The Philippines introduce safeguard measure on imported vehicles

After launching several safeguard measures against different products, the Philippines will soon be collecting provisional safeguard duty on motor vehicles from various countries. The subject vehicles are completely build-up passenger cars classified under the ASEAN Harmonized Tariff Nomenclature (ATHN) heading of 8703 and light commercial vehicles specifically pick-up trucks under AHTN codes of 8704.2119 and 8704.2129.

The measure was decided by the Department of Trade and Industry in a bid to protect locally manufactured vehicles and employment from the surge of imported vehicles.

The provisional safeguard duty will be collected in form of cash bond amounting to PHP 70,000 (approx. USD1,450) per unit of passenger vehicle and PHP 110,000 (approx. USD2,300) per unit of light commercial vehicles. The new measure takes effect for 200 days and will be finalized once a decision has been made from the formal investigation.

Excluded in the investigation are used vehicles, completely knocked-down and semi-knocked-down passenger vehicles and light commercial vehicles. Special purpose vehicles such as ambulance, hearse, electric motor vehicles, and luxury vehicles with high end-features with value of more than $25,000 for passenger cars and $28,000 for light commercial vehicles are excluded. Imports from developing countries are also exempted.

The Philippines sources a significant portion of its vehicle imports from the ASEAN region. In 2019, the top two sources of passenger vehicles were Indonesia and Thailand. Thailand also accounts for 99% of imported light commercial vehicles into the country. Aside from the new safeguard duty, both types of vehicle are granted with 0% duty rate under the benefit of the ASEAN Trade-in Goods Agreement (also known as ATIGA) and the ASEAN-Australia-New Zealand free trade agreement. Importers from countries that are exempt from safeguard measures must present a Certificate of Origin to the Bureau of Customs during clearance processing to avoid safeguard duty. For countries affected by the safeguard measure, a Certificate of Origin can still be of value to bring down import duty and ease out cost.