanning across different industries 
with far -reaching consumer implications. Moreover, the PCC’s Economics Office is 
conducting market studies and issues papers on 10 different industries that might have 
potential competition issues. The outcome o f these studies can help PCC in crafting 
recommendations as to how best address the perceived market inefficiencies in these 
sectors. Finally, the PCC is stepping up its advocacy efforts to increase awareness of the 
agency and its mandate, and so as to ens ure that more Filipinos realize the benefits of 
having a comprehensive competition law.  
 
Page 51, Para 3.92  
 
“Competition provisions are included in several of the Philippines' regional trade agreements, such 
as the ASEAN -Australia New Zealand Free Trade A greement, the ASEAN -Japan Comprehensive 
Economic Partnership Agreement, and the Philippines -Japan Economic Partnership Agreement.”  
 
5. Please brief the main contents relevant to anti -monopoly law enforcement cooperation of the 
FTAs signed by the Philippine s. 
 
Response : 
 
The Philippines’ free trade Agreements with Japan (PJEPA) the European Free Trade 
Association (EFTA) and the ASEAN -Australia -New Zealand Free Trade Agreement 
(AANZFTA) contain provisions on Competition cooperation.  
 
Under the PH -EFTA FTA, provisions include cooperation and consultation in dealing with 
anti-competitive practices with the view to end such practices or its adverse effects on 
trade. The Agreement recognizes that these anti -competitive practices (i.e., agr eements 
and practices that aim to or have the effect of prevention, restriction or lessening of 
competition, and abuse of dominant position) also apply to state owned enterprises, in 
so far as the application of this does not obstruct the performance of th e particular WT/TPR/M/3 68/Add.1  
 
- 143 - 
 
  public tasks assigned to them under domestic laws, rules, and regulations. Cooperation 
may include exchange of information, except those that are confidential under its 
domestic laws, rules, and regulations.  
 
Under the PJEPA, implementing aut horities of both Parties will work together in 
technical cooperation activities (e.g., exchange of personnel for training purposes, 
participation in training courses, assistance in advocacy and educational campaigns) 
related to competition law enforcement and competition policy. The Agreement also 
includes transparency provisions on (a) prompt notification about amendment of 
existing or adoption of new Competition laws and regulations and (b) provision to the 
other Party of copies of relevant reports or pub lications of its implementing authorities.  
 
Under the ASEAN -Australia -New Zealand Free Trade Agreement, Chapter 14 on 
Competition recognizes the importance of cooperation in the promotion of competition, 
economic efficiency, consumer welfare, and the curta ilment of anti -competitive 
practices. To this end, the State Parties may engage in various cooperation agreements, 
such as the exchange of experience regarding the promotion and enforcement of 
competition law and policy, exchange of publicly available info rmation, staff exchange, 
capacity building activities, advocacy programs, and any other form of technical 
cooperation. In addition, the Annex on Telecommunications underscores the importance 
of competition by mandating Parties to prevent the occurrence of anti-competitive 
practices in their respective territories.  
 
Page 59, Para 4.1  
 
“Agricultural production is dominated by small family farms (averaging 1.3 ha in 2012). The 
average farm size is smaller than three decades ago, primarily owing to a land refor m launched in 
the late 1980s (Comprehensive Agrarian Reform Programme, CARP). Legislation was passed 
during the review period with the aim, amongst others, of encouraging larger and more productive 
farm structures (Section 4.1.6).”  
Note 2: Sugarcane Indust ry Development Act, 2015; and Agricultural and Fisheries Mechanization 
Act, 2013 (aimed at farm sizes of at least 50 ha).  
 
6. What is the specific number of small family farms in the Philippines and what is their proportion 
in all family farms?  
Response : 
 
Based on the latest Philippine Statistics Authority (PSA) agriculture census (2012), 
there are 11,025,921 small family farms registered or 98% of the total number of family 
farms. These farms have sizes of less than seven (7) hectares.  
 
7. Please introduce  the land reform plan launched in the late 1980s, including goals, contents, and 
effects.  
 
Response : 
 
Noting that this is not covered in detail in the period under review, details can be 
obtained from the following link:  
http://www.dar.gov.ph/ra -6657 -what -is-carp-comprehensive -agrarian -reform -
program . 
 
