WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO  
WT/TPR/M/261/Add.2 
2 May 2012 
 (12-2326) 
Trade Policy Review Body 
20 and 22 March 2012 Original:   English/ 
 anglais/  inglés 
 
TRADE POLICY REVIEW 
PHILIPPINES 
Record of the Meeting 
Addendum 
Chairperson:   H.E. Mr. Eduardo Muñoz Gómez (Colombia) 
 
 This document contains the advance wr itten questions, and replies provided by 
the Philippines.1 
__________________________________________________________________________________ 
Organe d'examen des politiques commerciales 
20 et 22 mars 2012 
 
EXAMEN DES POLITIQUES COMMERCIALES 
PHILIPPINES 
Compte-rendu de la réunion 
Addendum 
Président:   S.E. M. Eduardo Muñoz Gómez (Colombie) 
 
 Le présent document contient les questions écrites communiquées à l'avance et les réponses 
fournies par les Philippines.1 
__________________________________________________________________________________ 
Órgano de Examen de la s Políticas Comerciales 
20 y 22 de marzo de 2012 
 
EXAMEN DE LAS POLÍTICAS COMERCIALES 
FILIPINAS  
Acta de la reunión 
Addendum 
Presidente:   Excmo. Sr. E duardo Muñoz Gómez (Colombia) 
  En el presente documento figuran las pre guntas presentadas anticipadamente por escrito, 
junto con las respuestas facilitadas por las Filipinas.
1 
                                                      
1 In English only./En anglais seulement./En inglés solamente. WT/TPR/M/261/Add.2 
Page 2  
 
  REPLIES PROVIDED BY THE PHILIPPINES 
 
EUROPEAN UNION 
 
Government Report (WT/TPR/G/261) 
 I. DEVELOPMENTS IN THE ECONOMY (2) S
ECTORAL GROWTH  
Report by the Government 
Pages 5- 6, para-s 5-6 and Table 2  
According to the Government's report, the agricultu re sector had a zero growth in 2009 and a negative 
growth in 2010.  
Question 1 
Apart from rice production, which was negatively aff ected by 2 storms in 2009, could the Philippines 
elaborate on which are the declining agriculture sub-sect ors and the reasons for this decline?  Is this 
negative trend expected to last? 
Answer 
The negative trend in the crops sector 2009  and 2010 was a result of weather disturbances 
(destructive storms in 2009 such as Emong, Pepeng,  and Ondoy) and prolonged dry spell in 2010) as 
well as high cost of inputs such as fertilizers.  Am ong the affected subsecto rs aside from rice were 
corn, sugar, pineapple and abaca.  The crops sect or however recovered in 2011 as better weather 
resulted in increased outputs in most subsectors.  
III. TRADE POLICY DEVELOPMENTS 
(2) T HE DDA  NEGOTIATIONS  
Implementation Issues 
 
Report by the Government 
 
Page 15, para. 62  
 
The Government's report mentions negotiations  in the WTO on the multilateral register of 
geographical indications (GI).  
 
Question 2 
The Philippines is the last ASEAN country with a long agricultural tradition, which does not have a 
specific system of protection for its GIs.  Would the Philippines provide information on its intentions 
in this regard?  Do the Philippines consider developing a sui generis  system with appropriate level of 
protection in order to guarantee its producers a better financial return? 
Answer 
The Philippines is in the process of reviewing its regulations to include the registration of 
certification marks.  As part of the continuing effort s to improve its IP System, the Philippines is 
assessing the benefits of a sui generis system for the pr otection of GIs.  To this end, the Philippines is 
in the process of conducting a nationwide audit of  products that may qualify for protection under a 
sui generis GI system and in developing marketing st rategies to increase the va lue of the products. 
  WT/TPR/M/261/Add.2 
 Page 3 
 
 
  (3) B ILATERAL AND REGIONAL TRADE RELATIONS  
Report by the Government 
Page 17, para. 72 
In the Government's report, the Philippines inform about the ratification of the bilateral Philippines-
Japan Economic Partnership Agreemen t, in force since December 2008. 
 
Question 3 
After 3 years of JPEPA being implemented, could the Philippines provide some insights on its effects 
and impact on the country?  In particular, could the Philippines indicate the percentage of bilateral 
trade that is currently liberalized, in terms of tari ff lines and imports?  Have any provisions of this 
Agreement been further reviewed?  
Answer 
(a) After only three years of implementation tr ade indicators show be nefits from the PJEPA. 
Before the Agreement took effect in December of 2008,  Japan has consistently been ranked the second 
largest trading partner of the Philippines.  But, in 2010, Japan moved up as the number one export 
market and import source of the country. 
Although exports to Japan showed a decreasing tren d from 2006 to 2009, Philippines exports started 
to recover in 2010 and continued to increase in 2011.  In the last six years, the Philippines has 
maintained a favorable balance of trade vis-à-vis Japan. 
 
(b) In 2012, the tariffs have been eliminated on approximately 64% of tariff lines.  The simple average JPEPA preferential tariff is 2.33%. 
 
(c) In accordance with Art 161 of PJEPA, a gen eral review of its implementation and operation 
is scheduled for 2012.   
Secretariat Report (WT/TPR/S/261) 
 
I. ECONOMIC ENVIRONMENT (3) T
RADE PERFORMANCE AND INVESTMENT  
 
(ii) Foreign Direct Investment 
 WTO Secretariat's report 
 Pages 9-11 
 
Question 4 
Can the Philippines confirm that economic activity  undertaken in relation to a new or existing 
investment must respect the Philippines's nationa l labour law, the fundamental rights at work as 
embodied by the ILO's 2008 Declaration on Social Jus tice for a Fair Globalisation and the 8 core ILO 
Conventions (nos. 29, 87, 98, 100,  105, 111, 138 and 182)?  How does the Philippines ensure that 
these are in fact respected? 
Answer 
Decent work is the overarching principle of th e Philippine Labor and Employment Plan (LEP) 2011-
2016.  The Plan adopts the decent work framework as  it provides priority reform areas and policy 
directives in four areas:  (1) employment;  (2) right s at work;  (3) social protection;  and (4) social 
dialogue.  Under the Pillar of Rights at Work, the LEP requires the promotion of better observance of WT/TPR/M/261/Add.2 
Page 4  
 
  labor standards toward protection of workers, th rough intensified labor in spection program through  
the Labor Enhancement Action Program (LEAP).  Th e program also ensures the active involvement 
of local government units in the enforcement of these labor standards. 
 
