TARIFF 3: CUSTOMS

VALUATION SYSTEM
MODULE 3:
Dutiable Value: Dutiable Freight
and Insurance per CMO 22-
2007
 DUTIABLE FREIGHT
(CMO 22-2007)

• Refers to the charges paid for

the transport of the cargo from
port of origin to port of
destination.

• Main Carriage.
A. DUTIABLE FREIGHT
-REFERS TO THE CHARGES PAID FOR THE TRANSPORT OF THE
CARGO from Port of origin to Port of Destination.

1. If no freight charges is indicated in the commercial invoice

or if included in the invoice but no separate value was
allocated for the freight charges then the freight charges
appearing in the B/L or AWB shall be deemed appearing in
the B/L or AWB shall be deemed as the dutiable freight.

FORMULA:
DUT FRT = FRT PER B/L or AWB
2. If the freight charges appears in both the commercial
invoice and B/L or AWB, then the dutiable freight is
whichever is higher between the freight per invoice
and the freight charges per B/L or AWB.

FORMULA:
Dut. FRT = FRT/BL or AWB vs FRT/INV,
whichever is higher
EXAMPLE 1:
GIVEN:
SHIPMENT: GENERAL CARGO
TOTAL CFR: $32,000
TOTAL FRT/INV: $2,450
TOTAL FRT/BL: $2,550
TOTAL DUT. INS: $600
EXCH RATE: P50/$1

How much is the Dutiable Value?

EXAMPLE 2:
GIVEN:
SHIPMENT: GENERAL CARGO
TOTAL CPT: $15,000
TOTAL FRT/INV: $1,450
TOTAL FRT/BL: $1,300
TOTAL DUT. INS: $200
EXCH RATE: P50/$1

How much is the Dutiable Value?

3. If the freight charges does not appear in both the B/L or
AWB and invoice, then the freight charges declared in the SAD
or entry shall be deemed the dutiable freight.
However if the IATA (International Air Transport Association)
freight rate is given, the freight per SAD should not be lower
than 70% of the IATA freight rate. (comparison shall be made
between freight charges per entry and 70% of the IATA freight
rate, whichever is higher is deemed the dutiable freight)

Formula:
Dut. FRT = FRT/SAD vs 70% of IATA
FRT, whichever is higher
EXAMPLE 3:
GIVEN:
SHIPMENT: Perishable Cargo
TOTAL FCA: $7,800
TOTAL FRT/SAD: $1,600
TOTAL FRT/IATA: $2,600
TOTAL DUT. INS: $620
EXCH RATE: P50/$1

How much is the DV?

4. In case of bulk shipments, the certified copy of Charter
Party/bareboat freight agreement showing the actual freight
charges paid shall be deemed the dutiable freight.

Freight Contract, and Stowage Plan shall be presented to

BOC and all of which shall be attached to the working copy
of the SAD/entry.

Formula:
Dut. FRT = FRT paid per Charter Party Contract
5. For bulk/ general cargo shipments made by the National
Food Authority (NFA), the actual freight charge may be
accepted provided that it is not lower than 10% of the
CFRICPT value of the commodity.

Formula:
Dut. FRT = Actual FRT/BL or INV. vs 10% of
CFR/CPT, WHICHEVER IS HIGHER
EXAMPLE 4:
GIVEN:

CONSIGNEE: NFA
SHIPMENT: CORN IN BULK
TOTAL FOB: $45,678
TOTAL FRT/BL: $4,600
TOTAL Dut. Ins: $2,000
Exch.RATE: P50/$1
EXAMPLE 5:
GIVEN:

CONSIGNEE: NFA
SHIPMENT: WHOLE WHEAT IN BULK
TOTAL CFR: $29,678
TOTAL FRT/INV: $3,050
TOTAL FRT/BL: $2,765
TOTAL Dut. Ins: $2,000
Exch. RATE: P50/$1

How much is the DV?

6. In case of REFRIGERATED SHIPMENTS

a) certification from shipping lines as to the freight paid

must be presented for Customs verification.