8. According to Note 2, the Philippines adopted the Sugarcane Industry Development Act of 2015 
and the Agricult ural and Fisheries Mechanization Act of 2013 (aimed at farm sizes of at least 50 
ha) during the period of review. Please brief us on the two acts. What are the specific measures to 
establish farm sizes of at least 50 ha? Has the Philippines taken land leas ing or other forms of land 
transfer measures?  
 
Response : 
 
The Sugarcane Industry Development Act is a direct policy response to recent 
developments in the sugarcane industry that has been adversely affected by the WT/TPR/M/3 68/Add.1  
 
- 144 - 
 
  comprehensive agrarian reform law. A vast majority of sugarcane farmers are agrarian 
reform beneficiaries with average farm sizes of two (2) hectares; the comprehensive 
agrarian reform transformed the plantation mode of sugarcane production to one that is 
dominated by small sugarcane farmers. SIDA  does not cover land leasing or other forms 
of land transfer.  
 
Page 62, Para 4.12  
 
“The PCIC covers losses arising from natural disasters…The subsidy has increased significantly in 
recent years.”  
 
9. In addition to losses arising from natural disasters, does the PCIC also cover other crop risks 
such as price fluctuations?  
 
Response : 
 
The PCIC has no insurance product yet that covers price fluctuations.  
 
10. What is the reason for the significant increase of subsidy provided by the Government?  
 
Response : 
 
PCIC supports the Agricultural Development, Food Sufficiency and Poverty Alleviation 
Programs of the Department of Agriculture and Department of Agrarian Reform. The 
increase is for farmers and fisherfolk who are annually affected by the destructive 
effect s of climate change and other perils, on account of the high number of typhoons 
and calamities that pass the Philippines and nearby region.  
 
Page 62, Para 4.13  
 
“The PLEA/PUNLA is a new special credit programme to address the financial needs of marginal 
and small farmers and fisherfolk, offering non -collateralized loans at a 6% annual interest rate in 
areas underserved by banks, according to the authorities.”  
 
11. Please brief the actual implementation and the effects of this programme.  
 
Response : 
 
The pro gram was launched in 15 poorest provinces of the Philippines. Non -collateralized 
loans for agri -fishery production and agri -microfinance will be provided under the 
PUNLA through cooperatives and non -government organizations (NGOs) as credit 
delivery channe ls (lending conduits) of credit funds in extending loans to marginal 
farmers and fisherfolk.  
 
Page 62, Para 4.15  
 
“According to the authorities, the House of Representatives is currently [October 2017] reviewing 
a consolidated bill that would allow for tariffication of the QR on rice, and the Philippine executive 
branch is working closely with both Houses of Congress in the finalization of the bill, as the 
President ordered the passage of the rice tariffication law to be expedited.”  
 
12. What is the late st progress made in the review of this bill? When is it expected to be passed?  
 
Response : 
 
At the Lower House of Congress, the bill is under deliberation by the Committee on 
Appropriations before being submitted to the Plenary for approval. At the Upper House 
of Congress, a version of the bill is being deliberated by the Senate Committee on 
Agriculture and Food. Both Houses will transmit the bill to the Bicameral Conference 
Committee for a final bill to be approved.  
 WT/TPR/M/3 68/Add.1  
 
- 145 - 
 
  The approved version of the bill will then be transmitted to the Office of the President 
for approval. Note that both the Legislative and Executive branches of Government have 
given priority to this proposed legislation.  
 
13. Will the Government adjust rice -related domestic policies after real izing tariffication of the QR 
on rice?  
 
Response : 
 
Yes. The policy will be geared towards the development of the rice industry.  
 
Page 69, Para 4.56  
 
“In order to encourage development of renewable energy, a Feed -In Tariff (FIT) system was 
introduced, and b ecame operational in August 2010.”  
 
14. Is FIT applicable to the electricity price subsidy for garbage incineration power generation 
projects, and what is the specific amount? For renewable energy power generation projects, is it 
applicable to renewable en ergy power generation policies based on the scale of power generation 
(the scale of installed capacity), or is it granted based on the actual power generation?  
 
