WT/TPR/M/368/Add. 2 
26 June 2018 
(18-3996) Page: 1/5 
Trade Policy Review Body  
26 and 28 March 2018  Original: English/anglais/inglés  
 
 
  
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. 2 
 
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  EUROPEAN UNION  ................................ ................................ ................................ ...........  3 
MALAYSIA  ................................ ................................ ................................ ........................  3 
CHINA  ................................ ................................ ................................ ..............................  4 WT/TPR/M/3 68/Add.2  
 
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  EUROPEAN UNION  
 
SECRETARIAT REPORT (WT/TPR/S/368)  
3 Trade Policies and Practices by Measure  
3.1 Measures Directly Affecting Imports  
3.1.4 Other charges affecting imports  
 
Para 3.29 (Page 37)  
 
Excise taxes are levied on alcoholic beverages, tobacco products, automobiles, petroleum 
products, minerals, and goods defined as "non -essential", which essentially incl udes perfumes and 
jewellery (Table 3.5). Both specific and ad valorem taxes are applied; in addition, tobacco products 
are subject to an inspection fee. Since 2013, imported and domestically produced alcoholic 
beverages are subject to the same tax rates  
 
Table 3.5 (Page 37) – Excise tax rates, 2017  
 
What is the reason to levy this product over 23 times more than still or carbonated wine?  
 
Response:  
 
The Philippines is presently reviewing the excise taxation on alcohol products.  
 
 
MALAYSIA  
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 expandin g 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.  
 
Can the Philippines share on the government's policy towards long -term financing for green 
projects, for instance, through the issuance of sukuk?  
 
Response:  
 
Under Republic Act (RA) No. 9513, otherwise known as the Renewable Energy Act of 
2008, government financial institutions are directed to provide financial packages for 
duly recommended and endorsed renewable energy projects, in accordance with and to 
the extent allowed by domestic laws, rules and regulations. It may be noted that the 
Landbank of the Ph ilippines has a Renewable Energy Lending Program that provides 
financing to renewable energy/energy efficient projects.  
 
The Philippines also has a Sustainable Energy Finance (SEF) Program being 
implemented by the International Finance Corporation (IFC). T he SEF works with private 
banks (BPI, BDO and BanKO) to encourage lending to energy efficiency and renewable 
energy projects by supporting them through technical advisory services and risk sharing 
facility.  
 
Moreover, the Philippine government supports the  policy towards long -term financing 
for green projects wherein local commercial banks serve as conduit in providing loans 
and grants to qualified investors or developers. An example is the Development Bank of 
the Philippines which has lending programs for green and clean projects.   
 
The Asian Development Bank established Renewable Energy Development Investment 
Fund and Financing Utilities for Sustainable Energy Development (FUSED).  The Land 
Bank of the Philippines has similar financing mechanism which pro vide assistance to 
small and big RE developers through loans.  WT/TPR/M/3 68/Add. 2 
 
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  Potential co -financiers like USAID, JICA, AusAID, GTZ, among others provide technical 
assistance such as conduct of feasibility studies and purchase of necessary equipment 
both software and hard ware.  
 
ER-1-94 exemplifies government assistance to communit y hosting energy projects 
(e.g.  P0.01 per KWh produced: 50 percent goes to electrification fund and 25 percent 
goes to livelihood and development fund and the remaining 25 percent is allotted to 
reforestation, watershed management and, health and environment enhancement fund.  
 
 
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 Ent ry 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.  
 
Question(s):  
 
We commend that the Philippines has undertaken various liberalisation initiatives during the period 
under review.  
 
In line with the Philippines liberalisation efforts, are there plans to relax the requi rements on 
Filipino understudies for every non -Filipino employed in the financial sector?  
 
Response:  
 
As per Amended Insurance Code, IC has no requirement on Filipino understudies for 
every non -Filipino employed.  
 
We refer you to Department of Labor  and Employment’s (DOLE) Department Order (DO) 
No. 186 Series of 2017, Revised Rules for the Insurance of Employment Permits to 
Foreign National.  
 
CHINA  
 
Page 70, Para 4.59  
 
 “The Government also provides a number of tax incentives for renewable energy pr oducers.”  
 
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?  
 
Response:  
 
Tax incentives include Income Tax Holiday (ITH) for 7 years and reduced income tax 
rate of 10% thereafter. Duty free importation of machineries and equipment for the 
project and VAT -zero rating available within 10 years from issuance of Certific ate of 
Registration to Renewable Energy (RE) Developer, Tax Credit on domestic capital 
equipment, exemption from universal charge for RE project in off grid area. For projects 
intended for commercial purpose, registration happens only after securing RE Ser vice 
Contract.  
 WT/TPR/M/3 68/Add.2  
 
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  As notified by the Philippines, the incentives being referred to are in the form of tax 
concessions, which may be availed of by qualified renewable energy producers, whether 
foreign or domestic -owned enterprise.  
 
The Philippines has recent ly completed the comprehensive tariff review with the 
issuance of Executive Order No. 20, s. 2017. In the said EO, the MFN rates for the 
equipment being referred to were maintained.  
 
Does the Philippines plan to cancel or correspondingly reduce the tariff s on equipment imported for 
construction in the energy industry?  
 
Response:  
 
The Department of Energy is not in the position to respond on the plan of government 
whether to amend incentives for RE Development. The Legislative branch of the 
government has the authority to intervene on any existing law such as the RE Law by 
amending the law.  
 
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 secu rities 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.  
 
Which financial institutions may be en gaged in the above business? Which type of issuers are 
mentioned in the above business?  
 
Response:  
 
Insurance companies are not covered under the business who shall establish a 
commercial presence in the Philippines with the proportion of foreign investmen t being 
not more than 40% and all board members must be Filipino.  
 
This is so as Section 290 of the Amended Insurance Code does not distinguish whether 
the person who could exercise direct or indirect control (i.e., control is presumed to 
exist if any pers on directly or indirectly owns, controls or holds with the power to vote 
40% or more of the voting securities) over an authorized insurance company is 
domestic or foreign.  
 
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