CONDITIONALLY-FREE AND DUTY-EXEMPT IMPORTATIONS

The CMTA introduces modifications to Section 105 of the TCCP, as

amended, on conditionally-free importations (now named conditionally-
free and duty-free importations under Section 800).

One of the more well-known privileges recognized under Section 800 is

the duty and tax-free importation of personal and household effects by
“returning residents” which has been defined as nationals who have
s t a ye d i n a f o r e i g n c o u n t r y f o r a p e r i o d o f a t l e a s t s i x m o n t h s .

The conditions for exemption (aside from the requirements that the same
should neither be of commercial quantity nor intended for barter, sale or
hire) are as follows:

· F o r t h o s e w h o h a v e s t a ye d i n a f o r e i g n c o u n t r y f o r a p e r i o d o f a t l e a s t
1 0 ye a r s , t h e F r e e o n B o a r d ( F o B ) o r F r e e C a r r i e r A r r a n g e m e n t ( F C A )
value shall not exceed P350,000 and that the privilege is not availed of
w i t h i n 1 0 ye a r s p r i o r t o t h e r e t u r n i n g r e s i d e n t ’ s a r r i v a l .

· I f t h e s t a y i s a t l e a s t f i v e ye a r s , t h e F C A o r F O B v a l u e s h a l l n o t e x c e e d
P 2 5 0 , 0 0 0 a n d t h a t t h e p r i v i l e g e i s n o t a v a i l e d o f w i t h i n f i v e ye a r s p r i o r t o
the returning resident’s arrival.

· I f t h e s t a y i s l e s s t h a n f i v e ye a r s , t h e F C A o r F o B v a l u e s h a l l n o t e x c e e d
P150,000 and that the privilege is not availed of within six months prior
to the returning resident’s arrival.

In addition to the above, returning Overseas Filipino Workers (OFWs)

shall have the privilege to bring in tax and duty free home appliances and
other durables (limited to one of every kind) once in a given calendar
y e a r a c c o m p a n yi n g t h e m o n t h e i r r e t u r n o r a r r i v i n g w i t h i n a r e a s o n a b l e
t i m e ( n o t e x c e e d i n g 6 0 d a ys a f t e r e v e r y r e t u r n i n g O F W s r e t u r n ) .

Residents of the Philippines, OFWs or other Filipinos, while residing

abroad or upon their return to the Philipp ines, are also allowed to bring in
o r s e n d t o t h e i r f a m i l i e s o r r e l a t i v e s i n t h e P h i l i p p i n e s “ b a l i k b a ya n
boxes” (containing personal and household effects only) duty and tax -
free, provided that the FCA value shall not exceed P150,000 and the items
are not in commercial quantities or intended for barter, sale or for hire.
T h i s c a n b e a v a i l e d u p t o t h r e e t i m e s i n a c a l e n d a r ye a r .

Any amount in excess of the above threshold values shall, however, be

subject to duties and taxes.

In the third part of this articl e, we shall discuss other changes brought
about by the CMTA, particularly the rules on related -party transactions
and penalties relating to unlawful importation and exportation,
misdeclaration, misclassification and underdeclaration of imported goods.
CHAPTER 1
CONDITIONALLY TAX AND/OR DUTY -EXEMPT IMPORTATION

Section 800. Conditionally Tax and/or Duty -Exempt Importation.— The

f o l l o w i n g g o o d s s h a l l b e e x e m p t f r o m t h e p a ym e n t o f i m p o r t d u t i e s u p o n
comphance with the formalities prescribed in the regulations w hich shall
be promulgated by the Commissioner with the approval of the Secretary of
Finance: Provided, That goods sold, bartered, hired or used for purposes
o t h e r t h a n w h a t t h e y w e r e i n t e n d e d f o r a n d w i t h o u t p r i o r p a ym e n t o f t h e
d u t y, t a x o r o t h e r c h a r g e s w h i c h w o u l d h a v e b e e n d u e a n d p a ya b l e a t t h e
time of entry if the goods had been entered without the benefit of this
section, shall be subject to forfeiture and the importation shall constitute
a fraudulent practice against customs laws: Provided, However, That a
sale pursuant to a judicial order or in liquidation of the estate of a
deceased person shall not be subject to the preceding proviso, without
prejudice to the p a ym e n t of duties, taxes and other
charges; Provided, Further, That the President m a y, upon the
recommendation of the Secretary of Finance, suspend, disallow or
completely withdraw, in whole or in part, any conditionally free
importation under this section:

