EXECUTIVE ORDER NO. 198 - MODIFYING THE RATES OF DUTY ON CERTAIN IMPORTED ARTICLES AS PROVIDED UNDER THE TARIFF AND CUSTOMS CODE OF 1978, AS AMENDED, IN ORDER TO IMPLEMENT THE PREFERENTIAL TARIFF RATES ON CERTAIN PRODUCTS UNDER THE ASEAN INDUSTRIAL COOPERATION (AICO) SCHEME

WHEREAS, the Philippines is a Contracting Party to the Basic Agreement on the AICO Scheme signed in Singapore on 27 April 1996;

WHEREAS, the AICO Scheme seeks to improve the competitive position of ASEAN companies in the global and ASEAN markets by providing the means to apply the principles of economies of scale and scope in the manufacturing process, supported by preferential import duties to enhance across ASEAN border transactions;

WHEREAS, the Philippines is a participating country in the approved AICO Schemes of Honda Cars Phils. Inc. (HCPI) and Toyota Motor Philippines, Corp. (TMPC) along with Indonesia and Malaysia;

WHEREAS, under the Honda AICO Arrangement, it was agreed that the Philippines (Honda Cars Phils., Inc.) will import various component parts from Indonesia (P.T. Honda Prospect Motor) and Malaysia (Honda Autoparts Manufacturing (M) Sdn. Bhd.) for the original equipment manufacture (OEM) of Honda models Civic, City and Accord passenger cars. In exchange, Indonesia (P.T. Honda Prospect Motor) will import certain automotive component parts from the Philippines (Honda Cars Phils., Inc.) for the OEM of Honda models Civic, City and Accord passenger cars;

WHEREAS, under the Toyota AICO Arrangement, the Philippines (Toyota Motor Philippines Corp.) will import from Malaysia (T & K Autoparts Sdn. Bhd.) for the original equipment manufacture (OEM) of Toyota Corolla passenger cars and TUV light commercial vehicles for the transport of persons and goods.

WHEREAS, AICO Certificates of Eligibility Nos. Honda/1998/3(A) and Honda/1999/5 were issued on 22 June and 1 July 1999, respectively in favor of the participating companies in the Honda AICO Arrangement; AICO Certificate of Eligibility No. Toyota/1998/3(A) was issued on 30 June 1999 in favor of the participating companies in the Toyota AICO Arrangement.

WHEREAS, in consonance with Articles 5 and 7 of the Basic Agreement on the AICO Scheme, participating companies in the approved Honda Arrangement shall qualify for 0-5% preferential tariff rate to be extended by the Philippines, Indonesia and Malaysia as participating countries, effective within 45 days from the date of issuance of the Certificate of Eligibility by the ASEAN Secretariat;  

NOW, THEREFORE, I, JOSEPH EJERCITO ESTRADA, President of the Philippines, pursuant to the powers vested in me under Sec. 402 of the Tariff and Customs Code of 1978, as amended, do hereby order:

Section 1. The articles specifically listed in Annex “A” hereof, as classified under Section 104 of the Tariff and Customs Code of 1978, as amended, shall be accorded the AICO rate of 5% as specified in Column 6 thereof.

Sec. 2. The AICO rates provided in Annex “A” shall be accorded to the AICO entity in Indonesia (P.T. Honda Prospect Motor) effective from 1 July 1999 and to the AICO entity in Malaysia (Honda Autoparts Manufacturing (M) Sdn. Bhd.) effective from 22 June 1999.

Sec. 3. The articles specifically listed in Annex “B” hereof, as classified under Section 104 of the Tariff and Customs Code of 1978, as amended, shall be accorded the AICO rate of 3% and 5% as specified in Column 6 thereof.

Sec. 4. The AICO rates provided in Annex “B” shall be accorded to the AICO entity in Malaysia (T & K Autoparts Sdn. Bhd.) effective from 30 June 1999.  

Sec. 5. In the event that any subsequent changes are made in the basic (MFN) Philippine rate of duty on the articles listed in Annexes “A” and “B” to a rate lower than the AICO rate prescribed in Column 6 thereof, such article shall automatically be accorded the corresponding reduced rate of duty. Effective 1 January 2003, the final CEPT rate on the subject article shall apply.

Sec. 6. Upon the effectivity of this Executive Order, the article specifically listed in the aforesaid Annexes “A” and “B” which are entered or withdrawn from warehouses in the Philippines for consumption shall pay the applicable AICO preferential tariff rate specified under Section 1 hereof, subject to qualification under the Rules of Origin for the CEPT, as evidenced by the Certificate of Origin - Form “D”.

Sec. 7. Any revision/s to the part numbers appearing in Column 4 of Annexes “A” and “B”, shall be communicated immediately to the Bureau of Customs by the Board of Investments within five (5) days after receipt of the official copy of the revised part numbers from the ASEAN Secretariat.

Sec. 8. This Executive Order shall take effect immediately.

DONE in the City of Manila, this 15th day of January, in the year of Our Lord, Two Thousand.  

ANNEX “A”
ARTICLES GRANTED PREFERENTIAL TARIFF UNDER THE APPROVED HONDA AICO SCHEME

SOURCE APPLICABLE AICO
 HS MODEL/ PRODUCT/     PART NO.   COUNTRY PREFERENTIAL
CODE TYPE PART NAME (AICO COMPANY) TARIFF (%)
 (1) (2) (3) (4) (5) (6)

8703.90 10 Honda   Engine parts:    Indonesia 5

Accord   Block Assy CYLN 1110A-PAA-K000 (P.T. Honda Prospect)
Passenger Block Assy CYLN 1110A-PAD-K000 Motor)
Car Cover Comp CYLN Head 12310-PAA-A000
MNFLD Exhaust  18100-PAH-K000

Passenger Block Assy Cylinder     (P.T. Honda Prospect
Car    Motor)

Civic    Face FR Bumper    71101 S04 0000 (Honda Autoparts
Passenger   Protector R FR Bumper 71102 S04 0000 Manufacturing (M)
Car  Protector L FR Bumper 71103 S03 0000 Sdn. Bhd.)

  Face RR Bumper   71501 S04 0000
  Protector R RR Bumper   71502 S04 0000
  Protector L RR Bumper 71503 S04 0000

Accord     Front BPR Raw MTRL 71101-S84-G000-AA (Honda Autoparts
Passenger Face RR Bumper  71501-S84-A000-AA Manufacturing (M)
Car  Cover R INST Side   77210-S84-A000    Sdn. Bhd.)

Cover L INST Side   77215-S84-A000
Duct Assy FR DEF    77460-S84-A000-M1

City Face FR BPR CTR  71101-SX8-T000 (Honda Autoparts
Passenger Face FR BPR CTR    71101-SX8-T100 Manufacturing (M)
Car     Face R, FR Bumper Side 71102-SX8-T000 Sdn. Bhd.)

Face R, FR Bumper Side 71102-SX8-T100
Face L, FR Bumper Side 71103-SX8-T000
Face L, FR Bumper Side 71103-SX8-T100
Face, RR BPR CTR   71501-SX8-T000
Face, RR BPR CTR 71501-SX8-T100
Face R, RR Bumper Side 71502-SX8-T000
Face R, RR Bumper Side 71502-SX8-T100
Face L, RR Bumper Side 71503-SX8-T000
Face L, RR Bumper Side 71503-SX8-T100

Transport (T & K Autoparts
Type   Sdn. Bhd.)
Passenger
Motor Vehicle

Corolla    (T & K Autoparts
Passenger Sdn. Bhd.)
Car

Vehicle   (T & K Autoparts
For the    Sdn. Bhd.)
Transport of
Goods