Roadwork in Manila
 
Bloomberg News
Inflation in the Philippines spiked to a 30-month high in May, approaching the top of the central bank’s target range and raising the odds of further tightening steps ahead.
The consumer price index rose 4.5% on-year in May, its quickest pace since November 2011, on higher prices of food and other commodities, as well as housing. Economists were expecting a reading of 4.2%, while the central bank had forecast a reading between 3.9%-4.7%.
While CPI remains within the bank’s 3.0%-5.0% target range for the year, Bangko Sentral ng Pilipinas Gov. Amando Tetangco Jr. said the data confirm what the central bank has been saying for months: Quick gains in prices are narrowing the room to keep interest rates at record lows.
“We will not hesitate to adjust policy settings should the inflation target be at risk,” Mr. Tetangco said.
The Philippine economy has been among the fastest-growing in Asia, but some worry it’s at risk of overheating.
At its last two meetings, the BSP has raised banks’ reserve requirements by one percentage point each time, seeking to slow money supply that has grown more than 30% from a year earlier in every month since last July.
Mr. Tetangco said the central bank will look for signs that inflation in food and other commodities is driving up prices of other items, and will watch what other central banks in Asia are doing.
The BSP has held its benchmark repurchase rates at record lows of 3.5% for overnight borrowing and 5.5% for overnight lending since October 2012.
Many economists now think the BSP will raise repo rates by one-quarter percentage point at its June 19 meeting, with a similar increase later in the year. That would seek to ensure that inflation next year stays within the 2015 target of 2.0%-4.0%.
Glenn Maguire, ANZ’s chief economist for Asia Pacific, said the BSP’s patience “must be waning” for just tightening liquidity via reserve requirement ratios. That would make adjustments to repo rates or special deposit accounts – a money-market tool the central bank uses to siphon liquidity from the system — more likely.
Possible tightening via special deposit accounts “is now surely in play. The timing of a repo rate hike could now potentially be brought forward,” Mr. Maguire said.
Michael Wan, an economist at Credit Suisse, said the BSP is likely to raise reserve requirements by another full percentage point later this month — to 21% — and predicted a half-percentage-point increase in special deposit account rates in the second half of the year.
The central bank estimates that its two recent increases in banks’ reserve requirements siphoned some $2.7 billion from the system — compared to around $11.4 billion released into the system last year, when the BSP limited access to its special deposit accounts. Another hike in the reserve ratio would siphon off some $1.3 billion of liquidity.
Trinh Nguyen, an economist with HSBC, said it’s almost certain the BSP will have to tighten policy soon “to temper inflationary pressures.” She expects overnight borrowing rates to rise to 4.0% in the second half of the year, and banks’ reserve requirement ratio to rise to 21%.
Comment:
  • 1:01 am June 28, 2014
  • WISEGUY wrote:
The surge in inflation is self inflicted. Requiring new accreditation for all importers or lose of import license has caused many importers to stop all importation until their accreditation is approved. This has resulted in short supply of many items but most prominently in food. The price of garlic is just a reflection of what is too come.
The government blames hoarders and profiteers i.e. business. It should blame itself with misguided and utterly senseless policies!

BIR issues guidelines for importer, broker accreditation

Liza Almonte

THE Bureau of Internal Revenue (BIR) has set the requirements and guidelines for the accreditation of Philippine importers and brokers.

