[ GTEB MEMO CIRCULAR NO. 017, S. 2000, November 20, 2000 ]

ALLOCATION OF EXPORT AUTHORIZATION EFFECTIVE QUOTA YEAR 2001



In line with the thrust of transparency, predictability and simplification of our Rules and Policies, the Board in its meeting of November 15, 2000 approved the modifications in the Allocation of Export Authorizations effective Quota Year 2001, detailed in Annex A, as consulted with the Industry Associations.

This circular amends the following provisions in the GTEB Rules:

1. Rule VI Section 4 #1,1A to 1B, #3, and #4 re: Allocation of Export Authorization;

2. Rule VI Section 6 re: Balances on either General and/or Regional Baskets, its treatment;

3. Rule VI Section 7 re: Cap on the Cap.

For information and guidance.

Adopted: 20 Nov. 2000

(SGD.) FELICITAS R. AGONCILLO-REYES
Executive Director

ATTACHMENT: ANNEX A

ALLOCATION OF EXPORT AUTHORIZATION
Effective Quota Year 2001

I.          The Board shall distribute the allocable balance in the following manner

Main Basket
Market Development Basket
85%
15%

Thereafter, the Board may, from time to time and upon recommendation of the Secretariat, maintain, revise, or modify the existing rates depending on the exigency of the matter.

II. The following rules shall be observed in the allocation of export authorizations.

A. General Rule:

1.  In the event that the allocable balance in a particular category is sufficient to accommodate the total applications received, the quantity applied for by the manufacturer-exporter shall automatically be granted.

Any remaining balance shall be returned to the basket for the next allocation.  The Board may however have the option to allocate the same based on the manner of allocation that may be responsive to market demands.

2.         In the event that the allocable balance in a particular category is not sufficient to accommodate the total applications received, the allocation shall be as follows:

A. Critical Categories:

1. Main Basket

*  The allocable balance shall be divided into:

Children's Basket (size 2-6X)
% Based on the ratio of actual
performance of T and NT
Adult Basket (size 7 & above)

*  The allocable balance on each basket shall be allocated based on Cap and Rank System:

a.  Only performers are allowed to participate the allocation.  Performers are those with performance in the preceding year of at least 1,000 units of measure in a particular category.

b.  Allocation shall be given to the manufacturer-exporters from the highest Rank down-the-line to the extent of the CAP of the firm in the current year, or Cap on the Cap, whichever is lower, per round.

c.  Minimum quantity per round is 1,000 doz. or its equivalent for USA and EU, and 3,000 pcs for Canada.

d.  The awards must meet at least the industry Average FOB/LVA of the category.

e.  Formula in determining the Rank (R)

R = ALVA + AFOB/Unit

Where:

ALVA + AFOB/Unit = average Local Value Added plus average FOB price per unit actually realized by firm in the immediately preceding year.

f.   Cap is computed as follows:

Where net EA/EQ
Holding is greater
Than or equal to
Maximum quantity to be allocated
shall be

20% of LR

10.0% of actual qty. performed
19% of LR
10.5% of actual qty. performed
18% of LR
11.0% of actual qty. performed
17% of LR
11.5% of actual qty. performed
16% of LR
12.0% of actual qty. performed
15 % of LR
12.5% of actual qty. performed
14% of LR
13.0% of actual qty. performed
13% of LR
13.5% of actual qty. performed
12% o fLR
14.0% of actual qty. performed
11% of LR
14.5% of actual qty. performed
10% of LR
15.0% of actual qty. performed
9% of LR
15.5% of actual qty. performed
8% of LR
16.0% of actual qty. performed
7% of LR
16.5% of actual qty. performed
6% of LR
17.0% of actual qty. performed
5% of LR
17.5% of actual qty. performed
4% of LR
18.0% of actual qty. performed
3%of LR
18.5% of actual qty. performed
2% of LR
19.0% of actual qty. performed
1.5%of LR
21.0% of actual qty. performed
1%of LR
22.0% of actual qty. performed
Below 1% of LR
25.0% of actual qty performed

In order for a manufacturer-exporter to qualify for the CAP and RANK, it must have a performance of at least 1,000 units of measure in the concerned category in the preceding year.

*LR - Level of Restraint (Quota)

g. The allocable balance shall be allocated based on the ratio of the CEA/REA balances.

h. In the event that there exists an allocable balance in either the T or NT basket, the same may be transferred to the other basket to accommodate the unsatisfied EA application (s) received in the same bidding.

I. CAP ON THE CAP. The Board may, upon recommendation of the Secretariat, impose a cap on the firm's cap equivalent to 5% of the allocable balance in order to effect equitable distribution pf the quota to the manufacturer-exporters.

j. In subsequent allocations, firms awarded in the previous allocation shall have the second priority. The allocation will start from the last awardee (Rank) of the previous allocation. In case the last awardee in the previous allocation was not fully satisfied, the same shall be the first one to be allocated the difference between its cap or the current Cap on Cap (whichever is lower) and the quantity awarded.

2.  Market Development Basket:

a.  A registered manufacturer-exporter who participates in GTEB led international fairs and exhibitions and who gets confirmed orders shall be given preferential treatment in the allocation of awards.

b.  All quantities from the Market Development Basket shall be reserved for promotional activities and development of Filipino brand names, and cannot be transferred to the general basket.

B. Non-Critical Categories:

1. The allocable balance shall be allocated to manufacturer-exporters based on earliest shipment dates, extendible for one (1) month.

2. In cases where the allocable balance is not sufficient for all applications and shipment dates of applicants are the same, allocation shall be done on a pro-rata basis.