(a) Aquatic products such as fishes, crustaceans, mollusks, marine

animals, seaweeds, fish oil, roe, caught or gathered by fishing vessels of
P h i l i p p i n e r e g i s t r y; P r o v i d e d , T h a t t h e y a r e i m p o r t e d i n s u c h v e s s e l s o r i n
crafts attached thereto; Provided, However, That they have not been
landed in any foreign territory or, if so landed, that th ey have been landed
solely for transshipment without having been advanced in condition;

(b) Equipment for use in the salvage of vessels or aircrafts, not available
l o c a l l y, u p o n i d e n t i f i c a t i o n a n d t h e g i v i n g o f a s e c u r i t y i n a n a m o u n t
equal to one hundred percent (100%) of the ascertained duties, taxes and
o t h e r c h a r g e s t h e r e o n , c o n d i t i o n e d f o r t h e e x p o r t a t i o n t h e r e o f o r p a ym e n t
of corresponding duties, taxes and other charges within six (6) months
from the date of acceptance of the goods declaration; Provided, That the
B u r e a u m a y e x t e n d t h e t i m e f o r e x p o r t a t i o n o r p a ym e n t o f d u t i e s , t a x e s
and other charges for a term not exceeding six (6) months from the
expiration of the original period;

(c) Cost of repairs, excluding the value of the goods used, made in
foreign countries upon vessels or aircraft documented, registered or
licensed in the Philippines, upon proof satisfactory to the Bureau: (1) that
adequate facilities for such repairs are not afforded in the Philippines; or
(2) that such vessels or aircrafts , while in the regular course of their
v o ya g e o r f l i g h t , w e r e c o m p e l l e d b y s t r e s s o f w e a t h e r o r o t h e r c a s u a l t y t o
p u t i n t o a f o r e i g n p o r t t o m a k e s u c h r e p a i r s i n o r d e r t o s e c u r e t h e s a f e t y,
seaworthiness, or airworthiness of the vessels or aircrafts to ena ble them
to reach their port of destination;

(d) Goods brought into the Philippines for repair, processing or

reconditioning to be reexported upon completion of the repair, processing
or reconditioning: Provided, That the Bureau shall require security equa l
to one hundred percent (100%) of the duties, taxes and other charges
t h e r e o n , c o n d i t i o n e d f o r t h e e x p o r t a t i o n t h e r e o f o r p a ym e n t o f t h e
corresponding duties, taxes and other charges within six (6) months from
the date of acceptance of the goods declarati on;

(e) Medals, badges, cups, and other small goods bestowed as trophies or
prizes, or those received or accepted as honorary distinction;

(f) Personal and household effects belonging to returning residents

i n c l u d i n g h o u s e h o l d a p p l i a n c e s , j e w e l r y, p r e c i o u s s t o n e s , a n d o t h e r g o o d s
of luxury which were formally declared and listed before departure and
identified under oath before the District Collector when exported from the
Philippines by such returning residents upon their departure therefrom or
during their stay abroad; personal and household effects including
wearing apparel, goods of personal adornment, toilet goods, instruments
related to one's profession and analogous personal or household effects,
excluding luxury items, vehicles, watercrafts, aircraft s and animals
purchased in foreign countries by residents of the Philippines which were
n e c e s s a r y, a p p r o p r i a t e , a n d n o r m a l l y u s e d f o r t h e i r c o m f o r t a n d
c o n v e n i e n c e d u r i n g t h e i r s t a y a b r o a d , a c c o m p a n yi n g t h e m o n t h e i r r e t u r n ,
or arriving within a reasonable time which, barring unforeseen and
f o r t u i t o u s e v e n t s , i n n o c a s e s h a l l e x c e e d s i x t y ( 6 0 ) d a ys a f t e r t h e o w n e r ' s
return.