Under Revenue Memorandum Order No. 10-2014, dated February 10 and signed by Internal Revenue commissioner Kim Henares, importers and brokers need to seek an Importer Clearance Certificate (ICC) and Broker Clearance Certificate (BCC) from the BIR as the first stage of accreditation process that will enable them to import and transact business with Customs.
In the second and final stage of accreditation, importers and brokers will present the ICC and BCC to the Bureau of Customs (BOC) to be able to enter the customs premises.
The BOC has yet to issue a Customs Memorandum Order on the rules and regulations covering the second stage.
The accreditation of importers and brokers was imposed by the Department of Finance, the mother agency of BIR and BOC, under Department Order No. 12-2014 as part of the revamp of the customs bureau. The function was previously exercised by the BOC’s Interim Customs Accreditation Unit (ICARE).
The Accounts Receivable Monitoring Division (ARMD) of the BIR will receive all applications and supporting documents required by the BIR, according to the guidelines.
The ARMD will verify the accuracy of documents, determine the applicant’s compliance, find out if the applicant is using the Electronic Filing and Payment System or Inter-Active Forms system of the BIR in filing tax returns and paying taxes and has resolved tax cases; and monitor the accredited importers and brokers.
All applications for accreditations will have to be filed directly with the ARMD with applicants appearing personally at the unit.
Processing of application will take 15 working days. Once approved, the ICC and BCC will be valid for three years, unless revoked or cancelled earlier.
The ARMD will conduct periodic verification of compliance by accredited importers and brokers on a semestral basis or more often if necessary, RMO 10-2014 said.
BIR’s Systems Development Division (SDD) will develop a script for the regular extraction of data from existing BIR information technology systems to facilitate the ARMD’s conduct of the periodic compliance verification and tracking of, among others, data that will be transferred to the Data Warehouse Systems Operations Division (DWSD).
The DWSD will then check and accept the script developed by SDD for the regular extraction of tax compliance data of taxpayers who are applying for accreditation or who have been accredited after complying with the existing issuance on script turnover procedures and requirements.
Requirements under RMO 10-2014 are almost the same as those of the ICARE, such as a mayor’s permit and a certificate of good standing with the BIR.
The accreditation and disaccreditation of importers and customs brokers will be approved by the chief of the ARMD.
Disaccredited importers or brokers can file for a reaccreditation one year after being disaccredited. They can also file for reconsideration with the Internal Revenue commissioner on any decision of the assistant commissioner for Collection Service.
The ICC and BCC may also be cancelled or revoked by the BIR upon discovery of any valid or compelling causes or reasons to do so.
Valid accreditation certificates issued by the BOC’s ICARE unit prior to the order took effect will remain valid until their expiry dates, and must be renewed three months before the expiration.
Pending applications filed with ICARE will be transmitted to the BIR and be prioritized, but will be covered by the new accreditation policies and procedures.
Renewal applications submitted to ICARE that were pending when the DO No 12-2014 was issued will still be processed by the BOC, while applications for renewal will be treated as new applications by the BIR. –– Roumina M. Pablo
February 18, 2014