(3) F
OREIGN INVESTMENT REGIME AND BUSINESS FRAMEWORK  
WTO Secretariat's report 
 
Pages 19 – 20, para. 18 and page vii, para. 5 
 
As indicated in the Secretariat's report, there is considerable scope for improvement in the area of 
investment, even though measures have been ta ken to improve the business environment over the 
review period.  Key sectors, such as agriculture, fisheries and a large number of service sectors, 
remain restricted for foreign investors, resulting in  low FDI flows compared to other countries in the 
region.  
 
Question 5 Does the Philippines intend to introduce more rela xing constitutional and stat utory limitations on 
foreign investment within a short timeframe?  
Answer 
The Philippine Government, throug h all concerned agencies, con tinues to undertake review of 
existing laws with the end view of ensuring t hat the country remains as a competitive investment 
destination. 
Question 6 
Are there any constitutional impediments to enact legislation to relax the existing limitations on 
foreign ownership/participation? 
Answer 
Yes.  The Philippine Constitution is considered suprem e to all laws.  If the equity restrictions are 
specifically provided in the Cons titution, a law providing for contra ry provisions may not be enacted 
by Congress.  
WTO Secretariat's report 
Pages 20-21, para-s 20 and 23 
The Foreign Investment Negative List (FINL) cont ains economic activities in which foreign equity 
either is prohibited or limited to a certain percen tage.  For activities not included in the FINL full 
foreign ownership is permitted.  
Question 7 
Does the Philippines intend to redu ce the existing restrictions to foreign investments regarding 
economic activities included in the list and also for those activities that are not included in the list, 
specifically in the following areas:  domestic-market oriented firms (vs exporters), government procurement, contracts for locally funded public wo rks, firms that provide professional services, rice 
and corn production, deep sea fishing, retail trad e, private radio communica tions networks, banking, 
adjustment companies, condominium ownership a nd land ownership or land lease, gambling and 
manpower recruitment?  Are there any constitutio nal impediments to relax the requirements?  WT/TPR/M/261/Add.2 
 Page 5 
 
 
  Answer 
The Philippine Government, throug h all concerned agencies, con tinues to undertake review of 
existing laws with the end view of ensuring t hat the country remains as a competitive investment 
destination.  It may be noted that the FINL is reviewed every two (2) years to take into account any 
new legislations that w ould amend or repeal laws  affecting investments. 
 
Yes, there are constitutional impediments to relax ing the equity requirements in certain activities 
indicated in the FINL.  
Land ownership restrictions and RA 4726 – Condominum Act of 1966 – allows up to 100% 
ownership of a condominium unit under certain conditions. 
Question 8 
Could the Philippines confirm if foreign ownershi p of land in horizontal  condominiums, industrial 
estates, tourism estates, retirement villages, a nd similar real estate arrangements is allowed?  
Answer 
Under the Constitution, land ownership is limited to Filipino citizens or corporations with at least 
sixty percent of the capital stock belonging to F ilipino citizens.  However, under the Investor's Lease 
Act (R.A. No. 7652), foreign investors can lea se land up to a maximum term of 75 years. 
WTO Secretariat's report 
Page 23, para. 30 
The Philippines announced and held pu blic consultations in 2011 rega rding potential changes in the 
existing Build-Operate-Transfer Law (which is basi cally the legal framework for PPP) as well as in 
the implementing regulations. 
Question 9 
Could the Philippines clarify the state of play as regards:  (a) the announced revision of the 
Implementing Rules and Regulations with resp ect to the existing BOT Law;  (b) proposed 
amendments to the BOT Law? 
Answer 
Proposed amendments to the law are pending in Co ngress.  Proposed amendments to the IRR are for 
approval of the BOT-IRR Committee. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) M EASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs registration, documentation, procedures, and valuation 
WTO Secretariat's report 
Page 25, para. 2 
In the Secretariat's report, it is mentioned that a certificate of origin needs to be presented at 
importation "if required". 
 
Question 10 
Can Philippines please explain when such a certificate is required? 
Answer 
As a rule, the certificate of origin is only required  when importers opt to av ail the preferential tariff 
rates. WT/TPR/M/261/Add.2 
Page 6  
 
  Furthermore, it is stated that "/…/imports must be marked with their country of origin/…/".  In the 
absence of Philippines rules of non-preferential origin, and pending finalization of the WTO Harmonisation Work Program, Members have differe nt criteria to determine this non preferential 
origin.   Question 11 
Can the Philippines explain which criteria are used to  determine the origin to be marked on products? 
Answer 
The General Certificate of origin is contained in Annex D of the Amended Rules & Regulations 
implementing P.D. 930 and has the following criteria: 
 
Type "A" – goods wholly produced and work in the country. Type "B" – goods work but not wholly produced and the exact value of the import contents is  
  known. 
Type "C" – goods work on but not wholly produced  and the value of imported content is only  
  estimated.  
The Secretariat's report mentions the electronic to mobile (e2m) system to lodge an import entry, 
while also hardcopies of import documents still need to be submitted in parallel.  
 
