President Arroyo also retained the exemption (zero tariff) of certain imported equipment, machinery and other inputs of agricultural and fishery industries as provided for under Section 109 of Republic Act 8435, otherwise known as the Agriculture and Fisheries Modernization Act (AFMA) of 1997.
The President’s directives on these tariff rates are contained in Executive Order (EO) No. 127, 128 and 129, all dated Sept. 23, copies of which were obtained yesterday by The STAR.
In EOs 128 and 129, President Arroyo cited the Philippine government’s compliance with AICO agreement as one of the contracting member-states of the Association of South East Asian Nations (ASEAN) which signed this in Singapore on April 27, 1996.
The President pointed out in EO 128 that the Philippines is a participating country in the approved AICO Arrangements of Toyota Motor Philippines Corp. along with Malaysia and Thailand.
Under this arrangement, Toyota will import certain parts/components for Toyota Corolla and Camry passenger cars from Assembly Services Sdn.Bhd. and T & K Autoparts Sdn.Bhd. of Malaysia and with Toyota Motor Thailand Co. Ltd. certain original equipment manufacture (OEM) automotive.
In exchange, Malaysia and Thailand will import from the Philippines complementary OEM component parts for Corolla and Camry.
President Arroyo explained in EO 128 that participating companies in the approved Toyota AICO arrangements shall qualify for zero five percent preferential tariff rates to be extended by Malaysia, Thailand and the Philippines for Toyota in consonance with Articles 5 and 7 of the basic agreement of the AICO Scheme.
In EO 129, President Arroyo said the Philippines is a participating country in the approved AICO arrangement of Honda Cars Philippines Inc. along with Indonesia and in the approved AICO arrangements of Ford Motor Co. Philippines Inc. along with Thailand.
Under the Honda AICO arrangement, Honda Philippines will import from PT. Honda Prospect Motor of Indonesia certain OEM automotive parts/components for Honda CR-V Light commercial vehicles. In exchange, Indonesia will import from the Philippines complementary parts/components for the OEM of Honda CR-V Light commercial vehicles. In exchange, Indonesia will import from the Philippines complementary parts/components for the OEM of Honda CRV-V Light commercial vehicles.
In the case of Ford AICO Arrangement, the Ford Motor Co. Philippines and Ford Group Philippines Inc. will import from Auto Alliance Thailand Co. Ltd. certain OEM automotive parts/components for Ford Escape/Mazda Tribute and Ford Laser/Mazda Protégé passenger cars and completely built units (CBUs) of Ford J97 Ranger pick-up trucks for the transport of goods.
In exchange, Thailand will import from the Philippines CBUs of Ford U204 Escape/14 Tribute SUV and C206 Laser/J39 Protégé passenger cars.
Zero to five preferential tariff rates would also be extended by Indonesia, Thailand and the Philippines for Honda and Ford car companies.
In the annual review of tariff exemptions granted to product lists in the AFMA. President Arroyo issued EO 127 which retained to zero duty rate up to Feb. 8, 2003 for the importation of articles for agricultural and fishery industries.
The President specifically cited Section 109 of the AFMA which grants all enterprises engaged in agriculture and fisheries as duly certified by the Department of Agriculture in consultation with the Department of Finance (DOF) and Board of Investments (BOI) and shall for five years exempt from payment of tariff duties for the importation of all types of agriculture and fishery inputs, machinery and equipment provided, however, that these imported articles shall be for the exclusive use of the importing enterprise.