Response : 
 
Power generation from garbage incineration is eligible for Feed -in Tariff (FIT) subs idy.   
 
Section 7 of the Renewable Energy Act (RA 9513) mandates a feed -in tariff system for 
electricity produced from wind, solar, ocean, run -of-river hydropower, and biomass.  
Biomass resources is defined in Section 4(b) of the Renewable Energy Act.  
 
There is only one FIT rate for biomass which is paid based on actual power generation.  
For Round 1, the biomass FIT rate was set at PhP6.63/kWh.  It was degressed to 
PhP6.5968/kWh for the period January 2017 to December 2017.  For 2018, the FIT rate 
for b iomass (for the extension of the unfilled Installation Target set by the Department 
of Energy) is undergoing review by the Energy Regulatory Commission.  
 
Page70, Para 4.59  
 
(Note: Response to follow)  
 
“The Government also provides a number of tax incentiv es for renewable energy producers.”  
 
15. Please explain the contents of “a number of tax incentives”. What is the specific scope of 
renewable energy producers? Does this tax preference apply to all the foreign energy producers in 
the Philippines? Are there  any differential policies?  
 
16. Does the Philippines plan to cancel or correspondingly reduce the tariffs on equipment 
imported for construction in the energy industry?  
 
Part III. Other Questions  
 
In the Schedule of Specific Commitments o n Services of the Philippines’ accession to the WTO, it is 
mentioned that the legal persons engaged in securities brokerage must be members of the Stock 
Exchange, and the maximum number of the members of the Stock Exchange is 200.  
 
17. At present, how many  members does the Philippine Stock Exchange have?  
 
Response : 
 
The PSE has 143 Trading Participants.  
 
Which financial institutions can apply to become members of the Stock Exchange?  
 WT/TPR/M/3 68/Add.1  
 
- 146 - 
 
  Response : 
 
Article III, Section 8 of the Rules Governing Trading Rights and Trading Participants sets 
out the following general qualifications of trading participants:  
 
a) Must be a duly -registered domestic corporation authorized to transact business 
as a broker or dealer in securities;  
b) Must be composed of stockholders not exceed ing such number as may be 
prescribed by law or regulations and who are all acceptable to the PSE Board; 
and 
c) Must have and minimum a minimum subscribed capital stock in such amount as 
may be required by law or regulations; Provided, that the Trading Partici pants 
shall have a minimum unimpaired paid -up capital, as defined by the Securities 
and Exchange Commission, of Twenty Million Pesos effective December 31, 2009; 
Provided further, that effective December 31, 2010 and onwards, the minimum 
unimpaired paid -up capital shall be Thirty Million Pesos.  Further to this 
requirement, Section 28.1.2.5.2(b).1 of the 2015 SRC IRR which requires an 
unimpaired paid -up capital of One Hundred Million Pesos for (1) first -time 
registrants who will be participating in a regist ered clearing agency and (2) 
those acquiring the business of existing broker dealer companies and will be 
participating in a registered clearing agency.  
  
In addition, Article III, Section 9 of the Rules Governing Trading Rights and Trading 
Participants re quires the applicant to submit a certified true copy of the license from the 
SEC to operate as broker and dealer.  
 
What are the proportions of banks and non -banking financial institutions among the current 
members of the Stock Exchange?  
 
Response : 
 
Only non-bank financial institutions/brokers are members/trading participants in the 
stock exchange.   
 
However, 12 of the current members of the stock exchange are related to banks.  
 
If the number of Stock Exchange members reaches 200, will new financial inst itutions not be 
allowed to engage in securities brokerage, or will new trade policies be adopted to optimize the 
situation?  
 
Response : 
 
Under PSE’s By -Laws, and Article III, Section 1 of the Rules Governing Trading Rights 
and Trading Participants, there sh all be no more than one hundred eighty four (184) 
trading participants on the PSE.  
 
However, new financial institutions may be allowed to engage in securities brokerage 
even if the membership in the stock exchange reaches 200. The PSE may propose to 
amend its By -Laws and Rules Governing Trading Rights and Trading Participants to 
allow for more number of trading participants than what is currently allowed, subject to 
approval by the SEC.  Approval thereof may be granted provided the proposal will be 
consiste nt with the public interest and the protection of investors.  
 