Question 12 
Could the Philippines explain if it intends to remove the requirement for the parallel paper 
submission, and if so by when?  Could the Philippi nes explain if the current legislative framework 
allows electronic submissions only and whether the Philippines intend to change it in this regard? 
Answer 
The E2M System of the Philippines is geared toward s paperless transaction at the BoC.  It should be 
taken in conjunction with the Single Window Project .  Once the Single Window is fully implemented 
(both at the National and International level ) the paperless procedure will be in place. 
 At present, customs rules and regulations only allow the electronic lodgment of import entries (export and warehousing entries with ongoing moves to impl ement also the electronic lodgment).  Hard 
copies of the documents should still be submitte d to the BOC for verification purposes.   
WTO Secretariat's report 
Page 25, para. 4 The Secretariat's report states "Shipments continue to  be classified according to risk: a high risk "red 
lane" (subject to physical examination and document ary review; requires an average of 1-2 days for 
clearance);  a moderate risk "ye llow lane" (documentary review;  re quires an average of four hours for 
clearance);  and a low-risk "green lane" (not subject to any documentary review or physical 
inspection; requires an average of two hours for cl earance).  The BOC also uses the "super green lane" 
(SGL) for qualified importers, to provide immediate clearance. According to in formation provided by 
the BOC, in 2010, 60% of all imports were classifi ed as yellow, followed by red (23%), green (10%), 
and SGL (7%). " 
Question 13 
Could the Philippines elaborate which Risk Manageme nt System (and software, if applicable) is used 
in classifying shipments into red, yellow and green lane categories?   WT/TPR/M/261/Add.2 
 Page 7 
 
 
  Answer 
The Risk Management System is being conducted by  the Risk Management Office of the BOC which 
sets up the parameters/criteria i.e. Country of Orig in, Importer, Broker, Tariff Commodity used in the 
Selectivity System.  In turn, these parameters/crite ria are the bases used whether a shipment should 
be classified under the red, yellow or green lane. 
Meanwhile, the BOC is currently developing the Ph ilippine Customs Intelligence System (PCIS), to 
Adopt BOC reply enhance the Risk Management System of the BOC.  It is an information communication technology (ICT) – project that is  funded by the Japan International Cooperation 
Agency (JICA).  It requires the enhancement of the IC T- based infrastructure of the BOC to collect, 
process, organize, analyze and disseminate operations- related information.  
 
Question 14 
Could the Philippines confirm the average clearance times put forward in the report?  Was any third 
party study undertaken recently to compare release ti mes and if so what were its major outcomes?  
Answer 
 (a) The average clearance time should be counted from the time of filing of an import 
  entry.    (b) As of to date, we are not aware of any third party study. 
 
Question 15 
Could the Philippines explain if, besides the curre nt Super Green Lane system, the Philippines is 
interested to set up an Authorized Economi c Operator scheme and if so by when?  
Answer 
Yes.  Setting up an AEO scheme is under consideration. 
WTO Secretariat's report 
Page 26, para. 5  
The Secretariat's report informs that under ASEAN,  the Philippines is required to implement a 
"national single window".  
Question 16 
Could the Philippines provide the state of play on setting up the National Single Window, particularly 
as regards the number of connected agencies, the re duction of permit release times, and the interlink 
with the e2m system?  
Answer 
The Philippines' "National Single Window" has fo rty (40) attached government agencies already 
linked to the BOC E2M system.  The Philippine BOC is currently reviewing the use of  electronic certificates of origin (e-CO) that will 
facilitate intra-ASEAN trade, reduce business cost  and maximize the efficiency of the government 
limited resources. 
WTO Secretariat's report 
Page 26, para-s 7 and 9 
The Secretariat's report states "a Valuation and Classification Review Committee (VCRC) is 
organized in every district port to solve valuati on and classification disputes.  The decision of the 
VCRC is appealable to the Central Valua tion 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 s hould be filed within five work ing days of its receipt.  If no WT/TPR/M/261/Add.2 
Page 8  
 
  motion is filed in time or if denied, the CVCRRC resolution becomes final.  The aggrieved importer 
may pay under "formal protest". In the Port of Manila, an annual average of 100 valuation/classification disputes have been referred to the VCRC since 2005." 
Question 17 
The WCO Agreement on Customs Valuation requires that  Members provide for the right of appeal to 
a judicial authority.  Can Philippines as a Me mber of the World Customs Organization (WCO) 
confirm that this is possible in the Philippines? 
Answer 
Yes.  The aggrieved importer may still file an appeal  before the Court of Tax Appeals and thereafter 
to the Supreme Court. 
WTO Secretariat's report 
Page 26, para. 9  
The Secretariat's report refers to the accession of the Philippines to the WCO's Revised Kyoto 
Convention with certain reservations.  
Question 18 
Could the Philippines explain which administrative measures are planned and ha ve already been taken 
in implementing the Revised Kyoto Convention?  Could the Philippines explain for when the 
adoption of the Revised Customs Code is foreseen and if it has been prioritised in the legislative 
process? 
Answer 
The Philippines is working on an administrative dir ective to implement the Revised Kyoto Convention 
(RKC) and to establish an RKC Committee. RKC is also  included in the provisions of House Bill 4788 
or the Customs Modernization and Tariff Act, which was already approved by the House of 
Representatives and forwarded to the Senate for consideration. 
(ii) Rules of origin 
WTO Secretariat's report 
Page 26, para. 10 
The Secretariat's report states "t he Philippines has notified the WTO that it does not have non-
preferential rules of origin".  Until finalization of the Harmonisation Work Program in the WTO, 
Members can apply their own non preferential origin.  As the rules applied by the exporting countries 
may therefore be different, the same good unde rgoing the same manufacturing process in one  
exporting country will obtain the origin of that c ountry, while maintaining its previous origin if 
exported from another country. 
 
Question 19 
Could Philippines confirm that an origin certificate is not required in case of non-preferential imports? 
However, if such certificate is required, can Philippines explain its purpose?  
Answer 
Generally, in cases of non-preferential imports, an or igin certificate is not required.  However, for 
purposes of implementing the imposition of sa feguard duty and anti-dumping duty on covered 
imported articles, all importers of articles subject to these measures regardless of Port of exportation 
are required to secure a certificate of origin issued  by the authorized agency office in the source 
country of manufacture per Customs Memorandum Order 6-2003, 5-2006 and 8-2006. 
  WT/TPR/M/261/Add.2 
 Page 9 
 
 
  (g) Other duties, fees, and taxes 
WTO Secretariat's report 
Page 36, para. 26 
In the Secretariat's report it is mentioned "/…/impo rted distilled spirits are subject to higher excise 
taxes than those produced domestically". 
 
Question 20 
Could the Philippines elaborate on its intentions to abolish this discrimination? 
Answer 
The DSB has adopted the Panel's findings and recomme ndations on DS 396 and 403.  The Philippines 
has likewise signified its intention to implemen t the findings and recommendations of the DSB. 
 
