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An Exporter’s Guide to Shipping to the Philippines

Philippines national flag

It’s a big world out there. For export businesses, there are many markets to explore—and the bustling island nation of the Philippines is certainly one of them. Here are some key things you need to know about shipping to the Philippines.

Market Opportunities

The Philippines is an archipelago of more than 7,000 islands located in Southeast Asia, with a population approaching 110 million and growing fast.

With a long-established Filipino community in the United States, the trading relationship between the two nations goes back more than a century and remains healthy to this day.

  • U.S. goods exports to the Philippines grew by 50% during the 2010s, reaching $8.6 billion in 2019.
  • Agricultural products and electrical machinery regularly top the list of most imported items from the United States.

And the country’s economy continues to develop.

“In the past five years, the Philippines has become a market to watch,” says Marianne Mendoza, UPS Marketing Manager. “With a rising middle class, a young English-speaking workforce, and a long-term development plan aimed at improving quality of life for all Filipinos, the Philippines has built a foundation for growth that will bolster consumer spending in the coming years.”

Exporting Basics

Research is key to launching a successful export business. First, determine whether your product is a good fit for the Philippine market. What changes might you have to make for your product to stand out? 

Consider the geographical aspect too. “Are you looking at selling in Metro Manila or targeting other growing cities like Cebu and Davao?” asks Mendoza. “Do you have a clear picture of the customer in your target Philippine location? What are the marketing and distribution channels to reach your customers there?”

Understanding HS Codes

As with exporting anywhere, getting HS codes right is an important part of shipping into the Philippines. Every conceivable product has an 8- or 10-digit tariff number, better known as an HS code, drawn from the international Harmonized System (HS).

“This tariff number is the basis for customs officials to determine applicable duties and collect accurate statistics,” Mendoza explains. “It’s important that you provide the correct code to avoid delays in getting your product into the country.”

Navigating De Minimis

The de minimis threshold is the value under which your shipment may be exempt from duties and taxes. For the Philippines, de minimis is set at PHP 10,000.00, or approximately $200 USD (subject to exchange rate changes).

“Under-declaration is illegal and very easy for customs authorities to detect, so it’s important to declare the true value of the goods and pay the applicable duties and taxes if your shipments exceed the threshold.”

Export Documentation

A key piece of customs documentation when shipping to the Philippines is the commercial invoice.

Think of the commercial invoice as the passport for your shipment. It identifies the products being shipped, and is used for import control, valuation, and duties. The document also includes the name and address of the shipper and consignee, the terms of sale (known as Incoterms®), and the HS code, among other details.

“Be specific when describing the product,” Mendoza advises. “It’s not simply enough to label shipments as ‘clothes’ or ‘food.’ At UPS, we regularly experience complications with mislabeled shipments.”

Other export documents you may need to provide when shipping from the United States into the Philippines include:

  • Packing List
  • Bill of Lading
  • Import Permit
  • Customs Import Declaration
  • Certificate of Origin
  • Certificate of Product Registration (from the Philippines’ Food and Drug Administration, if the import contains animals, plants, foodstuff, medicine, or chemicals).

Consult with UPS’s customs experts on the exact documentation you will need to import goods into the Philippines.

Shipping Services

Draw on the depth of UPS’s global network for getting your goods shipped, cleared, and distributed within the Philippines.

Explore a wide range of shipping services for shipping your packages safely and reliably into the Philippines from the United States.

Use UPS’s Calculate Time and Cost tool to research your service options, depending on the nature of your shipment and how quickly it needs to arrive.

Calculating Landed Cost and Terms of Sale

It’s important to understand the landed cost of shipping goods into the Philippines.

The landed cost is the total cost associated with your shipment, including duties, taxes, insurance, and other fees.  The shipper and the receiver must agree in advance which party is responsible for paying what.

Specify the arrangement in the conditions of sale using the internationally recognized system of Incoterms® (International Commercial Terms).

Commons terms include:

  • FOB (Free On Board): The seller bears all the costs and risks, including export clearance, up to the point the goods are loaded aboard the vessel. Once the goods are on board, the buyer bears responsibility.
  • CIF (Cost, Insurance, and Freight): The seller remains responsible for all costs and risks until the goods arrive at the destination port. The seller is required to obtain insurance for the goods while in transit.
  • DDP (Delivered Duty Paid): The seller bears all costs and risks in bringing the goods to the destination, including clearing the goods through customs and paying import duties and taxes.

Customs Clearance

Once your goods have landed in the Philippines, you want them to clear customs as quickly as possible.

The UPS Customs Brokerage office is strategically located at Port of Clark, 45 miles northwest of metro Manila, avoiding some of the congestion typically associated with the capital.

The facility offers fast loading and unloading of cargo container for air shipments, explains Mendoza. “UPS has its own Customs Composite Unit (CCU) Office at Port of Clark, meaning we can do on-the-spot clearance upon an airplane’s arrival.”

To further speed up the release of your shipment, UPS Philippines offers shippers third-party payment of customer taxes and duties. Ask about favorable storage terms to protect against unexpected expense at the port, too.

From strategies around de minimis to options for consolidating shipments with customs clearance in mind, consult with UPS Philippines’ brokerage experts to find the solution that’s right for you.

Commodity Restrictions

Remember to determine whether your product is subject to commodity restrictions or is otherwise regulated as dangerous goods.

For example, gambling devices are prohibited for import into the Philippines, as are guns (including toy guns and replicas), while alcoholic beverages are permitted subject to an International Special Commodities (ISC) contract service.

Check out the UPS country wizard for the latest information on commodity restrictions and other regulations to be aware of when shipping into the Philippines.

Forward Distribution

Once cleared through customs, you want peace of mind your goods will get to where they need to be in the Philippines.

Fortunately, UPS Philippines offers:

  • nationwide coverage supported by 22 weekly flights
  • seven UPS operating facilities
  • more than 100 UPS Access Point® locations across the archipelago

Export Support 

Getting the right support at the right time can make the difference between commercial success and failure.

Connect with a wide range of trade associations and other industry bodies ready to support your export business. The US-ASEAN business councils, together with the U.S. Chamber of Commerce, are active in promoting trade between the United States and the Philippines. 

The U.S. Small Business Administration (SBA), through its network of Small Business Development Centers (SBDCs), and the U.S. Commercial Service offer assistance with marketing and distribution along with access to export finance. 

Meanwhile, initiatives such as the UPS Women Exporters Program could be just what you’re looking for.

Get Shipping to the Philippines

Shipping overseas needn’t be complicated. Schedule a complimentary consultation with a UPS small business advisor to discuss your exporting plans. Then, get shipping to the Philippines with confidence.

 

 Schedule a Consultation

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