In the Schedule of Specific Commitments on Services of the Philippines, it is mentioned that when 
an issuer whose principal business is investment, reinvestment or securities trading is engaged in 
trading business, it shall establish a commercial presence in the Philippines with the proportion of 
foreign investment being not more than 40% and all the board members must be Filipino.  
 
(Note: Response to follow)  
 
18. Which financial institutions may  be engaged in the above business? Which type of issuers are 
mentioned in the above business?  WT/TPR/M/3 68/Add.1  
 
- 147 - 
 
   
In Section 1 “Definitions” of Republic Act No. 8179 (Implementing Rules and Regulations of RA 
7042*(1) As Amended by Republic Act No.8179), the provisions on Sec tion Q of the Foreign 
Investment Negative List (FINL) and List A in Executive Order No. 184 Promulgating the Tenth 
Regular Foreign Investment Negative List are: “the term ‘Foreign Investments Negative List’ shall 
mean a list of areas of economic activity w hose foreign ownership is limited to a maximum of forty 
percent (40%) of the equity capital of the enterprises engaged therein.” Section 17 on 
“exploitation, development and utilization of natural resources”; Section 18 on “private land 
ownership”; and Sec tion 19 on “operation of public facilities”.  
 
19. According to the above legal provisions, for FDI in power and infrastructure projects in the 
Philippines, the proportion of shareholding by foreign investment shall not exceed 40%. Does the 
Government plan to further liberalize the shareholding proportion of foreign -invested enterprises in 
the power industry?  
 
Response :  
 
The Philippine government issued Memorandum Order (MO) No. 16, dated November 21, 
2017, which directs the NEDA Board and its member agenci es to take immediate steps 
to lift or ease existing restrictions on foreign participation in certain investment areas 
and activities. Public services, except activities and systems that are recognized as 
public utilities such as transmission and distributi on of electricity, water pipeline 
distribution system, and sewerage pipeline system, are among the identified investment 
areas/activities under said memorandum order.  
 
It is noted that power generation and the supply of electricity to the contestable marke t 
are not considered as public utility operation (Section 6 and Section 29, respectively, of 
RA 9136 or the Electric Power Industry Reform Act of 2001). Any person or entity 
engaged or which shall engage in power generation and supply of electricity shall not be 
required to secure a national franchise (Section 6 and Section 29 of RA 9136).  
 
20. Does the Government plan to further liberalize the shareholding proportion of foreign -invested 
enterprises in construction and engineering sectors?  
 
Response : 
 
The P hilippine government issued Memorandum Order (MO) No. 16, dated November 21, 
2017, which directs the NEDA Board and its member agencies to take immediate steps 
to lift or ease existing restrictions on foreign participation in certain investment areas 
and a ctivities. Contracts for the construction and repair of locally -funded public works 
are among the identified investment areas/activities under said memorandum order.  
EUROPEAN UNION , FOLLOW -UP QUESTIONS  
EU question  No 4: 
 
According to the report, the Nation al Competitiveness Council has worked on further improving 
business processes through various initiatives. One initiative is the Expanded Anti -Red Tape Act of 
2017 (HB 6579; SB 1311) allowing faster and fewer licensing.  
 
Could the Philippines give an update on the status of this law in Congress and its impact on Ease 
of Doing Business?  
 
Response : 
 
To date, the bill has been approved by both Houses of Congress and is now awaiting the 
President ’s approval and signature. The law is expected to improve the  Philippines ’ 
competitiveness rankings in the World Bank ’s Doing Business report and provide for the 
efficient and effective delivery of public services.  
 WT/TPR/M/3 68/Add.1  
 
- 148 - 
 
  EU question No 5  
 
Double taxation agreements are international treaties and so, are of direct applica tion and prevail 
over local laws. In the Philippines the favorable conditions of the agreements (for example, 
reduced withholding rates) do not apply automatically, but have to be previously requested and 
authorized by the local tax agency (BIR), following  an extremely cumbersome procedure.  
 
Is the Philippines planning to foster the automatic application of these Agreements?  
 