(v) Contingency trade remedies 
(a) Safeguard measures 
WTO Secretariat's report 
Page 42, para. 45 
In the Secretariat's report, it is stated that goods  "originating" from i.a. developing countries are 
exempt from certain safeguard measures.   
Question 21 
Can Philippines explain how this origin is determined? 
Answer 
In the determination of the list of developing countries exempted from the imposition of safeguard 
measures, the Philippine Government uses the count ry of origin as stated in the Import Entry 
Declarations (IEDs) filed with the Bureau of Customs. 
 
(c) Other measures 
WTO Secretariat's report 
Page 42, para. 46 
According to the Secretariat's report "the Preside nt may impose an additional ad valorem duty not 
exceeding 100% on goods partly  or wholly originating in or trans ported in a vessel of any country that 
discriminates against Philippine exports.  If discri mination persists or increases after the duty is 
imposed, the President may prohibit the importation of  goods originating in or transported in vessels 
of that country, if in the national interest".  This measure has, however, not been used during the 
period under review."  
Question 22 
Could the Philippines elaborate on its plans to abolish this discriminatory measure?  
Answer 
It may be noted that these have been long standing provisions in the Philippines' legislation and have 
been in place prior to the creation of the WTO.  Notwithstanding, the Philippi nes has not used these 
provisions and does not intend to apply/use th is measure to breach its binding commitments. 
 
On the contrary, the average level of applied MFN tariffs has been declini ng from 9.7% in 1999, to 
7.4% in 2004, to 6.4% in 2011. WT/TPR/M/261/Add.2 
Page 10  
 
  (vi) Standards and other technical requirements 
(b) Sanitary and phytosanitary measures 
WTO Secretariat's report 
Page 44, para. 52  
According to the Secretariat's report  "the Department of Agriculture (DA) remains the national 
enquiry point to the WTO.  The Philippines has made some 200 notifications to the WTO Committee 
on Sanitary and Phytosanitary Measures, covering an array of measures. /…/ " 
 
Question 23 
We welcome the Philippines' SPS notifications received.   Could the Philippines provide its criteria for 
when it notifies a measure to the WTO?  
Answer 
The Philippines notifies SPS measures based on the transparency provision of the SPS Agreement. 
Question 24 
Could the Philippines provide its reasoning for not having notified Administrative Order 22 (New 
rules and regulations for the handling of frozen a nd chilled meat and meat products in the Philippine) 
of 2011?  Could the Philippines clarify if it inte nds to notify the current final draft Administrative 
Order on rules and regulations on hygienic handling in meat markets of newly slaughtered meat and 
on chilled, frozen and thawed meat as can be found on the DA-NMIS website? 
Answer 
AO 22 is a post-border measure that did not modify nor impose additional restrictions or 
requirements to meat importation but rather see ks to strengthen the government's regulatory 
capability to ensure meat safety.  WTO Secretariat's report 
Page 45, para. 53 
According to the Secretariat's report "imports of ag ricultural products, live animals, plants, fish, their 
products and by-products must be accompanied by a sanitary, phytosanitary (SPS) or health certificate 
from the country of origin, and are subject to insp ection upon arrival.  An additional import permit is 
required for meat and meat products, fish and fi sh products, and for all agricultural products.  … ." 
 
Question 25 
Could the Philippines provide its justification on th e requirement of an additional import permit on 
top of an SPS or health certificate for ensuring saf ety of the imported products?  Could the Philippines 
clarify how this additional import permit system ensures a higher safety of the imported product which is already certified (via an SPS or health certif icate) by the authority of the exporting country?  
Answer 
The Philippines has no additional document requireme nt from the country of origin other than a SPS 
or Health Certificate.  For example, in the importation of meat, the Philippines only requires an 
International Veterinary Certificate issued by the National Veterinary Administration at the country 
of origin attesting that, among others, the shipment conforms to the specific Veterinary/SPS requirements of the Philippines as prescribed in  the Veterinary Quarantine Clearance otherwise 
known as SPS Clearance issued by the Bure au of Animal Industry prior to shipment  
  WT/TPR/M/261/Add.2 
 Page 11 
 
 
  Question 26 
Could the Philippines clarify how this import license system does not have a trade-distortive or 
disruptive effect?  
Answer 
The Philippines' import licensing system is not trad e distortive nor disruptive as it does not demand 
any additional requirement other than  what is contained in Administrative Order 26,Series of 2005, 
which has benefitted extensive public consultations  including from our trading partners, and 
subsequently  notified to the WTO. 
WTO Secretariat's report 
Page 45, para. 54 
According to the Secretariat's report "all meat a nd meat products require a Foreign Meat Inspection 
Certificate signed by an authorized veterinarian.  Such imports are also subject to inspection and 
require a Veterinary Quarantine Clearance issued by th e BAI prior to shipment.  Imports of meat must 
originate in a foreign meat establishment recogni zed as an exporting entity by the Veterinary 
Administration and accredited in the Philippines..."   
 
Question 27 
Could the Philippines confirm that its import proce dure for recognition of foreign meat establishments 
is in line with the relevant international standard s (in particular CODEX Alimentarius standard with 
reference: CAC/GL 26-1997)?  In particular, the Philippines are requested to clarify whether it 
follows the principles as described in CAC/GL 26-1997,  such as:  a) evaluation the effectiveness of 
the official inspection and certification systems ra ther than on specific commodities or establishments, 
b) being outcome focused, transparen t, evidence-based, and c) a process which is planned, systematic, 
transparent, consistent, fully doc umented and well communicated, etc? 
Answer 
Yes.  The Philippines import procedures for accreditati on of foreign meat establishments is in line 
with the CODEX standards, and therefore follows the principles as described in those standards.  The 
regulation considered the following CODEX st andards:  CAC/GL 27-1997, CAC/GL 34-1999, 
CAC/GL 20-1995, CAC/GL 47-2003, and CAC/GL 53-2003.  Question 28 
Could the Philippines clarify whether the cost of th e audit has to be paid by the importing or exporting 
country?  If it has to be paid by the exporting countr y, could the Philippines explain its rational for not 
following the CODEX standard which clearly states that these cost should normally be borne by the 
competent authority of the importing country? 
Answer 
The current policy is that expenses covering international fares of the inspection team from the 
Philippines shall be shouldered by the Philip pine Government, while expenses for domestic 
transportation and other expenses in the country be ing inspected shall be shouldered by the 
requesting authority or host country.  This po licy is consistent with the Codex Standards. 
 