For purposes of this section, the phrase “returning residents” shall refer
t o n a t i o n a l s w h o h a v e s t a ye d i n a f o r e i g n c o u n t r y f o r a p e r i o d o f a t l e a s t
six (6) months. Returning residents shall have tax and duty exemption on
personal and household effects: Provided, That:

(1) It shall not be in commercial quantities;

(2) It is not intended for barter, sale or for hire; and

(3) Limited to the FCA or FOB value of:

(i) Three hundred fifty thousand pesos (₱350,000.00) for those who have
s t a ye d i n a f o r e i g n c o u n t r y f o r a t l e a s t t e n ( 1 0 ) ye a r s a n d h a v e n o t a v a i l e d
o f t h i s p r i v i l e g e w i t h i n t e n ( 1 0 ) ye a r s p r i o r t o r e t u r n i n g r e s i d e n t ' s a r r i v a l ;
(ii) Two hundred fifty thousand pesos (₱250,000.00) for those who have
s t a ye d i n a f o r e i g n c o u n t r y f o r a p e r i o d o f a t l e a s t f i v e ( 5 ) b u t n o t m o r e
t h a n t e n ( 1 0 ) ye a r s a n d h a v e n o t a v a i l e d o f t h i s p r i v i l e g e w i t h i n f i v e ( 5 )
years prior to returning resident's ar rival; or

(iii) One hundred fifty thousand pesos (₱150,000.00) for those who have
s t a ye d i n a f o r e i g n c o u n t r y f o r a p e r i o d o f l e s s t h a n f i v e ( 5 ) ye a r s a n d
have not availed of this privilege within six (6) months prior to returning
resident's arrival.

Any amount in excess of the above -stated threshold shall be subject to the
corresponding duties and taxes under this Act.

E v e r y t h r e e ( 3 ) ye a r s a f t e r t h e e f f e c t i v i t y o f t h i s A c t , t h e S e c r e t a r y o f
Finance shall adjust the amount herein stated to its present valu e using
the CPI as published by the PSA.

In addition to the privileges granted under the immediatel y preceding

paragraph, returning Overseas Filipino Workers (OPWs) shall have the
privilege to bring in, tax and duty-free, home appliances and other
d u r a b l e s , l i m i t e d t o o n e o f e v e r y k i n d o n c e i n a g i v e n c a l e n d a r ye a r
a c c o m p a n yi n g t h e m o n t h e i r r e t u r n , o r a r r i v i n g w i t h i n a r e a s o n a b l e t i m e
which, barring unforeseen and fortuitous events, in no case shall exceed
s i x t y ( 6 0 ) d a ys a f t e r e v e r y r e t u r n i n g O F W ' s r e t u r n u p o n p r e s e n t a t i o n o f
t h e i r o r i g i n a l p a s s p o r t a t t h e p o r t o f e n t r y: P r o v i d e d , T h a t a n y a m o u n t i n
excess of FCA value of one hundred fifty thousand pesos (₱150,000.00)
for personal and household effects or of the number of duty -free
appliances as provided for under this section, shall be subject to the
corresponding taxes and duties; Provided, Further, That every three (3)
years after the effectivity of this Act, the Secretary of Finance shall
adjust the amount herein stated to its present value using the C PI as
published by the PSA;

(g) Residents of the Philippines, OPWs or other Filipinos while residing

abroad or upon their return to the Philippines shall be allowed to bring in
o r s e n d t o t h e i r f a m i l i e s o r r e l a t i v e s i n t h e P h i l i p p i n e s b a l i k b a ya n b o x e s
which shall be exempt from applicable duties and taxes imposed under the
N I R C o f 1 9 9 7 , a s a m e n d e d : P r o v i d e d , T h a t b a l i k b a ya n b o x e s s h a l l c o n t a i n
personal and household effects only and shall neither be in commercial
quantities nor intended for barter, sale or for hire and that the FCA value
of which shall not exceed one hundred fifty thousand pesos
( ₱ 1 5 0 , 0 0 0 . 0 0 ) ; P r o v i d e d , F u r t h e r , T h a t e v e r y t h r e e ( 3 ) ye a r s a f t e r t h e
effectivity of this Act, the Secretary of Finance shall adjust the amount
herein stated to its present value using the CPI as published by the
PSA; Provided, Finally, That residents of the Philippines, OFWs or other
Filipinos can only avail of this privilege up to three (3) times in a
c a l e n d a r ye a r . A n y a m o u n t i n e x c e s s o f t h e a l l o w a b l e n o n - d u t i a b l e v a l u e
shall be subject to the applicable duties and taxes;

