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TARIFF REFORM PROGRAM

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Kara Verano

on 10 March 2017

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Transcript of TARIFF REFORM PROGRAM

TARIFF REFORM PROGRAM
design by Dóri Sirály for Prezi
is the review/restructuring of the Philippine tariff system that government undertakes on a continuing basis to make the tariff structure responsive to the needs of the economy taking into account changing patterns in trade and advancements in technology.
covered all headings from chapters 1-99 of the tariff schedule
tariff modifications were staged over a 5 year period to cushion the impact of the changes on the various sectors of the economy
modification were expected to induce a shift in the composition of imports of raw materials from those with advanced processing to those which are more basic or in crude form.
tariff band was narrowed from 10%-100% to 10%-50%
it restructured the system of protection to industries into one less biased towards any particular industry or industry groups
TARIFF REFORM PROGRAM
Competitiveness of local industries
Address bias against agriculture
Eliminate tariff distortions
Trade facilitation
Removal of incentive to smuggle
Gains from TRP
TARIFF REFORM PROGRAM-I
The new package of tariff adjustments under TRP-II was promulgated and signed by the President under Executive Order (E.O.) No. 470 on July 20, 1991 and became effective on August 24, 1991.
E.O. 470 incorporated a five-year phase-in period from 1991 to 1995 and transition rates to provide local industries reasonable time to make the necessary adjustments. The E.O. covered some 80% of the Tariff and Customs Code (TCC).
The number of Harmonized Commodity Classification and Coding System (HS) lines was reduced by 10%, from 6,193 tariff lines to 5,561 lines. This reduction, which made for easier customs administration, was due to the simplification of tariff nomenclature (e.g., tariff lines that would eventually have the same rates of duty were combined into a single line) but such nomenclature modification adhered faithfully to the basic text of the international Harmonized System.
TARIFF REFORM PROGRAM-II
TRP-III further liberalized the trade environment by reducing the level and spread of tariff rates towards a uniform level of protection across all sectors.

TARIFF REFORM PROGRAM-III
In the institution of tariff reforms, a review of existing protective rates was conducted to remove or phase out the following;

those that were excessive;
those which outlived their usefulness; and
those were the burden of protection outweighed the return
was to keep industry effective protection rates within a range of 10%-80% from the prevailing schedule of effective protection rates which ranged from excessively high to low levels
OBJECTIVE
OBJECTIVE
reduce the overall level of protection within and across industries
more efficient resource allocation
improved access of industry to essential inputs at lower prices
availability of more affordable and better-quality goods for consumers; and
enhanced competitiveness of local industries in the domestic and export markets

OBJECTIVES
Promote global competitiveness;
Simplify the tariff structure for ease of customs administration; and
Provide a level playing field for local manufacturers vis-a-vis foreign competition

IMPLEMENTATION OF TRP-III
The issuance of EO 189 on July 18,1994 marked the onset of TRP-III. Other EOs issued were:

EO 264 (effective August 28,1995)
which contained the tariff modifications on industrial products;


EO 288 (effective January 15,1996)
which set in place the tariff reductions on non-sensitive agricultural products (those not covered by quantitative restrictions);

EO 313 (effective May 7,1996)
which provided interim tariff protection to sensitive agricultural products as part of country's commitment being a member of the World Trade Organization (WTO), and identified a total of 170 tariff lines subjected to tariff quotas; and
EO 461 (effective January 4,1998)
which imposed 3% duty on imported crude oil and refined petroleum products.
TARIFF REFORM PROGRAM-IV

TRP-IV was initiated to review and evaluate the impact of the pace of tariff reductions on the competitiveness of local industries.
It was intended to smoothen the pace of the schedule of tariff reductions for deserving industries and to correct any remaining distortions in the tariff structure.
IMPLEMENTATION OF TRP-IV
TRP-IV was concluded with the issuance of the following EOs:

EO 465 (January 22,1998)
- provided the re-calibrated tariffs for the Philippine Winner products;
EO 486 (July 10, 1998)
- provided the re-calibrated tariffs for residual items not covered by the Philippine Winners; reduced the number of tariff lines subject to tariff quotas from 170 under EO 313 to 144, and
EO 334 (January 3, 2001)
- provided the tariff schedule from 2001 to 2004 for all products(excluding meat products under HS Chapter 2. rice, corn and sugar); and provided the tariff band of 0%-5%(except for some agricultural products at 30%) in 2004.
Summary of TRP I to TRP III
PROGRAM
PERIOD
POLICY
OUTCOME
TRP I
TRP II
TRP III
1981-1985
1991-1994
1994-1997
Export promotion
Trade liberalization/Global competitiveness
Trade liberalization/Global competitiveness
tariff band narrowed from 10%-100% to 10%-50%
final tariff rates cluster around 4 levels 3% 10% 20% & 30%
tariff rates of 3% and 10% in 2003 and uniform 5% in 2004
TRP IV
DURATION
:

POLICY
:

TARGET
:
1998 to present
competitiveness of local industries
0%-10% 2003
0%-5% 2004
prepared by: Kara Verano
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