In the past, some inspections were shouldered by  the exporting country if the requesting (exporting) 
country insists that the country be inspected as early as possible and could not wait for Philippine 
Department of Agriculture funding for the purpose and exemption from the coverage of AO No. 103 
issued by the President (Directing the Continued Ad option of Austerity Measures in the Government). WT/TPR/M/261/Add.2 
Page 12  
 
  Question 29 
Could the Philippines confirm that the Memorandum  Order 835 requires laboratory tests on 100% of 
imported meat?  Could the Philippines confirm th at Republic Act 9296 and Administrative Order 26 
and 28 series of 2005 require such tests only "when n ecessary"?  If affirmative, could the Philippines 
explain which consideration makes 100% testi ng of imported meat of establishments already 
accredited by the Philippines necessary? 
Answer 
Memorandum. 835 requires rigid sampling procedure fo r the protection of the consuming public.  A 
recent implementation of this memorandum was the testing of imported MDM  (Mechanically 
deboned meat) from 1 September - 31 Octob er 2011 which resulted to an alarming 53 percent 
positive result for Salmonella which prompted the Ph ilippine regulators to reject the whole lot based 
on the Codex Two-Class Attributes Plans (CAC/GL 50-2004).  Interestingly, these importations were 
sourced from foreign establishments accredited by the authority of the exporting country and by the 
Philippines, and likewise covered by an International  Veterinary Health Certificate issued by the 
authority of the exporting country. 
 
While RA 9296 and AOs 26 and 28, series of 2005 require testing of consignments only when 
necessary, the results of random sampling is eno ugh reason for government to institute rigid 
measures for the protection of the consuming public.  
 
WTO Secretariat's report 
 
Page 45, para. 54   
According to the Secretariat's report "The Philippines prohibits imports from certain countries on 
grounds of Avian Influenza, Foot and Mouth Disease, and Bovine Spongiform Encephalopathy." 
 Question 30 
Could the Philippines confirm that it follows the relevant international standards of the World 
Organisation for Animal Health (OIE) and the trad e conditions as described in these standards, in 
particular in relation to avian influenza?  
Answer 
Yes, we strictly follow the OIE standards, more so because the Philippines is free from  Avian Flu  
and BSE, and was recently declared by OIE to be Foot and Mouth Disease free without  vaccination 
at a national scale. 
Question 31 
Could the Philippines justify why some EU Member States are subjected to avian influenza related 
restrictions when they notify an outbreak of Low Pathogenic Avian Influenza?  
Answer 
According to Chapter 10.4.1 of the OIE Terrestrial  Code, Low Pathogenicity Avian Influenza (LPAI) 
type is a notifiable poultry disease and LPAI viruses have the possibility to mutate into a highly 
pathogenic avian influenza (HPAI). 
(vii) Government procurement 
WTO Secretariat's report 
Page 48, para. 67  Based on the new legal framework for procurement,  the Philippines has liber alized the purchase of  WT/TPR/M/261/Add.2 
 Page 13 
 
 
  foreign goods by public authorities and lets i ndividual entities choose or exclude foreign goods. 
Despite this positive evolution compared to the previo us situation, ministerial circulars still encourage 
procuring entities to systemically prefer domestic produc ts.  In parallel, for certain specific sectors, an 
overall ban of foreign goods has been maintained.   Question 32 
Could the Philippines explain the rationale for mainta ining these sectoral restrictions or to instruct 
individual procuring entities to adopt protectionist pr actices against the spirit of the new legislation? 
Answer 
The domestic preference principl e under the Philippine Constitution is recognized under the GPRA. 
However, this does not mean that foreigners are totally banned from participating in public 
procurement;  in fact, they can participate subject  to the requirements and conditions of the GPRA. 
 
(2) M EASURES DIRECTLY AFFECTING EXPORTS  
WTO Secretariat's report 
Pages 50 -53  
Question 33 
What measures – if any – does the Philippines take to ensure that goods destined for export are 
produced in full respect of the fundamental rights at work as embodied by the ILO's 2008 Declaration on Social Justice for a Fair Globalisation and the 8 core ILO Conventions (nos. 29, 87, 98, 100, 105, 111, 138 and 182)?  
Answer 
Please refer to replies on question number 4. (vi) Export support 
 Export processing zones (EPZs) 
WTO Secretariat's report 
Page 52, para. 91 The Secretariat's report refers to Philippines'  export processing zones (EPZs), managed by the 
Philippine Economic Zone Authority (PEZA).  
Question 34 
Do national labour laws, the fundamental rights at  work as embodied by the ILO's 2008 Declaration 
on Social Justice for a Fair Globalisation and the 8 core ILO Conventions also apply in all PEZA 
economic zones?  If not, why not? 
Answer 
National Labour Laws apply in all of PEZA Economic Zones as stated in the PEZA Law (RA 7916 – 
The Special Economic Zone Act of 1995 as Amended by Republic Act No. 8748).  In RA 7916 Chapter 
IV Sec. 37 states that Labor and Management Re lations, the ECOZONE shall be governed by the 
existing Labor Code of the Philippines.  WT/TPR/M/261/Add.2 
Page 14  
 
  (3) M
EASURES AFFECTING PRODUCTION AND TRADE  
WTO Secretariat's report 
Pages 54 -58  
Question 35 
Would the Philippines explain what it is doing to help its producers produce goods which are environmental and socially sustainable?  
Answer 
The Government provides incentives and rewards to en vironmentally-responsible enterprises.  These 
include DOE's annual "Don Emilio Abello Energy E fficiency Awards" to outstanding companies and 
energy managers who have undertaken or are res ponsible in implementing energy efficiency and 
conservation programs to achieve substantial saving s in their energy consumption;  and DENR's 
awards to companies that have shown exemplary en vironmental performance with the Seal of 
Approval under the agency's Philippine Environment Partnership Program (PEPP) 
 Further, the Government secures te chnical assistance projects for the private sector to help them 
adopt more environment-friendly processes or produ ce more environment-friendly products.  Among 
the projects secured by for the private sector in clude the UNDP sponsored the Environmental 
Management Programme for Industry Competitiveness (EPIC), which sought to enhance business 
competitiveness in the global market through environm ental management.  It aimed to enhance the 
integration of ecologically sound practices in indus trial operations and for these to be part of the 
criteria for excellence in industrial performance.  Specifically, one of the program's objectives was 
the promotion of eco-industrial development wh ere materials and industry processes are managed in 
a more integrated manner by industrial estates and lo cators.  BOI served as the project manager of 
the Program.  
 