Dut. FRT = FRT/BL (w/ Certificate from S.L.)

b) In the absence of a shipping lines certification, the following
freight charges may be used as reference:
Shipments coming from China in reefer vans, should not be lower
than the following freight charges:

PORT OF ORIGIN 1 x 20’ 1x40

Guangzhou $ 1,300.00 $ 1,700.00
Xiamen $ 1,500.00 $ 1,800.00
Shanghal $ 1,800.00 $ 3,200.00
Dalian $ 1,350.00 $ 1,680.00
* Shipments coming from Hong Kong:
$ 1,600.00 per 40° reefer van
$ 800.00 per 20' reefer van

* Shipments coming from Singapore:

PLUS: BAF Total Amount
1 x 20 ft - $ 900.00 70.00/20 $ 970.00/20°
1 x 40 ft - $ 1,850.00 140.00140’ $ 1,990.00/40'
*Shipments coming from Los Angeles, USA:

1 x 20 ft - $ 3,050.00
1 x 40 ft - $ 6,100.00

Dut. FRT = FRT/BL vs REEFER RATES,

whichever is higher (if no certification from S.L. as to actual
freight paid)
EXAMPLE 6
GIVEN:

SHIPMENT: 1X20’ VAN- FROZEN TUNA

ORIGIN: Hongkong
TOTAL CIF: $14,250
TOTAL O/FRT: $750 (w/o cert. from SL)
TOTAL DUT. INS. $520
EXCH RATE: P50/$1

HOW MUCH IS THE DV?

B. DUTIABLE INSURANCE: (CMO 22-2007)
REFERS TO COST OF INSURANCE PREMIUM PAID to cover risk against loss/damage
to the goods while in transit from Port of origin to Port of destination.
Sec. 3.1
1. If the terms of sale are CIF/CIP, the amount of the actual insurance premium
indicated as a separate value in the invoice shall be deemed the dutiable
insurance.

Illustration: Per INVOICE

FOB $ 10,000.00
FRT $ 1,000.00
INS $ 150 (Dutiable Insurance / CMO 22-2007)
TOTAL CIF $ 11,150.00
2. In cases where the insurance premium is not indicated as a separate
value (CIF/CIP- lump sum amount) in the invoice, then the dutiable
insurance shall be as follows:

a) 2% of FOB/FCA - Gen. cargo

b) 4% of FOB/FCA - Dangerous, inflammable, Chemicals and High Risk

cargo
3. If the importation is covered by a local or domestic insurance (non-
CIF/CIP), the dutiable insurance shall be the actual insurance premium
paid provided a certification and official receipt (O.R.), as to the
premium paid, was presented to BOC.

In the absence of said certification and O.R., the local insurance

premium shall not be lower than 2% (General cargo) or 4% (Dangerous,
inflammable chemicals or high risk cargo) of the FOB/FCA value.
4. Importation not covered by any local insurance, the amount of
insurance premium declared in the Entry may be accepted, provided
that such amount shall not be lower than 2% and 4% of the FOB/CA
value for general and dangerous, inflammable, chemicals & high risk
cargoes respectively:

No Local Insurance:
a) For General Cargoes:
Dut. INS = 2% x FOB

b) For Dangerous Cargoes:

Dut. INS = 4% x FOB
CMO 22-2007, SEC. 3.1.2
a) For direct importation by the government, the original copy of the
Marine Open Policy issued by the GSIS together with true copy shall be
presented to the BOC (Attn: Import Assessment Service) certified by the
latter. The Bureau shall adopt the dutiable insurance based on the actual
SIS insurance premium paid as indicated in the open insurance policy:
Dut. INS = INS premium/GSIS (P)
E/R (PhP to USD)

b) If insured by a domestic surety company other than the GSIS, apply the
provisions under 3.
CMTA, SEC. 708 - EXCHANGE RATE (SEC. 203, TCCP)
For assessment and collection of import duty, the value quoted in foreign
currencies shall be converted into the currency of the Phils. based on exchange rate
published by the Bangko Sentral ng Pilipinas.

SEC. 3, CMO 14-2019 (Exchange Rate)

1. The Exchange Rate officially disseminated to the public by the Bangko Sentral ng
Pilipinas each Friday shall be the exchange rate to be adopted the following day,
Saturday and up to Friday of the following week.
2. In the event that there is no officially published exchange rate on a Friday, the
latest rate published by BS prior to that Friday shall apply.
3. In the computation of duties and taxes, the prevailing exchange rate for the week
on the date of entry lodgement shall be the basis in the computation of duties and
taxes of a particular shipment for Consumption and Warehousing entries.
4. Foreign currencies shall be converted directly to Philippines Pesos.