(1) For purposes of this Act, OFWs referto Holders of valid passports
duly issued by the Department of Foreign Affairs (DFA) and certified by
t h e D e p a r t m e n t o f L a b o r a n d E m p l o ym e n t ( D O L E ) o r t h e P h i l i p p i n e
O v e r s e a s E m p l o ym e n t A d m i n i s t r a t i o n ( P O E A ) f o r o v e r s e a s e m p l o ym e n t
purposes. They cover all Filipinos, working in a foreign country under
e m p l o ym e n t c o n t r a c t s , r e g a r d l e s s o f t h e i r p r o f e s s i o n s , s k i l l s o r
e m p l o ym e n t s t a t u s i n a f o r e i g n c o u n t r y; a n d ( 2 ) C a l e n d a r Y e a r r e f e r s t o
the period from January 1 to December 31.

(h) Wearing apparel, goods of personal adornment, toilet goods, portable

tools and instruments, theatrical costumes and similar effects
a c c o m p a n yi n g t r a v e l e r s , o r t o u r i s t s , o r a r r i v i n g w i t h i n a r e a s o n a b l e t i m e
before or after their arrival in the Philippines, which are necessary and
appropriate for the wear and use of such persons according to the nature
o f t h e j o u r n e y, t h e i r c o m f o r t a n d c o n v e n i e n c e ; P r o v i d e d , T h a t t h i s
exemption shall not apply to goods intended for other persons or for
barter, sale or hire: Provided, However, That the Bureau may require
either a written commitment or a security in an amount equal to one
hundred percent (100%) of the ascertained duties, taxes and other c harges
t h e r e o n , c o n d i t i o n e d f o r t h e e x p o r t a t i o n t h e r e o f o r p a ym e n t o f t h e
corresponding duties, taxes and other charges within three (3) months
from the date of acceptance of the goods declaration: Provided, Further,
T h a t t h e B u r e a u m a y e x t e n d t h e t i m e f o r e x p o r t a t i o n o r p a ym e n t o f d u t i e s ,
taxes and other charges for a term not exceeding three (3) months from
the expiration of the original period.

Personal and household effects and vehicles belonging to foreign

c o n s u l t a n t s a n d e x p e r t s h i r e d b y, o r r e n d e r i n g s e r v i c e t o , t h e g o v e r n m e n t ,
a n d t h e i r s t a f f o r p e r s o n n e l a n d f a m i l i e s a c c o m p a n yi n g t h e m o r a r r i v i n g
within a reasonable time before or after their arrival in the Philippines, in
quantities and of the kind necessary and suitable to the profession, rank
or position of the person importing said items, for their own use and not
for barter, sale or hire: Provided, That the Bureau may require either a
written commitment or a security in an amount equal to one hundred
percent (100%) of the ascertained duties, tax es and other charges thereon,
upon the goods classified under this subsection; conditioned for the
e x p o r t a t i o n t h e r e o f o r p a ym e n t o f t h e c o r r e s p o n d i n g d u t i e s , t a x e s a n d
other charges within three (3) months after the expiration of their term or
contract; Provided, However, That the Bureau may extend the time for
exportation or payment of duties, taxes and other charges for a term not
exceeding three (3) months from the expiration of the original period;
(i) Professional instruments and implements, tools of trade, occupation or
e m p l o ym e n t , w e a r i n g a p p a r e l , d o m e s t i c a n i m a l s , a n d p e r s o n a l a n d
household effects belonging to persons coming to settle in the Philippines
or Filipinos or their families and descendants who are now residents or
citizens of other countr ies, such parties hereinafter referred to as
overseas Filipinos, in quantities and of the class suitable to the
profession, rank or position of the persons importing said items, for their
o w n u s e a n d n o t f o r b a r t e r o r s a l e , a c c o m p a n yi n g s u c h p e r s o n s , o r
a r r i v i n g w i t h i n a r e a s o n a b l e t i m e : P r o v i d e d , T h a t t h e B u r e a u m a y, u p o n
the production of satisfactory evidence that such persons are actually
coming to settle in the Philippines and that the goods are brought from
t h e i r f o r m e r p l a c e o f a b o d e , e x e m p t s u c h g o o d s f r o m t h e p a ym e n t o f
duties and taxes; Provided, Further, That vehicles, vessels, aircrafts,
machineries and other similar goods for use in manufacture, shall not fall
within this classification and shall therefore be subject to duties, taxes
and other charges;