Another is the JICA-supported implementation of the Environmental Management with Public and 
Private Sector Ownership (EMPOWER) Project.  The project disseminated and expanded the 
industrial environmental management (IEM) concept to  all industrial sectors in the country as well as 
raised public awareness towards IEM, specifically eco-products. 
 Under PEZA, it is likewise ensured that the princi ples of sustainable development are applied during 
all stages of the project in the economic zones.  
 
Pre-operation  
As part of the pre-registration conditions, devel opers and locator enterpris es are required to apply 
for an Environmental Compliance Certificate (ECC).   
Operation 
Annual monitoring of compliance to environmental rules is conducted.   Closure  Prior to the abandonment of the facility, proponent s are required to plan and implement clean-up to 
make sure that wastes are properly managed before th ey turn-over the facility to the next investor. 
  WT/TPR/M/261/Add.2 
 Page 15 
 
 
  (i) Incentives 
WTO Secretariat's report 
Page 54, para-s 96 – 97 and summary, page vii, para. 4.  
The Philippines provides incentives to channel inv estments into sectors considered desirable for 
meeting key objectives, such as generating exports  and employment.  Some requirements to be 
eligible for such incentives are more restrictive for foreign companies than for Philippine companies 
(e.g. a company may be eligible to receive incentives if it exports at least 70% of production (foreign 
owned enterprise), or 50% (for Philippine owned en terprises (at least 60% domestic equity).  The 
Philippine authorities acknowledge the need to rati onalize the incentives system and a Bill is being 
considered in Congress.  
 
Question 36 
Can the Philippines provide more information rega rding the process of this Bill and the further 
timeframe for its plans to rationalize and harmonize all investment incentives? 
Answer 
A bill on incentives rationalization has passed th e House of Representatives, and the Senate is 
currently deliberating on several bills.   Question 37 
Are there any plans to eliminate th e more restrictive requirements that apply to foreign enterprises 
regarding incentives and will they be put at an equal footing as Philippine enterprises? 
Answer 
The Philippine Government, throug h all concerned agencies, con tinues to undertake review of 
existing laws with the end view of ensuring t hat the country remains as a competitive investment 
destination.   
(ii) Competition policy and price controls 
WTO Secretariat's report 
Page 56, para. 104 
The Secretariat's report states "the Philippines does not yet have a general competition law, but 
instead has several laws dealing with competition (T able III.8).  Several bills dealing with competition 
are being deliberated in the Congress. /…/". 
Question 38 
Can the Philippines provide further details as regard s its intention to introduce a general competition 
law, and if possible, provide details on foreseen timeframe?  Could the Philippines clarify its position 
as regards the importance of an i ndependent competition authority? 
Answer 
The enactment of a comprehensive competition law is one of the priority measures of the President. At 
present, the bills are in different st ages of the legislative process. 
 The Philippines acknowledges the importance to have an independent competition authority. 
WTO Secretariat's report 
Page 56, para. 105 
According to the Secretariat's report "on 9 June 2011 , the Department of Jus tice was designated as the 
Competition Authority with the following responsibi lities:  investigate all cases involving violations WT/TPR/M/261/Add.2 
Page 16  
 
  of competition laws and prosecute violators to prev ent, restrain, and punish monopolization, cartels, 
and combinations in restraint of trade;  enfor ce competition policies and laws to protect consumers 
from abusive, fraudulent, or harmful corrupt busin ess practices;  supervise competition in markets by 
ensuring that prohibitions and requirements of compe tition laws are adhered to, and to this end, call 
on other government agencies and/or entities for submission of reports and provision for assistance, 
monitor and implement measures to promote transp arency and accountability in markets;  prepare, 
publish, and disseminate studies and reports on co mpetition to inform and guide the industry and 
consumers;  and promote intern ational cooperation and strengthen Philippine trade relations with 
other countries, economies, and ins titutions in trade agreements." 
Question 39 
Can the Philippines confirm the timeframe fore seen for issuing the implementing rules and 
regulations for EO45?  What will be  the division of roles between the Department of Justice-Office 
for Competition (OFC) and the pre-existing sectoral re gulatory agencies?  Would the decisions of the 
latter be subject to review by the OFC? 
Answer 
The necessary rules and regulations are expected to be finalized by 2012.  
 
The OFC is drafting an omnibus Memorandum of Ag reement (MOA) with sector regulators that will 
spell out the areas of cooperation to  promote and enforce competition laws. 
 Sector regulators work on the basis of their charte rs or organic laws.  The rules on review of their 
decisions are likewise contained under existing laws or rules of court.  Under EO 45, the OFC is 
empowered, inter alia, to enforce competition polici es and laws to protect consumers from abusive, 
fraudulent, or harmful corrupt business practices, and supervise competition in markets by ensuring 
that prohibitions and requirements of competition la ws are adhered to, and to this end, call on other 
government agencies and/or entities for submissi on of reports and provision of assistance. 
(iii) State-trading, state-owned enterprises, and privatization 
WTO Secretariat's report 
Page 58 Question 40 
How does the Philippines ensure the fundamental  rights at work as embodied by the ILO's 2008 
Declaration on Social Justice for a Fair Globalis ation and the 8 core ILO Conventions and are 
respected by government owned or controlled corpor ations (GOCCs), in particular those that are 
engaged in manufacturing or processing destined for export?  
Answer 
In general, there are no GOCCs engaged in manufac turing or processing destined for exports.  But 
even if there were, personnel of GOCCs are prot ected by Civil Service rules and regulations. 
WTO Secretariat's report 
Page 58, para. 109  
The Secretariat's report informs that the Philippi nes has only notified National Food Authority (NFA) 
as a State Trading Enterprise under GATT Article XVII.   
Question 41 
Could the Philippines clarify the functions and st atus of the Philippine International Trading 
Corporation and its subsidiaries?  Have th ese enterprises been notified to the WTO?  WT/TPR/M/261/Add.2 
 Page 17 
 
