Philippines plans to abolish zero tariff under MFN

MANILA, Philippines - The government is planning to abolish all the zero tariff under the most favored nation (MFN) as part of its campaign to increase revenues, the Department of Trade and Industry (DTI) said yesterday.

“We will impose a minimal tariff. Instead of zero we will make it one percent,” Trade Secretary Gregory L. Domingo said. Domingo cleared that this does not include tariff lines of ASEAN countries.

In a press conference, Domingo cleared that this is only a proposal. He said the one percent will be used to cover the administrative costs. However, the secretary admitted he has no idea as to how many of the 11,490 tariff lines are zero.

Earlier, the Tariff Commission (TC) said the MFN tariff lines with rates ranging from zero to 65 percent are mostly likely to be carried over the next four years or until 2015. Tariff Commission chairman Edgardo Abon indicated this direction, which was met with no opposition from the business community.

The Commission has initiated the review because the current Comprehensive Tariff Program (CTP) is only up to Dec. 31, 2010. “Our Tariff and Customs Code is up to 2010 only, so we are doing this to bring out the rates for 2011 to 2015,” Abon said.

MFN tariffs cover the duty rates on imports coming from countries that the Philippines has no trade agreements. At present, the country has free trade agreement with the Asean, China, Korea, Australia and New Zealand.