The United States tagged the Bureau of Customs (BOC) as among national agencies where corruption is an issue.
The US also tagged as a concern reports of bribery in the judiciary.
“Corruption is a pervasive and longstanding problem in the Philippines. National and local government agencies, particularly the Bureau of Customs, are beset with various corruption issues,” the US Trade Representative office said in its National Trade Estimate report released March 29.
The NTE said reports of corruption and irregularities in customs processing are widespread despite the modernization program of the BOC in 2021.
It said these reports pertain to incidents of undue and costly delays, irregularities in the valuation process, 100 percent inspection and testing of some products, and inconsistent assessment of fees.
The NTE said some US importers still report the BOC continues to use reference prices for the valuation of meat and poultry products even with the implementation in 2020 of the Enhanced Value Reference Information System, a database of information on the value and classification of imports for reference purposes in support of the implementation of the WTO Customs Valuation Agreement.
The report said US importers encounter this issue despite the submission of documentary evidence of payments such as contracts, purchase orders, telegraphic transfers, and letters of credits of these importers.
The NTE also noted foreign and domestic investors have expressed concern about the lack of transparency in judicial and regulatory processes.
It said investors have also raised concerns about courts being influenced by bribery and improperly issuing temporary restraining orders to impede legitimate commerce, the report said.
The USTR views the Sanitary-Phytosanitary Import Clearance (SPSIC) system implemened by the Department of Agriculture as a technical barrier to trade.
Importers are required obtain an import permit and transmit the permit to the exporter prior to shipment of any agricultural product. Each import permit is valid for only one shipment and has a limited validity period of 15 days to 90 days, depending on the commodity.
“Requiring one SPSIC per shipment with a limited validity period adds costs, complicates the timing of exports, and prevents the rerouting to the Philippines of products intended for other markets but not sold there for commercial reasons,” the NTE said.
“The length of validity and issuance appear to be based on the political sensitivity of the products, rather than on sanitary and phytosanitary risk,” it added.
The NTE also cited the existence of technical barriers to trade such as on vehicle standards.
In conjunction with Asean harmonization efforts, the Philippines is working to align domestic motor vehicle standards and regulations with those set under the United Nations Economic Commission for Europe 1958 Agreement. Under the October 2018 United States—Philippines Joint Statement, both governments pledged to cooperate to implement a US work program on automotive standards issues. The US also recognized the Philippines’ commitment to the continued acceptance of vehicles that meet multiple high-standard automotive standards, including US Federal Motor Vehicle Safety Standards.
However, as of Dec. 31, 2023, the Philippines had not yet issued regulations to implement that commitment, the USTR said.
On government procurement, the USTR said the system in the Philippines generally favors Filipino nationals or Filipino-controlled enterprises for procurement contracts.
This has limited the participation of US cloud service providers.
While these providers are active in the Philippine market, they continue to face constraints that limit their participation, particularly in competing for government projects.
On intellectual property, the report said the US continues to have concerns on the Philippines’ limited enforcement activities.
While the Philippines has been out of Watch List of the Special 301 Report since 2014, the report said US stakeholders report issues with online piracy and sales of counterfeit goods, including apparel, shoes, watches, jewelry, perfume, and electronics which led to the continued inclusion of Manila’s Greenhills Shopping Center in the 2023 Review of Notorious Markets for Counterfeiting and Piracy. Other stakeholder concerns include slow prosecution and conviction of cases.
Also on IP, the report said the US will continue to monitor the implementation of new regulations related to geographical indications that entered into force in November 2022, including their potential impact on market access for US products.
