Exporting in a Nutshell
by Arlene Eleanor E. Liberal
The manual “Exporting At A Glance, ” published by PhilExport, gives procedural guidelines in exporting.
Upon receiving the confirmation of order, the exporter starts production, or if the exporter is just a trader, he or she starts to purchase goods from the suppliers. The goods are then labeled, packed and marked for shipment.
Export Declaration (ED)
Export Declaration (ED) with Foreign Exchange Proceeds is a form required by the Central Bank (CB) to be filled with an authorized agent bank (AAB) by an exporter who is ready to ship the goods.
Export shipment on no-dollar basis is covered by an ED without foreign exchange proceeds issued by an AAB.
Samples, specimens for promotional and testing purposes, advertising materials bearing the name/trademark of the exporter may be given due course by an AAB without prior CB approval
Commodity clearance/ certificate of exemption
If the products to be exported are listed under Executive Order 1016, the exporter applies for Export Commodity Clearance /Certificate of Exemption from the Government Commodity Office concerned.
The following are some of the products controlled or regulated and the commodity offices handling them: planting materials of abaca and ramie (Fiber Industry Development Authority), all plants and planting materials (Bureau of Plant Industry), aircrafts (Department of Transportation and Communication), bangus fry and “mother” bangus ( Bureau of Fisheries and Aquatic Resources), cement and clinker (Board of Investment), coffee (International Coffee Organization Certifying Agency -DTI), firearms and ammunitions, Philippine National Police-DILG), garments and textile (Garments and Textile Export Board), grains and grains-by product (National Food Authority), lumber, poles, piles, etc. (Bureau of Forest Management) , mature coconut and seedling of coconut (Philippine Coconut Authority), natural fibers (FIDA), oil and petroleum products (Energy Regulatory Board) prawn spawn and fry (BFAR), raw materials for cottage industries (DTI), shells (BFAR), wildlife specie of flora and fauna and processed forest products (Protected Areas and Wildlife Bureau).
Authority to load (A/L)
The exporter proceeds to the Export Division of the Bureau of Customs (BOC) where the authorized officer will approve the A/L found at the back of the ED forms (1 and 3). The ED, the commercial invoice and all other supporting documents will be perforated with an Export Entry Number.
If the goods will be shipped by sea, the exporter pays the arrastre charges to the Arrastre Contractor in the port of loading and the wharfage fees at the Philippine Ports Authority. There are no arrastre charges if exporting is done through the air cargo facility.
Firms registered with the Board of Investment and the Export Processing Zone Authority are exempted from the wharfage fees.
For cargoes loaded in Metro Manila:
Conventional cargoes to be transported by ship, whether in a container van or not, are inspected by Customs Container Control Division (CCCD) and the Pier and Inspection Division (PID) respectively after payment of the wharfage fees and arrastre charges. The offices of CCCD and PID are located in the Port Area.
Cargoes to be transported by air cargo are inspected by the BOC at the NAIA.
There are branches of the same agencies operating in areas such as Cebu and Davao..
Bill of Lading (B/L) and Airway Bill (AWB)
Upon loading, the customs inspector signs the Report of Loading (for sea freight) and Report of Lading (for air freight). The exporter also secures the B/L from the shipping line or the AWB from the airline for the air freight.
Other documents
After loading, the BOC gives the exporter the following documents upon request:
Certificate of Origin, Form A – for export products covered by the Generalized System of Preferences (GSP); or General Certificate of Origin, – for export products not availing of preferences under GSP; or Certificate of Origin, Form C – for export products covered by the ASEAN Preferred Tariff Agreement (ASEAN-PTA).
Certificate of Shipment.
Getting Paid
Payment for exports should be made through banks and this bank is called the authorized agent bank (AAB)..
There are many modes of payment for export.
- Documents against acceptance:
As soon as buyers agree to buy the products, the shipping documents (exporter’s bill of exchange) for the goods are sent to the foreign bank (representing the buyer), thus the buyer is obliged to pay the export shipment.
- Document against payment:
The shipping documents are released to buyer (through his bank) only upon
payment of the shipment thru the AAB.
This is a bill of exchange issued and drawn by a bank abroad upon another bank, in favor of the exporter, which is payable on demand or at some future date and received by the AAB prior to the shipment.
Payment by traveller’s check is applicable only if the shipment is not more than US$ 3,000.
A letter of credit is a written understanding or obligation of a bank, made at the request of the buyer, to honor a seller’s draft or demand for payment up to a stated sum of money within a prescribed time limit and upon compliance with the condition specified therein.
Submission of documents for collection when using the letter of credit
Within 10 days from the shipment date, the exporter must present the following documents to the AAB:
- Letter of Credit or covering draft
- Bill of Lading or Airway Bill.
- Commercial Invoice
- Other documents which may be required like insurance certificate,
Certificate of origin, commodity clearance, etc.
The bank will now credit the exporter’s account either in pesos or foreign currency upon payment by the buyer through the bank.
So now , you can see that exporting is quite complicated in terms of procedures and documentation. However, for those who have found a way to efficiently comply with these requirements, the world market is theirs to conquer.
(For inquiries, please e-mail info.issi@up.edu.ph.)
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