Customs suspends 115 importers, brokers

 (philstar.com) | Updated March 7, 2014 - 4:26pm
 6  250 googleplus1  5 
MANILA, Philippines - The Bureau of Customs suspended the accreditation 115 of importers and customs brokers who have repeatedly violated Customs policies and procedures in filing import documents as part of continuing efforts to reform the agency.
Seventy (70) companies or entities and 45 customs brokers had their accreditations suspended for non-compliance with the BOC’s policies on disclosure of detailed product descriptions for goods imported—the first time in recent history that a big batch of accredited importers and brokers were sanctioned for non-compliance with this policy.
Customs Commissioner John Sevilla said that the importers and brokers suspended will no longer be allowed to file import entries and will therefore lose the privilege to import goods.
“The importers and brokers we suspended habitually failed to provide detailed information about the goods they imported. Ang hindi paglalahad ng kabuuang detalye ng inangkat na produkto ay limit na palusot para mapababa ang customs duties and taxes nadapatbayaran. Simple lang ang ibigsabihin nito—ito ay mistulang technical smuggling. Hindi na namin papayagan pa ang lantarang pagsuway sa batas dito sa Bureau of Customs.”
In 2013, the Bureau’s Interim Customs Accreditation Registration (ICARE), suspended the accreditation of 26 importers and one broker for violation of customs rules and regulations.
Customs Administrative Order (CAO) No. 8-2007 and Customs Memorandum Order (CMO) 28-2007, which state that the imported articles must be described in sufficient detail for proper valuation and tariff classification. Importers and brokers are therefore responsible for enumerating details such as specific product description; make, model, variant and brand; and retail packaging or stock-keeping unit (SKU) in the import entries filed with the Bureau.
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The suspension of erring importers and brokers comes in the wake of the implementation of Customs Memorandum Order (CMO) 04-2014, issued last February 21, 2014. Section 3.5 of the  CMO states that “the existing accreditation of an importer or customs broker may be suspended, revoked or cancelled” if there are violations of the “Sworn Undertaking to strictly abide with existing rules and regulations on the Statement of Full Description of Imported Articles covered by entry declarations.”
Recommendations for suspension, revocation or cancellation shall be filed with the Legal Service Division of the BOC, subject to the approval of the Deputy Commissioner of the Revenue Collection Monitoring Group.
All suspensions, revocations and cancellation of accreditation, on the other hand, are acted upon by the Account Management Office (AMO).
“Let this be a warning to our stakeholders that we have zero tolerance for wrongdoing. They must do their part in helping reform the Bureau of Customs by complying with the law,” added Sevilla.
Last month, the BOC implemented new rules on the accreditation of importers and customs brokers, requiring applicants to secure clearance first from the Bureau of Internal Revenue (BIR) and get the necessary BIR Importer Clearance Certificate (BIR-ICC) or BIR Broker Clearance Certificate (BIR-BCC).
The new rules emanated from a recent order from the Department of Finance (DO No. 12-2014), as part of a holistic drive to thwart smugglers and are aligned with Revenue Memorandum Order (RMO) No. 10-2014 issued by the BIR which prescribes the guidelines and procedures for the issuance of BIR-ICCs or BIR-BCCs.
Meanwhile, Globe Telecom through its customs broker REQ Brokerage Services filed a motion for reconsideration Friday to lift the suspension order issued by the Bureau of Customs (BOC).
To date, neither Globe nor its broker has received the official order from the BOC pertaining to the suspension.
Atty. Froilan Castelo, Globe General Legal Counsel, clarified that the issue is a misinterpretation of the BOC administrative order that required brokers to describe imports in detail.
“The issue emanates from the limited number of characters (26 characters) provided in the online form that is supposed to describe the goods imported. This is why we always submit supporting documents as separate attachments because it is impossible to put all item descriptions in the online form,” Castelo said.
Castelo also revealed that all importations of telecom equipment, parts and accessories pass through the National Telecommunications Commission (NTC) for the issuance of certificate of import and permit to purchase with supporting documents itemizing all goods to be imported. 
Castelo added that Globe secures the Department of Finance (DOF) Endorsement Duty Free Exemptions under RA 7229 where the supporting documents include the NTC import permit and complete shipping documents detailing the imported items.

DOF easing importer accreditation procedures

by Raymund F. Antonio
April 30, 2014
Importers and customs brokers hurting from stricter accreditation procedures could see some reprieve with the Department of Finance (DOF) moving to extend the deadline for accreditation.
BOC Deputy Commissioner for Assessment and Operations Coordinating Group Agaton Uvero said the DOF is planning to revise Department Order 12-2014 that transferred the accreditation system of the Bureau of Customs (BOC) to the Bureau of Internal Revenue (BIR).
“The deadline is going to be moved. It’s going to be a year round thing with BIR and Customs,” said Uvero.
The DOF might release the amendments to DO No. 012-2014 that will allow importers and brokers leeway to secure accreditation next week, he said.
Under the new rules, applicants seeking to register as importers with the BOC need to pass through stringent verification procedures by the BIR to get the necessary Importer Clearance Certificate (ICC).
Importers were given 90 days to submit their BIR clearance certificate within the date of application. Accreditation will automatically expire upon the lapse of the period.
The many requirements, however, are making it hard for importers to meet the deadline.
Only four importers were able to comply with all the requirements set by the BIR so far. There are 16,000 importers and brokers transacting with the BOC for their shipments.
“The issue for most brokers and importers is the short time for everyone to be accredited,” Uvero said.
BOC Commissioner John Phillip Sevilla earlier confirmed that the new accreditation system at BIR has been marred by complaints from importers.
He said importers are complaining about the “stricter” verification and accreditation procedures in the agency.
The DOF transferred BOC’s accreditation functions to BIR so the agency can use its extensive taxpayer database and information technology system to accredit importer-applicants.