Response : 
 
Under Revenue Memorandum Order (RMO) 8 -2017, non -residents can already utilize the 
reduced withholding rates on dividends, interest and royalties provided they submit a 
duly accomplished Certificate of Residence for Tax Treaty (CORTT) Form to the 
withholding agent prior to the remittance of the income.   The CORTT Form and/or the 
usual certificate of residence issued  by the tax authority of the income recipient is 
sufficient for the automatic and immediate withholding of the reduced rates on those 
incomes subject to post -compliance check by the International Tax Affairs Division.   The 
RMO is uploaded in the BIR websit e.  After remitting the income net of the reduced tax, 
the nonresident (or its authorized representative) shall submit the CORTT Form to ITAD 
for recording and future compliance check.  
 
For other types of treaty income such as business profits or capital g ains, the BIR issues 
rulings or certificates for this purpose.  
 
EU question No 8 :  
 
Customs Memorandum 2017_10 -001 suspended the super green lane (SGL Customs 
Administrative Order 6 -2003) (also referred to as Blue Lane in the report).  
 
When will the Green  Lane be re -instated as this will benefit especially SMEs?  
 
Response : 
 
There is a possibility that the Green Lane may not be reinstated. In lieu of it, the 
importers may apply for the Super Green Lane.  
 
EU question No 13 :  
 
The WTO bound tariff for sparkling wine (HS 220410) is set by the Philippines at 50%, being the 
current applied MFN average duty only 5%. However, the abnormally high specific excise levied on 
this product may be working as a “de facto” tariff and/or trade barrier, given that the Philippines 
has no domestic production of this product.  
 
The excise structure of sparkling wine is as follows [per 750ml bottle, Net Retail Price (excluding 
excise and VAT]:  
 
- PHP500 or less  → PHP 292.47/litre  
- More than PHP500     → PHP 818.90/litre  
 
For most prices ranges, except those in the upper end, the excise is well beyond the bound tariff 
for this product. Other reasons that may generally explain high specific duties on alcohol such as 
health concerns or public moral, should be discarded as the res t of the specific tax structure –e.g. 
still wine or liquor - is much lower.  
 
What is the reason to levy this product over 23 times more than still or carbonated 
wine?  
 
(Note: Response to follow)  
 WT/TPR/M/3 68/Add.1  
 
- 149 - 
 
  EU question No 17 :  
 
Reference is made to the certification s chemes.  
 
For what automotive parts does the PH accept UNECE regulations? Does the PH intend to 
expand the number of products covered under UNECE?  
 
Response:  
 
The Philippines accepts UNECE regulations for the following automotive parts:  
 
1. Helmets and their visors  
2. Safety belts (Seat belts)  
3. Safety glass for automotive  
4. Tires for automotive vehicles  
 
The Philippines intends to expand the number of products covered under the UNECE 
regulations in accordance with the ASEAN Mutual Recognition Arrangement (MRA) for 
Automotive Products which is still under discussion.  
 
EU question No 22 : 
 
According to the report, there continues to be a high risk of corruption in the government 
procurement system. Industry wanting to contribute to the Philippines infrastructure plans i s at 
times faced with issues of transparency and predictability. Provisions under Government 
Procurement Reform Act (2003) exclude or put foreign bidders at a disadvantage. President 
Duterte has expressed a number of times the ambition to reform the Philip pines procurement 
system to allow more foreign participation in the build build build agenda. (See also his Order 16 
of 2017).  
 
EU appreciates that the Competition Act repealed section 4 of Commonwealth Act No 
138.  
 
However, can the PH expand on how MO 1 6 of 17 November 2017 will impact on 
provisions of the Government Procurement Reform Act (RA 9184 of 2002) as this still 
includes eligibility criteria for a limit of 40% foreign participation in the procurement of 
goods, and with considerations on reciproc ity as provided by RA 5183. In the 
procurement of infrastructure, foreign contractors may participate up to 25% in joint -
ventures or 100% when techniques/technologies required to build structures are not 
adequately possessed by nationals. Consulting servic es is as a general rule, limited to 
40% foreign participation in capital (and reciprocity applies)?  
 