 
  Answer 
The Philippine International Trading Corporation (PITC) administers the Philippines' Countertrade 
Programme.  PITC, a government-owned and contro lled corporation (GOCC), was created in 1973 
under Presidential Decree No. 252 to trade with  socialist and other centrally-planned economy 
countries.  On 25 January 1977, PITC was given a broader mandate to be the prime mover in the 
expansion of Philippine trade worldwid e.  Since then, it has also been involved, inter alia, in exports, 
EXIM services, countertrade/special trading arra ngements, bulk importation, procurement for 
government institutions, marketing, and dealerships.  PITC is not considered as a State Trading 
Enterprise within the definition of the WTO primar ily because it does not have any special rights or 
privileges granted by the state relative to its ex port or import operations.  PITC engages in trading 
business but is subject to the usual requirements  of government relative to securing licenses and 
permits as needed.  (iv) Intellectual property rights 
(d) Trade marks 
WTO Secretariat's report 
Page 61, para. 121  
It is stated in the Secretariat's report that trademar ks have to be registered in the Philippines to be 
protected.   
Question 42 
What about rights to a trademark acquired through use in good faith? 
Answer 
Trademark (TM) registration in the Philippines is prima facie evidence of the registrant's exclusive 
right to the registered mark.  In the event that a TM owner actually using a mark fails to register such 
mark and another person obtains registration (or fil es an application for registration of the mark 
ahead of the prior user in good faith) the TM ow ner may avail himself of the following remedies 
under the Intellectual Property Code:  unfair compe tition, opposition, and ca ncellation proceedings. 
Actual prior use in good faith can also be used as a defense in an infringement case that may be brought by the TM owner who obtains registration for the mark against the prior user in good faith. 
 
WTO Secretariat's report 
Page 66, para. 5 
Certain sensitive sectors are restricted for foreign inv estors, notably in agriculture (corn, rice, sugar).  
 
Question 43 
Could the Philippines further elaborate on the reasons for such restrictions? Are there any intentions 
to allow access, which could have positive effect s in terms of improvements in the level of 
mechanisation, productivity and gr owth in the agricultural sector? 
 
Answer 
The restrictions can be traced to certain genera l provisions in the 1987 Constitution. There are no 
initiatives at this time to ease such restrictions. 
 WT/TPR/M/261/Add.2 
Page 18  
 
  (3) S
ERVICES  
(ii) Financial services 
(a) Banking services 
WTO Secretariat's report 
Page 78, para. 51 
The Secretariat's report describes foreign investment in the banking sector. 
Question 44 
Could the Philippines clarify whether the moratori um on the issuance of new bank licences initiated in 
1999 continues to prohibit the establishment of a su bsidiary by a foreign bank pursuant to R.A. No. 
7721?  Are there any intentions to change the moratorium? 
Answer 
In the case of setting up of new banks, the exist ing moratorium was partially lifted to allow the 
licensing of new thrift and rural banks that are mi crofinance oriented.  The lifting of moratorium on  
the opening of new commercial banks (including subsidiaries of foreign banks) regardless of 
ownership is currently being considered.  
 
WTO Secretariat's report 
 Page 79, para. 52 
The Secretariat's report states "e xcept for cooperatives, whose owne rship is limited to Filipino 
citizens, there are no restrictions on the type of bank  that foreigners may invest in, and foreign banks 
are permitted to perform the same functions, enjoy th e same privileges, and ar e subject to the same 
limitations as imposed on domestic banks of the same category." 
Question 45 
Could the Philippines clarify whether the ban on fo reign ownership of rura l banks persists and 
whether there are any intentions to change this ban?  
Answer 
Foreign ownership of individuals and non-bank entiti es in rural banks is currently not allowed under 
existing law.  However, in order to encourage, pr omote and maintain a stable, competitive, efficient 
and dynamic banking and financial system, the Philippi ne Congress has already passed House Bill 
No. 5360 in January 2012 while Senate Bill No. 3089 remains pending in the Philippine Senate.  Both 
bills amend Sections 4 and 5 of R.A. No. 7353 by allowing non-Filipino citizens to own, acquire or 
purchase up to 40 per cent of the voting stock of  a rural bank and also by allowing non-Filipino 
citizens to become members of the board of a rura l bank to the extent of their equity in the bank 
concerned.  Question 46 
With respect to a 1947 law (RA 133) prohibiting fo reign mortgagees from participating in mortgage 
foreclosure sales, could the Philippines clarify th e prospects for expanding the relief provided under 
RA9501 (limited to banks lending to MSMEs), by a llowing all foreign banks to bid and take 
possession of foreclosed real estate wit hout any transfer of ownership?  
Answer 
The relief provided under Republic Act No. 9501 (Magna Carta for Micro, Small and Medium 
Enterprises (MSMEs)) enacted on 23 May 2008 allowing foreign banks to bid and take possession of 
foreclosed real estate without any transfer of ow nership remains an exception to the Constitutional 
prohibition against foreign holding of land.  In this regard, further legislative reforms are possible to  WT/TPR/M/261/Add.2 
 Page 19 
 
 
  expand the relief provided in this law to cover l ands mortgaged by non-MSMEs.  The Philippines will 
continue to examine the constraints raised by the EU in this context. 
(iii) Telecommunications 
WTO Secretariat's report 
Page 82, para. 66 
The Secretariat's report informs that "there have  been no changes to the laws and regulations 
governing telecommunications since the Philippines' pr evious Review (Table IV.8).  At that time 
three ICT-related bills were pending in Congress,  the Convergence Bill, DICT bill, and National 
Telecommunications Commission (NTC) Reorganization Bill.  None of these has yet been enacted, but they remain on the Government's reform agen da as articulated in the Philippines Development 
Plan 2011-16.  In addition the Government intends  to reassess out-dated aspects of the Public 
Telecommunications Policy Act and to develop a competition policy framework for the ICT sector." 
Question 47 
Could the Philippines elaborate on which aspects of  the Public Telecommunications Policy Act it 
intends to reassess and its timetable?  
 