(j) Goods used exclusively for public entertainment, and for display in
public expositions, or for exhibition or competition for prizes, and
devices for projecting pictures and parts and appurtenances thereof, upon
identification, examination, and appraisal and the giving of a security in
an amount equal to one hundred percent (100%) of the ascertained duties,
taxes and other charges thereon, conditione d for exportation thereof or
p a ym e n t o f t h e c o r r e s p o n d i n g d u t i e s , t a x e s a n d o t h e r c h a r g e s w i t h i n t h r e e
(3) months from the date of acceptance of the goods
declaration: Provided, That the Bureau may extend the time for
exportation or payment of duties, taxes and other charges for a term not
exceeding three (3) months from the expiration of the original period; and
technical and scientific films when imported by technical, cultural and
scientific institutions, and not to be exhibited for
profit: Provided, Further, That if any of the films is exhibited for profit,
the proceeds therefrom, shall be subject to confiscation, in addition to the
penalty providedamder this Act;

(k) Goods brought by foreign film producers directly and exclusively used
for making or recording motion picture films on location in the
Philippines, upon their identification, examination and appraisal and the
giving of a security in an amount equal to one hundred percent (100%) of
the ascertained duties, taxes and other charges thereon, conditioned for
e x p o r t a t i o n t h e r e o f o r p a ym e n t o f t h e c o r r e s p o n d i n g d u t i e s , t a x e s a n d
other charges within three (3) months from the date of acceptance of the
goods declaration, unless extended by the District Collector for another
three (3) months; photographic and cinematographic films,
underdeveloped, exposed outside the Philippines b y resident Filipino
citizens or by producing companies of Philippine registry where the
p r i n c i p a l a c t o r s a n d a r t i s t s e m p l o ye d f o r t h e p r o d u c t i o n a r e F i l i p i n o s ,
upon affidavit by the importer and identification that such exposed films
are the same films previously exported from the Philippines. As used in
this paragraph, the terms “actors” and “artists” include the persons
operating the photographic camera or other photographic and sound
recording apparatus by which the film is made;

(l) Importations for the official use of foreign embassies, legations and
other agencies of foreign governments: Provided, That those foreign
countries accord like privileges to corresponding agencies of the
Philippines. Goods imported for the personal or family use of members
and attaches of foreign embassies, legations, consular officers and other
representatives of foreign governments; Provided, However, That such
privilege shall be accorded under special agreements between the
Philippines and the countries which they represent : Provided, Further,
That the privilege may be granted only upon specific instructions of the
Secretary of Finance pursuant to an official request of the DFA on behalf
of members or attaches of foreign embassies, legations, consular officers
and other representatives of foreign governments;

(m) Imported goods donated to or, for the account of the Philippine
government or any duly registered relief organization, not operated for
profit, for free distribution among the n e e d y, u p o n c e r t i f i c a t i o n b y
theDSWD or the Department of Education (DepED), or the Department of
Health (DOH), as the case may be;

(n) Containers, holders and other similar receptacles of any material

including kraft paper bags for locally manufactured cement for export,
including corrugated boxes for bananas, mangoes, pineapples and other
fresh fruits for export, except other containers made of paper, paperboard
and textile fabrics, which are of such character as to be readily
identifiable and/or reusable for shipment or transportation of goods shall
be delivered to the importer thereof upon identification, examination and
appraisal and the giving of a security in an amount equal to one hundred
percent (100%) of the ascertained duties, taxes and other charges thereon,
within six (6) months from the date of acceptance of the goods
declaration;