Disaccreditation of importers

SUITS THE C-SUITE By Stephanie Vicente-Nava
First Published in Business World (06/09/2014)
A GREAT deal has been said about the new accreditation process imposed under Department of Finance Department Order (DO) No. 012-2014, dated Feb. 6. It would seem that there is a growing awareness among importers of the two-phase process for accreditation, the documents required to apply for a Bureau of Internal Revenue Importer Clearance Certificate (BIR-ICC) and a Bureau of Customs Importer Accreditation (BoC-IA), as well as the deadline to comply with the new accreditation rules. Most importantly, stakeholders now realize that their respective importer accreditation shall be deemed automatically canceled for failure to comply with the new accreditation rules on or before the scheduled deadlines, which may seriously disrupt business operations and cause large scale revenue loss.
While undergoing this new process, some importers have encountered various issues related to the preparation of the required documents, such as the processing time for securing a Certificate of Good Standing from the Securities and Exchange Commission, certified true copies of the Annual Income Tax Returns from the BIR’s District Offices and a National Bureau Investigation Clearance. Multinational foreign-owned corporations found it difficult to arrange for the personal appearance of their responsible or ranking officers, which is required by the BIR upon filing of the application for a BIR-ICC. Other importers are still coping with the challenges of satisfying the BIR’s criteria for accreditation prescribed under Revenue Memorandum Order (RMO) No. 10-2014, dated Feb. 10.
EXTENSION OF PERIOD TO COMPLY
In order give importers ample time to prepare and comply with the new accreditation requirements, DO No. 033-2014, dated May 21, was issued extending the period to file the proper applications with the BIR and BoC from the original deadline of May 22 to June 30 for importers with valid and existing accreditations.
To implement the above DO, the BoC issued Customs Memorandum Order (CMO) No. 11-2014, dated May 22, which contains a table of deadlines for compliance as follows:
· New applicants and those with I-CARE accreditations that expired before March 1 may apply for a BIR-ICC and BoC-IA any time before transacting with the BoC;
· Importers with I-CARE accreditations expiring between March 1 and May 31 must comply with the new accreditation process by May 31;
· Importers with I-CARE accreditations expiring between June 1 to 30 must comply on or before the expiration date of their existing I-CARE Accreditation; and
· Importers with I-CARE accreditations expiring from July 1 onwards must comply by June 30.
According to the CMO, the BoC will cancel all existing accreditations issued to importers who fail to meet the above deadlines effective July 1, or the date of the expiration of the existing accreditation.
PROVISIONAL BOC ACCREDITATION
The CMO also provides that an importer may secure a provisional or temporary BoC accreditation by submitting either of the following: 1) proof of application for a BIR-ICC consisting of the official receipt and the follow-up stub issued by the BIR Accounts Receivable Monitoring Division (ARMD); or 2) a provisional BIR-ICC, which is valid for a period of three months unless revoked sooner. As of the date of the drafting this article, the BIR has not released guidelines on the issuance of a provisional BIR-ICC.
While most importers are occupied with issues relating to accreditation, it is likewise important to understand the grounds for the disaccreditation of importers and its consequences.
ONE-YEAR BAN ON IMPORTING GOODS
The BIR’s ARMD is tasked with conducting a periodic verification of the compliance of importers issued with BIR-ICCs. In case of any findings of non-compliance with any of the BIR’s accreditation criteria, the ARMD, after due notice to the concerned importer, may cancel and revoke an importer’s existing BIR-ICC. The cancellation or revocation of the BIR-ICC has the effect of also canceling the BoC-IA since the latter is valid only for the same duration of the BIR-ICC. In this case, the concerned importer may file a request for reconsideration with the Assistant Commissioner of the BIR’s Collection Service and the Commissioner of Internal Revenue.
Another option for a disaccredited importer is to file a new application for accreditation with the ARMD when the circumstances that lead to the cancelation or revocation of the BIR-ICC have been rectified. However, the new application for a BIR-ICC may be filed only after the lapse of one year from the effective date of the disaccreditation. This means that the disaccredited importer will not be able to import goods into the Philippines for an entire year, which may cause severe supply shortages, slowdowns and eventually cessation of operations.
Hence, notwithstanding that the BIR-ICC is deemed valid for a period of three years, every importer should regularly perform a tax compliance review to ensure that the criteria for accreditation are continuously satisfied.
AUTOMATIC AUDIT BY THE BIR
The BoC may also suspend or cancel the accreditation of an importer for any inaccuracy or false information submitted in the application for a BoC-IA, non-compliance with the annual reportorial requirements, failure to report fraud upon customs revenue, and any violation in the sworn undertaking to abide by the regulations on the statement of full description of imported articles or the Tariff and Customs Code of the Philippines. In this case, the concerned importer may file for a request for the activation of his previous registration, which will be subject to the approval of the Deputy Commissioner of the Revenue Collection and Monitoring Group of the BoC.
The BoC-Accounts Management Office shall provide the BIR with a list of importers whose accreditations were suspended and canceled, as well as those disqualified for accreditation. The BIR, in turn, will endorse the list to the National Investigation Division for purposes of determining if there is tax fraud or evasion or the Revenue District Office or the Large Taxpayers District Office having jurisdiction over the concerned importer for the purposes of conducting a regular tax audit.
Hence, an importer who is disqualified or disaccredited by the BoC will be subject to an automatic audit by the BIR for potential deficiency internal revenue taxes. Such being the case, it is likewise important for importers to evaluate customs practices and procedures, review compliance with documentation, reportorial and other administrative requirements of the BoC. Doing so will not only to avoid possible exposure to deficiency duties and taxes, but also to ensure the uninterrupted right to import goods into the Philippines and avoid unnecessary disruptions to trade or business.
Stephanie Vicente-Nava is a senior director of SGV & Co.
This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the author and do not necessarily represent the views of SGV & Co.


