Exporters are being urged to fully understand and comply with Rules of Origin (ROO) to ensure their products qualify for zero or lower tariffs under various free trade agreements (FTAs), according to the Department of Trade and Industry.
Kiezel Gendrano, trade-industry development specialist at the Department of Trade and Industry – Bureau of International Trade Relations, emphasized that ROO is critical in determining whether goods are eligible for preferential tariff treatment under FTAs.
“In general, under Philippine FTAs, to qualify as originating, goods must either be wholly obtained or produced in a Party; produced in a Party exclusively from originating materials from one or more Parties; or must have undergone substantial transformation,” she said in a virtual forum organized by the DTI–BITR in collaboration with the Bureau of Customs.
Gendrano explained that wholly obtained goods refer to naturally occurring products or goods made entirely from natural resources within a single FTA member country.
For products classified as “produced entirely,” all materials must originate from one or more FTA Parties. “This means goods may be produced from a combination of wholly obtained materials and those that have undergone substantial transformation,” she added.
To qualify under substantial transformation rules, products must meet criteria such as a change in tariff classification, minimum regional value content, or specific production processes. She noted that the most common threshold in Philippine FTAs is 40 percent regional value content.
“The most common threshold in Philippines’ FTAs is 40 percent, meaning a good must have a regional value content of not less than 40 percent,” Gendrano said.
She also highlighted the accumulation provision, which allows exporters to use originating materials from other FTA Parties, strengthening regional value chains.
As an example, she cited the Regional Comprehensive Economic Partnership (RCEP), an Regional Comprehensive Economic Partnership, which allows broader cumulation covering key Philippine import sources such as ASEAN members and China.
“Exporters that were previously unable to hurdle restrictive rules in other ASEAN Plus One FTAs may now qualify for preferential tariff rates in RCEP using the cumulation provision,” she said.
Gendrano also outlined other ROO-related rules affecting origin status, including minimal operations, direct consignment, treatment of accessories and packaging, de minimis provisions, fungibility rules, and indirect materials.
She stressed that exporters must secure a Proof of Origin to avail of FTA benefits. Depending on the agreement, this may be in the form of a Certificate of Origin or an Origin Declaration.
For the Philippines, the Bureau of Customs is the issuing authority.
Under most FTAs, including ASEAN Trade in Goods Agreement (ATIGA), PH-EFTA, and RCEP, exporters may use Origin Declarations, either through registration as approved exporters or via self-declaration, subject to compliance with minimum data requirements.
“You just need to apply to the BOC to be an approved exporter or registered exporter, and once approved, you can self-declare your goods provided your Origin Declaration contains all minimum data requirements,” she said.
She added that exporters may also opt for self-declaration without prior registration, depending on the FTA provisions.
Gendrano advised exporters to follow key steps in utilizing FTAs: identify product classification, check tariff eligibility, determine applicable ROO requirements, review relevant rules, secure the appropriate proof of origin, and submit documentation to buyers to claim preferential tariffs.