Answer 
Access charges, revenue sharing, and the uni versal access obligations are among those the NTC 
intends to reassess.  Question 48 
Could the Philippines clarify the state of play and timeline for developing the competition policy 
framework for the ICT sector?  What would be the role of NTC relative to DOJ-Office for Competition created under EO45?   
Answer 
The NTC will continue to discharge its functions  as a sector regulator und er its charter or organic 
law.  The OFC is conducting close consultations with  sector regulators, like the NTC, as it believes 
that the matter of ensuring a level playing field in  the market requires collaborative effort within the 
government.  Licensing system  
WTO Secretariat's report 
Pages 83 – 84, para. 69 The Secretariat's report describes requirements franc hised public telecoms companies must undergo in 
order to provide the relevant service.  
Question 49 
Could the Philippines elaborate on the criteria applie d by NTC to determine whether a Certificate of 
Public Convenience and Necessity (CPCN) is to be granted?  
Answer 
The criteria applied by the NTC to determine wh ether a Certificate of Public Convenience and 
Necessity (CPCN) is to be granted are technical, legal, economic and financial viability of the project  
being applied for.  In granting  a Certificate of  Public Convenience and Necessity (CPCN) or a 
Provisional Authority (PA) the NTC requires carriers to demonstrate that they are technically and 
financially capable to implement the proposed ne tworks and services.  To determine financial WT/TPR/M/261/Add.2 
Page 20  
 
  capability, the applicant must have at least 30% in pai d capital of the total capital required to build 
the proposed networks. 
WTO Secretariat's report 
Page 84, para. 71 
According to the Secretariat's report "cross-owners hip restrictions apply, and no entity can have a 
franchise in both telecommunications and broadcasti ng (radio or television), either through airwaves 
or by cable.  Foreign equity in a private ra dio communications network is limited to 20%.  
Broadcasting and TV are constitutionally  reserved for Filipino nationals." 
Question 50 
Could the Philippines clarify if there are any cons titutional impediments to enacting legislation to 
relax restrictions on foreign equity in  private radio communications networks? 
 
Answer 
Section 11, Article XII of the Philippine Constitution. 
 
Question 51 
Could the Philippines clarify its plans as rega rds the adoption of a digital-TV standard? 
 
Answer 
The Commission is in the process of conducting inte nsive consultations on the adoption of digital TV 
standard.  A decision may be made within the first half of 2012. 
 
(i) Regulatory developments over review period 
WTO Secretariat's report 
Page 85, para. 77 
 The Secretariat's report informs that "the NTC sets  tariffs for telecoms providers.  However, if a 
service has sufficient competition to ensure fair a nd 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. " 
Question 52 
Could the Philippines clarify the criteria used to de termine "sufficient competition" that allows NTC 
to exempt a service from its rate or tariff regul ations?  Which providers' tariffs are currently 
regulated?  
Answer 
If prices continue to decrease and quality of service improves, there is sufficient competition.  Rates 
for fixed line telephone service are currently regulated. 
 Market developments  WTO Secretariat's report 
 
Page 85, para. 79 
 
The Secretariat's report states that "the fixed-line market is dominated by Philippine Long Distance 
Telephone Company (PLDT), which had 53.15% share of subscribed lines in 2010."  WT/TPR/M/261/Add.2 
 Page 21 
 
 
  Question 53 
Could the Philippines elaborate on the rationale for allowing the merge of PLDT and Digitel, which -
when combined - are said to constitute  some 70% of the mobile market? 
 
Answer 
The sale of the majority shares of Digitel to PLDT was approved subject to the condition that PLDT 
will divest CURE which has 10MHz x 2 assignment in  the 2100MHz 3G frequencies and that Digitel 
shall continue to offer unlimited type of services. 
(v) Tourism WTO Secretariat's report 
Page 95, Table IV.13 
Table IV.13 provides an overview of Market access and investment conditions in tourism services.  
 
Question 54 
Could the Philippines clarify the legal basis for the restriction that, for tourism projects, private land 
may only be leased to foreigners for i nvestments of a minimum of US$5 million? 
 
Answer 
Section 5(5) of Republic Act 7652, otherwise known as the Investors'  Lease Act, and Section 4, Rule II 
of the Implementing Rules and Regulations. 
(vi) Professional services 
WTO Secretariat's report 
Page 97, para. 131 The Secretariat's report states "under the Constitution (Article XII (Section 14), and as outlined in the 
Eighth Regular Foreign Investment Negative List, th e practice of all professions in the Philippines is 
limited to Filipino citizens, excep t in cases prescribed by law.  However, Article 40 of the Labour 
Code provides that non-resident aliens may be admi tted to the Philippines to supply a service after it 
has been determined that a competent and willing Filipi no is not available at the time of application.  
Moreover, the Philippines Professional Regulation Commission Modernization Act (2000) allows the 
PRC, upon the recommendation of the professional regulatory body concerned, to approve the licensing and registration of foreign professionals, w ith or without examination, when substantially 
the same requirements for licensing and registration for the profession exist in the respective country, 
and on the basis of reciprocal treatment.  Licences or special temporary permits may be granted to: 
foreign professionals under reciprocity and other in ternational agreements; consultants engaged in 
foreign-assisted government projects;  and employees of foreign private firms or institutions pursuant to law
, or health professionals engaged in time-limited humanitarian missions." 
Question 55 
Could the Philippines clarify the motivation for incl uding the practice of professions in the Foreign 
Investment Negative List, which is intended to cat alogue limitations on fore ign equity in non-banking 
business sectors?  Related to this, is it possible to  distinguish between, and clarify public policy with 
respect to, ownership of firms that provide professional services versus the practice of professions by individuals? 
Answer 
There is a difference between doing business and the pr actice of the profession in the Philippines.   
 WT/TPR/M/261/Add.2 
Page 22  
 
  The different Professional Regulatory Laws (PRLs) and the Professional Regulation Commission 
(PRC) Modernization Act of 2000 (R.A. 8981) allo w the practice of profession of foreign nationals as 
natural persons and not as juridical persons.   Under the abovementioned laws the ownership of fir ms that provide such professional services shall  
be owned by Filipinos while the practice of prof essions by individuals may be allowed to foreign 
nationals certain conditions 
 
 
__________