Importer, broker accreditation extended

Liza Almonte

Long queue of importers and customs brokers trying to beat the accreditation deadline at the Bureau of Internal Revenue. Photo courtesy of the Philippine Exporters Confederation.
The Department of Finance (DOF) has extended the accreditation period for Philippine importers and customs brokers with valid and existing accreditation by another month to July 31 from June 30.
Department Order (DO) 046-2014, dated June 26, 2014 and signed by Finance Secretary Cesar Purisima, said the extension was granted to give all concerned additional time to comply with all documentary requirements.
The order took effect immediately.
Under DO 046-2014, “Failure to file the proper application with the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) by the date stated in the immediately preceding paragraph (July 31), and in the manner prescribed by the pertinent rules, shall result in the automatic cancellation of the existing accreditation, if any, effective 1 August 2014 or the date of expiration as indicated in the original BOC accreditation, whichever is earlier.”
The extension comes amid much complaint over the BIR and BOC’s inability to process the deluge of importer and broker applications. The BIR and BOC are attached agencies of the DOF.
Before the issuance of DO 046-2014, all importers and customs brokers must respectively secure the importer clearance certificate (ICC) and broker clearance certificate from the BIR and another set of accreditation from the BOC by June 30.
Barring so would have meant that importers and customs brokers, one month from the June 30 deadline, would be delisted from BOC Client Profile Registration System. That means their import shipments will not be processed by the BOC.
Brokers’ strike
Some brokers’ groups began a strike on June 26 with the intention to carry the activity through June 30, in protest of the new DOF, BIR and BOC accreditation regulations.
As of press time, the Customs Brokers Council of the Philippines, Professional Customs Brokers Association of the Philippines, Inc (PCBAPI) and Aduana Business Club, Inc have yet to decide on whether to push through with the June 30 strike, according to Rey Soliman, executive vice president of PCBAPI, considering a one-month extension has been issued.
Soliman told PortCalls their groups are not budging from their position calling for the recall of all DOF, BIR and BOC orders on the new accreditation process.
He described the one-month extension of accreditation to July 31 as a “temporary relief… to lessen collection impact” at the BOC.
The groups along with the Chamber of Customs Brokers, Inc. (CCBI) were called to a meeting by Finance Undersecretary Carlo Carag on Friday.
Samson Gabisan, CCBI executive vice president, told PortCalls in a phone interview CCBI members are not joining the brokers’ holiday.
In the Friday meeting with the DOF, Gabisan said CCBI requested the accreditation extension be moved to December 31.
CCBI also asked for the “synchronization” of BIR and BOC requirements for accreditation to avoid redundancies.
Slow application
The importer and customs broker accreditation regulations have sowed confusion in the trading community, with complaints of long queues and ill-informed staff at the BIR and the BOC. There are also reports that the BIR can only accommodate 300 applicants every single day.
According to BOC Deputy Commissioner for Assessment and Operations Coordinating Group Atty Agaton Uvero, there are about 15,000 importers and customs brokers previously accredited by the BOC. All of these have to secure new accreditation from both the BIR and BOC.
As of June 17, Uvero said only 600 applicants have been processed by the BIR (see related story below).
On the other hand, BOC public information and assistance division chief Charo Logarta-Lagamon told PortCalls that as of June 25, the BIR has already denied 7,000 applications.
Request for extension
Even the BOC office that processes applications of importers and customs brokers recommended an extension in accreditation period. On June 20, the Account Management Office (AMO) sent a letter to Customs Commissioner John Phillip Sevilla seeking extension of the accreditation for two months or until August 31, due to clamor from stakeholders.
AMO chief Atty Jemina Sy-Flores noted that as of June 20, only less than 800 importers and brokers have complied with the accreditation.
Moreover, Flores said AMO received letters from stakeholders who fear non-processing of their shipments because the importer/customs broker was not able to comply with the deadline due to lack of requirements.
During a June 17 meeting with AMO officials, the Portusers Confederation said importers and brokers may not be able to comply due to delays in accreditation processing at the BIR.
- June 27, 2014