(o) Supplies which are necessary for the reasonable requirements of the
v e s s e l o r a i r c r a f t i n i t s v o ya g e o r f l i g h t o u t s i d e t h e P h i l i p p i n e s , i n c l u d i n g
goods transferred from a bonded warehouse in any Customs District to
any vessel or aircraft engagedin foreign trade, for use or consumption of
the passengers or its crew on board such vessel or aircraft as sea or air
stores; or goods purchased abroad for sale on board a vessel or aircraft as
saloon stores or air store supplies; Provided, That any surplus or excess
of such vessel or aircraft supplies arriving from foreign ports or airports
shall be dutiable;
(₱) Goods and salvage from vessels recovered after a period of two (2)
years from the date of filing the ma rine protest or the time when the
vessel was wrecked or abandoned, or parts of a foreign vessel or its
equipment, wrecked or abandoned in Philippine waters or
elsewhere: Provided, That goods and salvage recovered within the said
period of two (2) years sha ll be dutiable;

(q) Coffins or urns containing human remains, bones or ashes, used

personal and household effects (not merchandise) of the deceased person,
except vehicles, the FCA value of which does not exceed one hundred
fifty thousand pesos (₱150,000.0 0), upon identification as such: Provided,
T h a t e v e r y t h r e e ( 3 ) ye a r s a f t e r t h e e f f e c t i v i t y o f t h i s A c t , t h e v a l u e
herein stated shall be adjusted to its present value using the CPI as
published by the PSA;

(r) Samples of the kind, in such quantity and of such dimension or

construction as to render them unsaleable or of no commercial value;
models not adapted for practical use; and samples of medicines, properly
marked “sample-sale punishable by law”, for the purpose of introducing
new goods in the Philippine market and imported only once in a quantity
sufficient for such purpose by a person duly registered and identified to
be engaged in that trade: Provided, That importations under this
subsection shall be previously authorized by the Secretary of
Finance: Provided, However, That importation of sample medicines shall
have been previously authorized by the Secretary of Health, and that such
samples are new medicines not available in the
Philippines: Provided, Further, That samples not previously authorized o r
properly marked in accordance with this section shall be levied the
c o r r e s p o n d i n g t a r i f f d u t y.

Commercial samples, except those that are not readily and easily
identifiable as in the case of precious and semi -precious stones, cut or
uncut, and jewelry set with precious or semi -precious stones, the value of
any single importation of which does not exceed FCA value of fifty
thousand pesos (₱50,000.00) upon the giving of a security in an amount
equal to the ascertained duties, taxes and other charges thereon ,
conditioned for the exportation of said samples within three (3) months
from the date of the acceptance of the goods declaration or in default
thereof, the payment of the corresponding duties, taxes and other
charges: Provided, That if the FCA value of a ny single consignment of
such commercial samples exceeds fifty thousand pesos (₱50,000.00), the
importer thereof may select any portion of the same not exceeding the
FCA value of fifty thousand pesos (₱50,000,00) for entry under the
provision of this subse ction, and the excess of the consignment may be
entered in bond, or for consumption, as the importer may
e l e c t : P r o v i d e d , F u r t h e r , T h a t e v e r y t h r e e ( 3 ) ye a r s a f t e r t h e e f f e c t i v i t y
of this Act, the Secretary of Finance shall adjust the amount herein stated
to its present value using the CPI as published by the PSA.

(s) Animals, except race horses, and plants for scientific, experimental
propagation or breeding, andfor other botanical, zoological and national
defense purposes: Provided, That no live trees, sh oots, plants, moss and
bulbs, tubers and seeds for propagation purposes may be imported under
this section, except by order of the government or other duly authorized
institutions; Provided, However, That the free entry of animals for
breeding purposes shall be restricted to animals of recognized breed, duly
registered in the record or registry established for that breed, and
certified as such by the Bureau of Animal Industry
(BAI): Provided, Further , That the certification of such record, and
pedigree of such animal duly authenticated by the proper custodian of
s u c h r e c o r d o r r e g i s t r y, s h a l l b e s u b m i t t e d t o t h e D i s t r i c t C o l l e c t o r ,
together with the affidavit of the owner or importer that such animal is
the animal described in said certificate of record and
pedigree: Provided, Finally, That the animals and plants are certified by
the NEDA as necessary for economic development;

