WHEREAS, under Executive Order No. 287, Series of 1993, the Philippines started the implementation of its commitment under the new time frame of the accelerated Common Effective Preferential Tariff Scheme for the ASEAN Free Trade Area (CEPT-AFTA) which contained Annex "A" (Articles Granted Concessions under the CEPT-AFTA) and Annex "B" (Articles for Phasing-in the CEPT-AFTA);

WHEREAS, Annex "B" of E.O. 287 covered products excluded from the Philippine CEPT Inclusion List;

WHEREAS, implementation of the tariff reduction schedule of products under Annex "B" of E.O. 287 for the succeeding years is subject to the issuance of separate implementing Executive Orders;

WHEREAS, under Executive Order No. 453, Series of 1997, the Philippines continued to incorporate an Annex "B";

WHEREAS, the Philippines is undertaking a continuous tariff rationalization program where changes in the basic (MFN) Philippine rate of duty have affected certain products in Annex "B" particularly those whose MFN rates have been raised;

WHEREAS, for products affected by the increase in the basic (MFN) Philippine rate of duty, the continued implementation of Annex "B" would result to a premature granting of the CEPT concessions;

WHEREAS, under the CEPT Agreement, ASEAN Member Countries are not obliged to provide a tariff reduction schedule for products excluded from the CEPT Inclusion List and, until these products are phased into the CEPT, Member Countries have the flexibility to determine the applicable ASEAN rates;

WHEREAS, the Special AEM Meeting in Phuket on 28-29 April 1995 agreed that the margins of preference accorded products under the Preferential Trading Arrangements (PTA) should be integrated into the CEPT eventually leading to a single trading arrangement in ASEAN;

NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Philippines, pursuant to the powers vested in me by law, do hereby order:

SECTION 1.       Annex "B" of Executive Order No. 453, Series of 1997, is hereby repealed.

SECTION 2.       The articles specifically listed in Annex "A"^* hereof (PTA Items Not Included in the CEPT Scheme), as classified under Section 104 of the Tariff and Customs Code of 1978, as amended, shall be subject to the ASEAN rates of duty as indicated in Column 4 of Annex "A". The rates so indicated shall be applied to imports coming from ASEAN Member Countries.

SECTION 3.       The ASEAN rate of duty indicated in Column 4 of Annex "A" shall be in effect until such products are transferred to the CEPT Inclusion List in which case the CEPT rate of duty thereof under the Executive Order effecting said transfer shall apply.

SECTION 4.       In the event that subsequent changes are made in the basic (MFN) Philippine rate of duty on any of the articles listed in Annex "A" to a rate lower than the rate prescribed in Column 4, such article shall automatically be accorded the corresponding reduced rate of duty. In the event that the MFN rates of the products listed in Annex "A" are modified higher than the rates indicated in column 4 thereof, the ASEAN rates prescribed in said column 4 shall apply.

SECTION 5.       The Margins of Preference (MOPs) accorded under the ASEAN Preferential Trading Arrangements shall no longer be extended to any of the products listed in Annex "A" hereof.

SECTION 6.       From the date of effectivity of this Order, all articles listed in Annex "A" entered or withdrawn from warehouses in the Philippines for consumption shall be imposed the rates of duty therein prescribed subject to qualification under the Rules of Origin as provided for in the Protocol to Amend the Agreement on the ASEAN Preferential Trading Arrangements signed by the AEM on 15 December 1995.

SECTION 7.       All other items covered by the repealed Annex "B" of Executive Order No. 453 but not listed in Annex "A" hereof shall be subject to the basic (MFN) Philippine rate of duty applicable at the time of importation.

SECTION 8.       All decrees, order, issuances, and rules and regulations or parts thereof, which are contrary to or inconsistent with this Executive Order are hereby repealed, amended or modified accordingly.

SECTION 9.       This Executive Order shall take effect immediately.

Adopted: 11 June 1998

BY THE PRESIDENT:

(SGD.) ALEXANDER P. AGUIRRE
Executive Secretary

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^* Text Available at Office of the National Administrative Register, U.P. Law Complex, Diliman, Quezon City.