Importer, broker accreditation extended by another month

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Category: Banking & Finance
27 Jun 2014
    The Department of Finance (DOF) has extended the accreditation period for Philippine importers and customs brokers by another month, to July 31 from June 30.
    Finance Secretary Cesar V. Purisima signed Department Order 046-2014 dated June 26, 2014, giving all concerned additional time to comply with all documentary requirements
    The order took effect immediately, according to a statement released on Friday by the DOF.
    Under DO 046-2014, “Failure to file the proper application with the Bureau of Internal Revenue [BIR] and the Bureau of Customs [BOC] by the date stated in the immediately preceding paragraph [July 31], and in the manner prescribed by the pertinent rules, shall result in the automatic cancellation of the existing accreditation, if any, effective
    on August 1, 2014 or the date of expiration as indicated in the original BOC accreditation, whichever is earlier.” 
    The Philexport News and Features also reported the extension comes amid much complaint over the BIR and BOC’s inability to process the deluge of importer and broker applications. The BIR and BOC are attached agencies of the DOF.
    Under the previous rules, all importers and customs brokers must respectively secure the importer clearance certificate (ICC) and broker clearance certificate from the BIR and another set of accreditation from the BOC by June 30.
    Barring so will mean that importers and customs brokers, one month from the June 30 deadline, will be delisted from BOC Client Profile Registration System. That means their import shipments will not be processed by the BOC.
    A strike by some brokers’ groups is ongoing with the culminating activity scheduled on June 30, in protest of the DOF, the BIR and the BOC accreditation regulations. A DOF official will meet brokers’ groups on Friday to address their concerns.
    The accreditation regulations have sowed confusion in the trading community, with complaints of long queues and ill-informed staff at the BIR and the BOC. There are also reports that the BIR can only accommodate 300 applicants every single day.
    According to Customs Deputy Commissioner for Assessment and Operations Coordinating Group lawyer Agaton Uvero, there are about 15,000 importers and customs brokers previously accredited by the BOC. All of these have to secure new accreditation from both the BIR and the BOC.
    As of June 17, Uvero said only 600 applicants have been processed by the BIR.
    On the other hand, BOC Public Information and Assistance Division Chief Charo Logarta-Lagamon told PortCalls that as of June 25, the BIR has already denied 7,000 applications.
    The Account Management Office (AMO), tasked to process applications of importers and customs brokers at the BOC, on June 20 wrote a letter to Customs Commissioner John P. Sevilla seeking extension of the accreditation for two months or until August 31, due to clamor from stakeholders
    AMO chief, lawyer Jemina Sy-Flores, noted that as of June 20, only less than 800 importers and brokers have complied with the accreditation.
    Moreover, Flores said AMO had received letters from stakeholders who fear non-processing of their shipments because the importer/customs broker was not able to comply with the deadline due to lack of requirements.
    During a meeting on June 17, the Portusers Confederation raised the concern that importers and brokers might not be able to comply due to delays in accreditation processing at the BIR.
    Flores said some have contended that automatic expiry of accreditation after the lapse of the prescribed period “will have an enormous negative impact on their business and the BOC collection.”