RESTRICTED
WORLD TRADE G/SCM/Q2/PHL/10
11April 1997
ORGANIZATION(97-1518)
Original: English Committee onSubsidies andCountervailing Measures
SUBSIDIES
Replies ofthePHILIPPINES to
Questions posed bytheEUROPEAN COMMUNITY1andtheUNITED STATES2
Thefollowingcommunication,dated3April1997,hasbeenreceivedfromthePermanentMission
ofthePhilippines.
_______________
QUESTIONS FROM THE EUROPEAN COMMUNITY
1. Could thePhilippines provide theGDPpercapita ofeachregion ofthecountry asapercentage
ofthenational average?
Answer
ThePhilippines hadalready provided 1990 dataforregional GDP percapita initswritten
response toquestions from theECinG/SCM/Q2/PHL/3, Question 1(a)2. Thiscanbefound in
G/SCM/Q2/PHL/5 (16September 1996). Inanyevent, anupdate ofthatdata-in1995 terms -is
provided below:
GDP percapita in
current Phil. pesos%ofnational
average
Philippines 27,131 100
Luzon Regions:
Ilocos
Cordillera
Cagayan Valley
Central Luzon
Metro Manila
Southern Tagalog
Bicol14,451
29,166
15,170
22,083
67,894
28,303
12,43353
109
56
81
250
104
46
1G/SCM/Q2/PHL/9,2G/SCM/Q2/PHL/2/Suppl.1.G/SCM/Q2/PHL/10
Page2
GDP percapita in
current Phil. pesos%ofnational
average
Visayas Regions:
Western Visayas
Central Visayas
Eastern Visayas21,906
23,557
14,20681
87
52
Mindanao Regions:
Western Mindanao
Northern Mindanao
Southern Mindanao
Central Mindanao
Autonomous Region of
Muslin Mindanao18,047
24,605
24,164
21,989
8,64067
91
89
81
32
Source ofBasic Data: 1996 Philippine Statistical Yearbook.
2. Under theOmnibus Investment Code, whyisitconsidered thattheincome taxholiday does
notfallwithin Article 1.1oftheSubsidies Agreement?
Answer
AsthePhilippines hadindicated initswritten response toquestions from theECin
G/SCM/Q2/PHL/3, Question 1(b)3, which canbefound inG/SCM/Q2/PHL/5, thefiscal incentives
under theOICdonotconstitute subsidies within themeaning ofArticle 1.1because theyaregenerally
available andinvolve theremission ofduties andtaxes which donotexceed thatwhich haveaccrued.
3. Under theExport Development Act(EDA) canthePhilippines confirm thatthetaxcredit for
increase incurrent yearexport revenue isaspecific subsidy?
Answer
ThePhilippines isoftheviewthatthetaxcredit provision oftheEDA isnotaspecific subsidy
insofar assuchprovision isavailable toallexporters ofallgoods andservices. Itisnotlimited to
certain enterprises orspecific industries. Moreover, itmerely remits taxesimposed during thevarious
stages ofproduction which cannot berefunded atsuchstages. Inanyevent, tothisday,theEDA
hasnotbeenfullyimplemented, particularly inrespect ofthetaxcredits.
SeealsowrittenresponsesinG/SCM/Q2/PHL/5toquestionsfromtheECinG/SCM/Q2/PHL/3,
Questions II(a)1and2.
4. Under theEDAingeneral, whatpercentage ofoutput areeligible investors required toexport?
Answer
First ofall,itmust beclarified thatexporters ingeneral, andnotinvestors perse,arethe
beneficiaries oftheEDA. Anexporter isdefined asanyperson, natural orjuridical, licensed todo
business inthePhilippines, engaged directly orindirectly intheproduction, manufacture ortrade of
products orservices whoearns atleast50%ofitsnormal operating revenues fromthesaleofitsproductsG/SCM/Q2/PHL/10
Page3
orservices abroad forforeign currency. Inthisregard, certain flexibilities todeveloping countries
likethePhilippines aregranted byArticle 27oftheSubsidies Agreement.
QUESTION FROM THE UNITED STATES
Initsoralreplies,thedelegationofthePhilippinesindicatedthatforanumberoftheprogrammes
about which theUnited States hadraised questions, thePhilippines didnotconsider suchprogrammes
tobewithin thenotification requirements ofArticle 25oftheAgreement either because theywere
programmes aimed atregional development and/or theywerenotprogrammes believed tocause trade
effects. Neither ofthese explanations provides abasis forexcluding asubsidy programme froman
Article 25notification. Could thePhilippines please notify therelevant programmes, orprovide further
explanation astowhyitbelieves suchsubsidies arenotwithin thenotification requirements?
Answer
ThePhilippines wishes todirect theattention oftheUStoitswritten replies toUSquestions
inG/SCM/Q2/PHL/2, which wastransmitted totheCommittee through theSecretariat on
23August 1996. Inparticular, replies toQuestion 2.Cthrough 2.Yclarify thefollowing:
Bureau ofInternal Revenue Regulation 6-94(exemption fromadvance payment, butnotfrom
thepayment, ofwithheld taxes)
DBP-Omnibus Export Financing Programme
Export Credit Enhanced Leverage Facility
Central Bank Rediscounting (monetary policy)
OilExploration andDevelopment Act
Petroleum Exploration Concessionaires (expired)
CoalDevelopment Act
Geothermal Exploration andDevelopment
Mini-Hydroelectric Power Incentives Act
Small Scale Mining Act
Philippine Mining Actof1995
Local Water Districts
Bases Conversion andDevelopment Actof1992
Philippine Economic Zone Authority
Comprehensive Agrarian Reform Law
Magna Carta forCountryside andBarangay Business Enterprises (expired)
Phividec Industrial Estate Enterprises (dormant)
ActGranting Capital Equipment Incentives (toencourage imports)
IronandSteel Industry Act
Cooperative Code ofthePhilippines
Cattle Financing Programme
Countryside Loan Fund (social amelioration fundoflegislators)
Bayanihan saKabuhayan Tungo saTaon 2000 (social amelioration fundoflegislators)