Response : 
 
The directive of the President through MO 16, s. of 2017, provides instruction to the 
executive branch, particularly the National Economic and Development Authority (NEDA) 
Board, to take immediate steps to lift or ease existing restrictions on foreign 
participation not needing legislative intervention.  For those requiring legislative action, 
particularly in the procurement of goods, infrastructu re projects and consulting services 
recognized under Republic Act No. 9184, otherwise known as the Government 
Procurement Reform Act, the NEDA Board is directed to earnestly support legislative 
efforts to address such restrictions.  Accordingly, these effo rts will include a review of 
existing legal frameworks affecting government procurement, e.g. Commonwealth Act 
No. 138 and Republic Act No. 5183, that involve provisions relating to preference and 
equity interests, and support to pending bills seeking to a mend these legislations, 
including the procurement law.  
 
Further, as point for clarification, in the procurement of infrastructure projects, joint 
ventures/consortia in which Filipino ownership or interest is less than seventy -five 
percent (75%) may be eli gible where the structures to be built require the application of 
techniques and/or technologies which are not adequately possessed by Filipinos and 
that Filipino ownership or interest shall not be less than twenty -five percent (25%).  WT/TPR/M/3 68/Add.1  
 
- 150 - 
 
   
EU question No 31 :  
 
According to the report, the Philippines agreed to tariffy the quantitative restrictions on rice upon 
the expiry of the waiver, on the basis of the Executive Order 23 (Extending the effectivity of the 
MFN rates of duties on certain agricultural products).  
 
How exactly can interested parties go about this, to avoid tariff rates going up of related products?  
 
Response : 
 
According to Section 1608 of the CMTA, the President, upon the recommendation of the 
National Economic and Development Authority (NEDA), in the interest of the general 
welfare and national security, can increase, reduce, or remove existing rates of import 
duty including any necessary change in classification.  
 
Prior to the submission of the recommendation to the President by the NEDA, the Tari ff 
Commission shall conduct an investigation and shall hold public hearings wherein 
interested parties shall be afforded reasonable opportunity to be present, to produce 
evidence and to be heard. The Tariff Commission shall also hear the views and 
recommen dations of any government office, agency, or instrumentality, and submit its 
findings and recommendations to the NEDA within thirty (30) days after the termination 
of the public hearings.  
 
Given this, any interested parties will have the opportunity to sub mit their views, 
comments, opposition, and even evidence to support their position before any 
recommendation for tariff modification is submitted to the President.  
 
Notably, the power delegated to the President under the said law shall be exercised only 
when Congress is not in session and said delegated power may be withdrawn or 
terminated by Congress through a joint resolution.  
 
EU question No 32 : 
 
The report mentions that Feed -in-tariff incentives for hydropower and biomass are due to expire in 
December 2017 but are under review.  
 
Response : 
 
This has expired and has not been renewed.  
 
EU question No 21 :  
 
According to the report, two -year transito ry period of the Philippine Competition Commission 
(PCC) ended on 8 August 2017. The PCC has initiated a number of studies and statements, 
including on the issue of providing licenses to foreign constructing companies by Philippine 
Construction Accreditation Board  (PCAB) which the PCC argued should be done notwithstanding 
the status of those companies in terms of capitalisation.  
 
Foreign construction companies can acquire a construction license called “Quadruple A Platinum” 
from PCAB by which th ey could have 100% foreign capital under an investment of about 20 million 
euros (1 billion Php). “Quadruple A Gold” contractors may undertake private projects under the 
following contract cost:  
 
a) For vertical projects - minimum contract cost of 100 million  Euros (5 Billion Php);    
b) For horizontal projects - minimum contract cost of 60 million Euros (3 Billion Php)  
 
Filipino construction companies can acquire “Quadruple A Gold” also under an investment of about 
20 million euros (1 billion Php) but “Quadruple A Platinum” contractors may undertake government 
and private projects(a)(b)  of any contract cost.  
 
 WT/TPR/M/3 68/Add.1  
 
- 151 - 
 
  By when do you expect these amendments to be effective and have foreign construction 
companies at an equal footing as domestic ones?  
 