(t) Economic, technical, vocational, scientific, philosophical, historical

and cultural books or publications, and religious books lik e Bibles,
m i s s a l s , p r a ye r b o o k s , t h e K o r a n , A h a d i t h a n d o t h e r r e l i g i o u s b o o k s o f
s i m i l a r n a t u r e a n d e x t r a c t s t h e r e f r o m , h ym n a l a n d h y m n s f o r r e l i g i o u s
uses; Provided, That those which may have already been imported but are
yet to be released by the Bureau at the effectivity of this Act may still
enjoy the privilege herein provided upon certification by the DepED that
such imported books and/or publications are for economic, technical,
vocational, scientific, philosophical, historical or cultural purposes or
that the same are educational, scientific or cultural materials covere d by
the International Agreement on Importation of Educational Scientific and
Cultural Materials (XAESCM) signed by the President of the Philippines
on August 2, 1952, or other agreeme nts binding upon the Philippines.
Educational, scientific and cultural materials covered by international
agreements or commitments binding upon the Philippine government so
certified by the DepED.

(u) Philippine goods previously exported from the Philippi nes and
returned without having been advanced in value, or improved in condition
by any process of manufacturing or other means, and upon which no
drawback or bounty has been allowed, including instruments and
implements, tools of trade, machinery and equi pment, used abroad by
Filipino citizens in the pursuit of their business, occupation or
profession; and foreign goods previously imported when returned after
haiffif been exported and loaned for use temporarily abroad solely for
exhibition, testing and exp erimentation, for scientific or educational
purposes; and foreign containers previously imported which have been
used in packing exported Philippine goods and returned empty if imported
by or for the account of the person or institution who exported them f rom
the Philippines and not for sale, barter or hire subject to
identification: Provided, That Philippine goods falling under this
subsection upon which drawback or bounty have been allowed shall, upon
reimportation thereof, be subject to a duty under this subsection equal to
the amount of such drawback or bounty;

( v ) A i r c r a f t , e q u i p m e n t a n d m a c h i n e r y, s p a r e p a r t s , c o m m i s s a r y a n d
catering supplies, aviation gas, fuel and oil, whether crude or refined
except when directly or indirectly used for domestic oper ations, and such
other goods or supplies imported by and for the use of scheduled airlines
operating under congressional franchise: Provided, That such goods or
s u p p l i e s a r e n o t l o c a l l y a v a i l a b l e i n r e a s o n a b l e q u a n t i t y, q u a l i t y a n d p r i c e
and are necessary or incidental to the proper operation of the scheduled
airline importing the same;

(w) Machineries, equipment, tools for production, plans to convert

mineral ores into saleable form, spare parts, supplies, materials,
accessories, explosives, chemicals, and transportation and
communications facilities imported by and for the use of new mines and
old mines which resume operations, when certified to as such by the
Secretary of the Department of Environment and Natural Eesources
(DENE), upon the recommendation of the Director of Mines and
G e o s c i e n c e s B u r e a u , f o r a p e r i o d e n d i n g f i v e ( 5 ) ye a r s f r o m t h e f i r s t d a t e
of actual commercial production of saleable mineral products: Provided,
T h a t s u c h g o o d s a r e n o t l o c a l l y a v a i l a b l e i n r e a s o n a b l e q u a n t i t y, q u a l i t y
and price and are necessary or incidental in the proper operation of the
mine; and aircrafts imported by agro -industrial companies to be used by
them in their agriculture and industrial operations or activities, spare
parts and accessories thereof, when certifie d to as such by the Secretary
of the Department of Agriculture (DA) or the Secretary of the Department
of Trade and Industry (DT I), as the case may be;

