Tariff and Customs Code

Bam Renews Call for Updated Fees for Balikbayan Boxes

Senator Bam Aquino renewed his call to update the current minimum fee threshold for balikbayan boxes, making it cheaper and hassle-free for 10 million overseas Filipino workers (OFWs) to send their packages to their loved ones in the Philippines. 

Sen. Bam, chairman of the Senate Committee on Trade, Commerce and Entrepreneurship, issued the pronouncement after OFWs expressed alarm over the Bureau of Customs’ plan to tax and randomly inspect balikbayan boxes as part of the agency’s anti-smuggling campaign.

Last Aug. 26, 2014, Sen. Bam filed Senate Bill No. 2373, seeking to update the current de minimis threshold, or the minimal volume of declaration of goods in the customs for consignments, balikbakan boxes and other low-value and low-risk packages.

“Now that the spotlight is focused on the issue, we call on fellow lawmakers to hasten the passage of the measure to make it cheaper and hassle-free for 10 million OFWs to send their packages to their loved ones in the Philippines,” Sen. Bam said. 

Currently, the Philippines has the lowest de minimis threshold in the ASEAN, at PhP10 or US$0.23. The ASEAN average threshold is at a hundred dollars.

In his bill, Sen. Bam wants the de minimis level to increase to a more realistic and relevant figure of P10,000 by amending Sec. 709 of the Tariff and Customs Code.

Through this, Aquino said balikbayan boxes and other packages of OFWs, entrepreneurs and other individuals will be processed by Customs faster with minimum fees.

“The extremely low Philippine threshold has not been changed since 1957 and is clearly antiquated. It needs to be updated to be reflective of current prices,” the senator said. 

The lawmaker explained that thresholds for customs declaration signify increased documentation and processes for shipments at entry points in the country.

“Increased documentation leads to larger turnover and delivery time of goods, and larger administration costs that would yield lower revenue impact for both businesses and government,” Sen. Bam said.

“While we understand that random inspection is part of our efforts to curb entry of illegal goods, we should not burden our honest and hardworking OFWs by subjecting their packages to searches that result in damages, pilferages, and loss of goods, which they purchased and sacrificed for their loved ones back home,” he added.

“In addition to this reform, let’s continue to modernize our Customs systems to make our inspections more transparent and efficient, and supportive to our OFW families,” Sen. Bam, who also presided over the port congestion hearings.

Furthermore, Sen. Bam stressed that it will enable the BOC to focus its efforts in looking out for high-value, high-risk and high-revenue goods for collection and enforcement.

SBN-2364: Amending Sec. 11009, Tariff and Customs Code (Carriage of Container Vans)

As a response to the call of the President and key stakeholders, this measure seeks to amend Section 1009 of the Presidential Decree No. 1464, otherwise known as the Tariff and Customs Code of 1978 to introduce reform in the shipping industry.

Given that the Philippines is an archipelago composed of more than 7,100 islands, the transport of goods relies heavily on sea routes interconnecting the islands. Shipping is the means of transporting goods between islands and even in and out of the country. Shipping cost impacts the movement and price of traded goods.

Facilitating inter-island trade in the country has become costly and cumbersome for micro, small and medium enterprises (MSMEs). Currently, inter-island shipping is exclusively reserved for ships bearing the Philippine flag. While this helps the domestic shipping industry, the cost of shipping is hampering trade especially for the MSMEs.

This measure seeks to allow foreign ships to call in multiple ports provided that their cargoes are intended for import or export and duly cleared by the Commissioner of Customs. This would allow importers and exporters to co-load in foreign ships going in or out of the Philippine jurisdiction.

Moreover, this bill gives clarification on the definition of common carriers and public service in the shipping industry. With this bill, foreign cargoes shall not be subjected to the law concerning common carriers and public services as defined in the Civil Code and the Domestic Shipping Development Act, respectively.

MSMEs who are importing or exporting goods will be able to access a cheaper alternative in transporting their goods through co-loading in foreign ships. Ultimately, this leads to lower prices of goods for the Filipino public.

In view of the foregoing, the approval of this bill is earnestly sought.

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Senate Bill No. 2373: Amending Sec. 709, Tariff and Customs Code

For the Overseas Filipino Workers (OFW), going back home to the Philippines is something they look forward to. And part of this experience is putting up a package of gifts to bring home to family, relatives and friends. The balikbayan box has been the symbol for the OFWs – of their sacrifices and travails going abroad, of their desire to provide better lives for their loved ones.

Yet, sending a balikbayan box home becomes burdensome for these modern-day heroes. Currently, these packages undergo a tedious process in the customs and are charged fees that are discouraging for OFWs to send more regularly. Thus, there is a need to provide the ten million Filipinos abroad, who have been already contributing greatly to the economy the past four decades, a better customs administration by reducing the de minimis threshold.

The de minimis threshold is the minimal volume of declaration of goods in the customs for consignments. low thresholds for customs declaration signify increased documentation and processes for shipments at entry pOints in the country. Increased documentation leads to larger turnover and delivery time of goods, and larger administration costs that would yield lower revenue impact for both businesses and government.

Presently, the Philippines has the lowest de minimis threshold in the ASEAN, at PhP10 or US$0.23.  The ASEAN average threshold is at a hundred dollars, which is four hundred times’ that of the Philippines’. The extremely low Philippine threshold has not been changed since 1957 and is clearly antiquated. It needs to be updated to be reflective of current prices.

By increasing the de minimis level to Ten Thousand Pesos (PhP10,000.00), the proposed measure provides a more realistic and relevant threshold. It enables the Bureau of Customs to focus its efforts in looking out for high-value, high-risk and high-revenue goods for collection and enforcement, thereby making customs processes more efficient.

Then, the balikbayan boxes and other low-value and low-risk packages and of OFWs and others, such as entrepreneurs and individuals, who purchase small goods online, are allowed to go through customs faster with minimum fees.

As the saying goes, MAMI: minimum activities for maximum impact for government, private institutions and individuals.

In view of the foregoing, the approval of this bill is earnestly sought.

 

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