Response : 
 
It cannot be ascertained as this will be the result of a comprehensive review of and 
consultations on existing laws and regulations.  
MALAYSIA , FOLLOW -UP QUESTIONS  
Para 4.12, p. 61 -62 
 
Crop insurance  
 
The Philippine Crop Insurance Corporation (PCIC) under the Departm ent of Agriculture is 
implementing insurance programmes for: (i) rice and corn; (ii) high -value crops; (iii) livestock; 
(iv) fisheries; (v) non -crop agricultural assets; and (vi) credit and life.17 The PCIC covers losses 
arising from natural disasters. The  government expenditures were accordingly notified as Green 
Box "payments for relief from natural disasters”. Government Premium Subsidy (GPS) is provided 
in the form of matching grants to cover the premium cost of the insurance for subsistence farmers. 
The subsidy has increased significantly in recent years.  
 
1. Whether the crop insurance programme is ceded to / supported by the private sector 
through a reinsurance arrangement?  
 
Response : 
 
Yes, PCIC cedes a portion of its risks on Non -Crop Agri -Assets Insurance Program to the 
National Reinsurance Corporation of the Philippines (PhilNARE). PCIC also avails of 
reinsurance protection for other agricultural insurance programs, whenever available.  
 
2. Method or basis to determine the amount of annual subsidy  to be provided under the crop 
insurance programme?  
 
Response : 
 
Yearly, PCIC submits the Annual Budget to the Department of Budget and Management 
(DBM) with the details of the target number of farmers and fisherfolk to be covered with 
insurance.  
 
Para 4.52, p. 69  
 
Renewable energy (geothermal, hydro, wind, biomass, and solar) makes up the rest of the 
installed capacity of the country (accounting for about 34.3%). The DOE issued the National 
Renewable Energy Programme (NREP), with the aim of diversifying  and expanding renewable 
energy. Under the NREP, the Philippines aims to double the 2010 installed capacity of renewable 
energy sources by 2030, which implies an increase from 5,438 MW in 2010 to 15,304 MW in 2030.  
 
(Note: Response to follow)  
 
3. Can the Philippines share on the government's policy towards long -term financing for green 
projects, for instance, through the issuance of sukuk?  
 
Para 4.76, p. 73  
 
There are three government -owned banking institutions in the Philippines: the Development Bank 
of the Philippines (DBP), the Land Bank of the Philippines (LBP), and Al Amanah Islamic 
Investment Bank of the Philippines (AAIIBP). Together, these account for 14.2% of the total assets 
of the banking sector. The DBP and the LBP provide commercial banking ser vices as well as 
development financing. The AAIIBP is the only bank in the Philippines authorized to offer Islamic 
banking. It is also licensed to perform both commercial and investment banking services.  
 WT/TPR/M/3 68/Add.1  
 
- 152 - 
 
  4. Given that past initiatives by the Philippine government to pass a law on Islamic finance (i.e. 
The Philippine Islamic Financing Act) have not yet come to fruition, what would be the immediate 
priority for the government to progress in this area?  
 
Response :  
 
The BSP is collaborating with Congress for  a suitable legal framework for Islamic 
banking in the Philippines. Meantime,  we are looking at an "open approach" whereby 
conventional banks can operate Islamic banking windows under principles that 
recognize the unique characteristics of Islamic banking , a level playing field for 
conventional and Islamic banks and the opportunities of providing innovative products 
and services for Muslim brothers.   
 
GOVERNMENT REPORT  
 
Banking Services  
 
Para 2.27, p. 9  
 
To promote foreign participation in the banking and financial sectors, Republic Act 10641 (An Act 
Allowing the Full Entry of Foreign banks in the Philippines) was signed into law in July 2014,...The 
Law further opened up the banking sector to more offshore  players. Since its establishment, the 
Philippines has approved the entry of foreign banks from Japan, the Republic of Korea, Chinese 
Taipei, and Singapore.  
 
We commend that the Philippines has undertaken various liberalisation initiatives during the peri od 
under review.  
 
5. In line with the Philippines liberalisation efforts, are there plans to relax the requirements on 
Filipino understudies for every non -Filipino employed in the financial sector?  
 
Response :  
 
The understudy requirement is within the purv iew of the Department of Labor and 
Employment of the Philippines.  The said requirement is not discriminatory as it applies 
to both domestically -owned banks and foreign banks.  By virtue of the National 
Treatment commitment, the said requirement, if libera lized, will equally apply to 
domestically -owned banks and foreign banks.  
 
 
__________