Things to Consider: Importation to the Philippines

THINGS TO CONSIDER: IMPORTATION TO THE PHILIPPINES

Importation plays a vital role in the Philippine economy, supporting domestic industries, stabilizing supply chains, and meeting consumer demand. However, importing goods into the Philippines is not merely a commercial transaction—it is a regulated legal process governed by customs, tax, trade, and regulatory laws. Failure to comply with these requirements may result in delays, penalties, seizure, or forfeiture of goods.

Legal Framework Governing Importation

The principal law governing importation is Republic Act No. 10863, otherwise known as the Customs Modernization and Tariff Act (CMTA). The CMTA repealed the former Tariff and Customs Code of the Philippines and aligned Philippine customs laws with international trade standards.¹

The CMTA is implemented and enforced by the Bureau of Customs (BOC), which operates under the supervision of the Department of Finance.²

Importation is likewise governed by:

  • The National Internal Revenue Code of 1997, as amended (for VAT and excise taxes)³
  • Tariff schedules issued pursuant to executive authority⁴
  • Special laws regulating specific goods (e.g., food, drugs, agriculture, chemicals)
  • International trade agreements to which the Philippines is a party⁵

Who Is an Importer?

Under the CMTA, an importer refers to any person or entity who:

  • Is the owner or consignee of the imported goods; or
  • Has the right to make entry of the goods into customs territory.⁶

To legally import goods, the importer must:

  • Be registered with the Bureau of Customs
  • Be accredited under the Client Profile Registration System (CPRS)
  • Be registered with the Bureau of Internal Revenue (BIR)⁷

Failure to secure proper registration may result in denial of customs clearance.

Basic Importation Process

1. Pre-Importation Compliance

Before shipment, the importer must determine whether the goods are:

  • Freely importable
  • Regulated - requiring permits or clearances from government agencies
  • Prohibited - in which case importation is absolutely barred

The CMTA expressly prohibits the importation of goods contrary to law, public morals, or national security.⁸

2. Filing of Goods Declaration

Upon arrival of the shipment, a Goods Declaration must be filed within the period prescribed by law, containing:

  • Full description and quantity of the goods
  • Customs value
  • Tariff classification
  • Country of origin⁹

False or inaccurate declarations may result in penalties or forfeiture.

3. Customs Assessment and Examination

The Bureau of Customs conducts assessment and, where necessary, physical or non-intrusive inspection of goods based on risk management principles.¹⁰

4. Payment of Duties and Taxes

Imported goods are released only upon full payment of:

  • Customs duties
  • Value-added tax (VAT)
  • Excise tax, when applicable¹¹

5. Release of Goods

After compliance with all customs and regulatory requirements, the goods are released for withdrawal from customs custody.¹²

Duties, Taxes, and Landed Cost

Customs duties are assessed based on tariff classification and customs value.¹³

VAT on importation is imposed at twelve percent (12%) of the total landed cost, which includes:

  • Customs value
  • Customs duties
  • Excise tax, if any
  • Other charges prior to release¹⁴

Undervaluation or misdeclaration of value constitutes a customs offense punishable under the CMTA.

Regulated and Prohibited Importations

Certain goods require clearance from relevant government agencies, including but not limited to:

  • Food and drugs
  • Agricultural and fishery products
  • Chemicals and hazardous substances
  • Communications and electronic equipment¹⁵

The CMTA prohibits the importation of specific goods such as:

  • Prohibited weapons
  • Counterfeit or pirated goods
  • Obscene or immoral materials
  • Used clothing, subject to limited statutory exceptions¹⁶

Role of Customs Brokers

Under Philippine law, customs clearance may generally be undertaken only by licensed customs brokers, unless the importer is duly accredited and qualified to transact directly with the BOC.¹⁷

While brokers facilitate customs transactions, the importer remains legally responsible for the accuracy of declarations and compliance with customs laws.

Penalties and Enforcement

The CMTA imposes administrative and criminal liabilities for customs violations, including:

  • Misdeclaration
  • Undervaluation
  • Smuggling
  • Importation of prohibited goods¹⁸

Penalties may include:

  • Administrative fines and surcharges
  • Seizure and forfeiture of goods
  • Suspension or cancellation of import privileges
  • Criminal prosecution in aggravated cases¹⁹

Importation in the Philippines is a legally regulated activity requiring strict compliance with customs, tax, and regulatory laws. Importers must be diligent in understanding the legal framework governing importation to avoid costly delays, penalties, and enforcement actions.

Given the complexity of customs regulation and the potential exposure to administrative and criminal liability, businesses engaged in importation are strongly advised to obtain competent legal and customs advisory support.

For more information, please contact us at info@gqlaw.com.ph or at redmaines@gqlaw.com.ph.

  1. Republic Act No. 10863 (2016), Sec. 100.
  2. Id., Secs. 201–202.
  3. National Internal Revenue Code of 1997, as amended, Secs. 107, 148–150.
  4. See Executive Order No. 62 (2018), as amended.
  5. CMTA, Sec. 101; WTO Valuation Agreement.
  6. CMTA, Sec. 102(k).
  7. CMTA, Sec. 117; BOC Customs Administrative Orders.
  8. CMTA, Sec. 118.
  9. CMTA, Secs. 401–402.
  10. CMTA, Secs. 201, 403.
  11. CMTA, Sec. 104; NIRC, Sec. 107.
  12. CMTA, Sec. 407.
  13. CMTA, Secs. 201, 202.
  14. NIRC, Sec. 107(A).
  15. CMTA, Sec. 117; special regulatory laws.
  16. CMTA, Sec. 118(f).
  17. CMTA, Sec. 1300.
  18. CMTA, Secs. 1400–1430.
  19. CMTA, Secs. 1401–1411.