TRADE POLICY REVIEW BODY: REVIEW OF THE PHILIPPINES
TPRB'S EVALUATION Back to top

The Trade Policy Review Body of the World Trade Organization (WTO) concluded its second review of the Philippines' trade policies on 27 and 29 September 1999. The text of the Chairperson's concluding remarks is attached as a summary of the salient points which emerged during the discussion. The review enables the TPRB to conduct a collective examination of the full range of trade policies and practices of each WTO member countries at regular periodic intervals to monitor significant trends and developments which may have an impact on the global trading system.

The review is based on two reports which are prepared respectively by the WTO Secretariat and the government under review and which cover all aspects of the country's trade policies, including its domestic laws and regulations, the institutional framework, bilateral, regional and other preferential agreements, the wider economic needs and the external environment. A record of the discussion and the Chairperson's summing-up together with these two reports will be published in due course as the complete trade policy review of the Philippines will be available from the WTO Secretariat, Centre William Rappard, 154 rue de Lausanne, 1211 Geneva 21.

Since December 1989, the following reports have been completed: Argentina (1992 & 1999), Australia (1989, 1994 & 1998), Austria (1992), Bangladesh (1992), Benin (1997), Bolivia (1993 & 1999), Botswana (1998), Brazil (1992 & 1996), Burkina Faso (1998), Cameroon (1995), Canada (1990, 1992, 1994, 1996 & 1998), Chile (1991 & 1997), Colombia (1990 & 1996), Costa Rica (1995), Côte d'Ivoire (1995), Cyprus (1997), the Czech Republic (1996), the Dominican Republic (1996), Egypt (1992 & 1999), El Salvador (1996), the European Communities (1991, 1993, 1995 & 1997), Fiji (1997), Finland (1992), Ghana (1992), Guinea (1999), Hong Kong (1990, 1994 & 1998), Hungary (1991 & 1998), Iceland (1994), India (1993 & 1998), Indonesia (1991, 1994 & 1998), Israel (1994 & 1999), Jamaica (1998), Japan (1990, 1992, 1995 & 1998), Kenya (1993), Korea, Rep. of (1992 & 1996), Lesotho (1998), Macau (1994), Malaysia (1993 & 1997), Mali (1998), Mauritius (1995), Mexico (1993 & 1997), Morocco (1989 & 1996), New Zealand (1990 & 1996), Namibia (1998), Nigeria (1991 & 1998), Norway (1991 & 1996), Pakistan (1995), Paraguay (1997), Peru (1994), the Philippines (1993 & 1999), Poland (1993), Romania (1992), Senegal (1994), Singapore (1992 & 1996), Slovak Republic (1995), the Solomon Islands (1998), South Africa (1993 & 1998), Sri Lanka(1995), Swaziland (1998), Sweden (1990 & 1994), Switzerland (1991 & 1996), Thailand (1991 & 1995), Togo (1999), Trinidad and Tobago (1998), Tunisia (1994), Turkey (1994 & 1998), the United States (1989, 1992, 1994, 1996 & 1999), Uganda (1995), Uruguay (1992 & 1998), Venezuela (1996), Zambia (1996) and Zimbabwe (1994).

TRADE POLICY REVIEW BODY:   REVIEW OF THE PHILIPPINES
CONCLUDING REMARKS BY THE CHAIRPERSON Back to top

We have had frank and constructive discussions on the Philippines' trade policies and measures, with Members warmly commending the Philippines on the economic reforms undertaken since its previous Review in 1993. The opening of the trade and investment regimes has contributed to a more resilient economy which, in general, had dealt well with the Asian financial crisis and natural disasters. The Philippines thus provides a good example of the advantages of structural reform, particularly trade liberalization, in withstanding external shocks. Continued efforts to enhance the outward orientation of the economy would bring further benefits to Filipino workers and consumers. This is necessary in view of the still low per capita income, and savings capacity in the Philippines and of the on-going efforts to alleviate poverty.

Members were impressed by the decline in protection to producers, including reductions in the average MFN tariff from 26% in 1992 to 10% at present. The Philippines' WTO commitments in services, and the expansion of its tariff bindings as a result of the Uruguay Round had significantly enhanced predictability. Furthermore, most quantitative import restrictions had been abolished. Although the selective tariff increases introduced in 1999 were seen as detracting from the otherwise positive direction of trade policies, Members were reassured by the clear statement from the Filipino representative that those increases were temporary and would be phased out by 1 January 2000. The Philippines was also commended on its goal to attain a generally uniform 5% tariff by 2004.

Members also took note of the Philippines' renewed commitment to comply to the best of its ability with WTO rules: in particular that it would shift by 2000 to the transaction value method for customs valuation, terminate PSI, as well as conform to the provisions of the TRIMs and TRIPS Agreements; in due time, the Philippines would notify the WTO of its new Anti-dumping and Countervailing Duty Laws.

The Philippines shed light on a number of issues raised by Members during the Review, including:

- rationalization of investment incentives;

- export incentives and their WTO consistency;

- liberalization of existing foreign ownership restrictions, including in the banking, telecommunications and retail sectors;

- competition policy and possible adoption of a general competition law;

- relationship between WTO and preferential agreements, particularly AFTA, commitments;

- customs administration (influence of local firms on customs clearance), customs valuation, and trade facilitation;

- expansion of tariff bindings;

- potentially discriminatory excise taxes on distilled spirits, soft drinks and automobiles;

- import restriction on rice, fish products, coal, used cars, colour reproduction machines and antibiotics; and protective measures on food products, automobile parts and vehicles, and steel products;

- alignment to international standards, and SPS measures;

- transparency and efficiency of government procurement practices;

- time frame to eliminate WTO-inconsistent TRIMs;

- current and future intellectual property legislation and its enforcement;

- state trading in grains including rice, and administration of Minimum Access Volumes;

- ratification of the Fourth and Fifth Protocols to the GATS; and

- further liberalization and WTO commitments in transport, telecommunications, financial services and natural persons supplying services.

Members recognized that the Philippines had incurred social and political costs in liberalizing its trade regime, but the stronger multilateral system that this had helped establish had been instrumental in facilitating the flow into the Philippines of foreign investment and goods required to increased domestic competitiveness, and the recent sharp expansion of Philippine exports. The seriousness with which the Philippines itself takes its WTO commitments underlined its call to other Members to do the same. In this respect, the Philippines expressed concern about certain trade-inhibiting measures maintained by some of its trading partners, including the high levels of export subsidies and domestic support measures in agriculture, as well as the application of rules of origin, in textiles and clothing, contingency and SPS measures in steel and processed food, respectively.

In conclusion, Members encouraged the Philippines to continue on its liberalization path and domestic reform process, and welcomed the Philippines' resolve to implement fully its WTO commitments by the multilaterally agreed dates. Members were cognizant of the Philippines' expectation that any new multilateral undertakings would need to be balanced to the benefit of all, and contribute to sustainable development, and looked forward to its active role in the forthcoming multilateral trade negotiations.