(x) Spare parts of vessels or aircraft of foreign registry engaged in

foreign trade when brought into th e Philippines exclusively as
replacements or for the emergency repair thereof, upon proof satisfactory
to the District Collector that such spare parts shaft he utilized to secure
t h e s a f e t y, s e a w o r t h i n e s s o r a i r w o r t h i n e s s o f t h e v e s s e l o r a i r c r a f t , t o
e n a b l e i t t o c o n t i n u e i t s v o ya g e o r f l i g h t ;

( y) G o o d s e x p o r t e d f r o m t h e P h i l i p p i n e s f o r r e p a i r , p r o c e s s i n g o r
reconditioning without having been substantially advanced in value, and
subsequently reimported in its original form and in the same
state: Provided, That in case the reimported goods advanced in value,
whether or not in their original state, the value added shall be subject to
the applicable duty rate of the tariff heading of the reimported goods; and

(z) Trailer chassis when imported by shipping com panies for their
exclusive use in handling containerized cargo, upon posting a security in
an amount equal to one hundred percent (100%) of the ascertained duties,
t a x e s a n d o t h e r c h a r g e s d u e t h e r e o n , t o c o v e r a p e r i o d o f o n e ( 1 ) ye a r f r o m
t h e d a t e o f a c c e p t a n c e o f t h e e n t r y, w h i c h p e r i o d , f o r m e r i t o r i o u s r e a s o n s ,
m a y b e e x t e n d e d b y t h e C o m m i s s i o n e r f r o m ye a r t o ye a r , s u b j e c t t o t h e
following conditions:

(1) That they shall be properl y identified and registered with the Land
Transportation Office (LTO);

(2) That they shall be subject to customs supervision fee to be fixed by

the District Collector and subject to the approval of the Commissioner;

(3) That they shall be deposited in the customs territory when not in use;
and

(4) That upon the expiration of the period prescribed above, duties and
taxes shall be paid unless otherwise reexported.

( a a ) A n y o f f i c e r o r e m p l o ye e o f t h e D E A , i n c l u d i n g a n y a t t a c h e , c i v i l o r
military or member of the staff assigned to a Philippine diplomatic
m i s s i o n a b r o a d b y t h e D e p a r t m e n t o r a n y s i m i l a r o f f i c e r o r e m p l o ye e o f
other departments assigned to any Philippine consular office abroad, or
any AFP military personnel accorded assimilated diplomatic rank or on
duty abroad who is returning from a regular assignment abroad, for
reassignment to the home office, or who dies, resigns, or is retired from
the service, after the approval of this Act, shall be exempt from the
p a ym e n t o f a l l d u t i e s a n d t a x e s o n p e r s o n a l a n d h o u s e h o l d e f f e c t s ,
including one (1) motor car which must have been or dered or purchased
prior to the receipt by the mission or consulate of the order of recall, and
which must be registered in the name of the officer or
e m p l o ye e : P r o v i d e d , T h a t t h i s e x e m p t i o n s h a l l a p p l y o n l y t o t h e v a l u e o f
the motor car and to the aggrega te assessed value of the personal and
household effects, the latter not to exceed thirty percent (30%) of the
t o t a l a m o u n t r e c e i v e d b y t h e o f f i c e r o r e m p l o ye e i n s a l a r y a n d a l l o w a n c e s
during the latest assignment abroad, but not to exceed four (4)
years: Provided, However, That this exemption shall not be availed of
m o r e t h a n o n c e e v e r y f o u r ( 4 ) ye a r s : P r o v i d e d , F u r t h e r , T h a t t h e o f f i c e r
o r e m p l o ye e c o n c e r n e d m u s t h a v e s e r v e d a b r o a d f o r n o t l e s s t h a n t w o ( 2 )
years.
The provisions of general and special laws , to the contrary
notwithstanding, including those granting franchises, there shall be no
e x e m p t i o n w h a t s o e v e r f r o m t h e p a ym e n t o f d u t i e s e x c e p t a s p r o v i d e d f o r
in this Act; those granted to government agencies, instrumentalities or
government-owned or -controlled corporations (GOCCs) with existing
contracts, commitments, agreements, or obligations with foreign countries
requiring such exemption; those granted to international institutions,
associations or organizations entitled to exemption pursuant to
agreements or special laws; and those that may be granted by the
President upon prior recommendation of the NEDA in the interest of
national economic development.