EXECUTIVE ORDER NO. 244, October 03, 2003

MODIFYING THE RATES OF DUTY ON MOTOR VEHICLES, AS PROVIDED FOR UNDER THE TARIFF AND CUSTOMS CODE OF 1978 (PRESIDENTIAL DECREE NO. 1464, AS AMENDED), IN ORDER TO IMPLEMENT PREFERENTIAL RATES THEREON UNDER THE AUTOMOTIVE EXPORT PROGRAM.

WHEREAS, the automotive industry is an important contributor to sustainable national economic development;

WHEREAS, the government issued E.O. 156, series of 2002 establishing a Comprehensive Industrial Policy and Directions for the Motor Vehicle Development Program to develop the Philippines as the manufacturing hub in ASEAN for certain motor vehicles, parts and components;

WHEREAS, an integral component for the Comprehensive Motor Vehicle Development Program under E.O. 156 is the provision of special export incentive to the automotive sector;

WHEREAS, temporary export incentives will compensate for certain structural deficiencies that inhibit the automotive industry’s attainment of global competitiveness;

WHEREAS, the benefits from the development of the automotive industry’s global competitiveness will outweigh the tariff revenues to be foregone from the grant of preferential tariffs on imports;

WHEREAS, Sections 401 and 402 of the Tariff and Customs Code of 1978 (Presidential Decree 1464), as amended, empower the President of the Republic of the Philippines to increase, reduce, or remove existing rates of import duty, as well as to modify the tariff nomenclature;

NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic of the Philippines, by virtue of the powers vested in me by law, do hereby order:

Section 1. The articles specifically listed in Annex "A" hereof, as classified under Section 104 of the Tariff and Customs Code of 1978, as amended, shall be subject to the Most Favored Nation (MFN) rate of import duty in accordance with the schedule indicated under the "MFN" column;

Section 2. The articles specifically listed in Annex "A" hereof, as classified under Section 104 of the Tariff and Customs Code of 1978, as amended, shall be subject to the ASEAN CEPT rate of import duty in accordance with the schedule indicated under the "CEPT" column. The ASEAN CEPT rate so indicated shall be accorded to imports coming from ASEAN Members States applying CEPT concession to the same product pursuant to Article 4 of the CEPT Agreement and its interpretative Notes;

Section 3. Upon the effectivity of this Executive Order, the articles specifically listed in the aforesaid Annex "A", which are entered and withdrawn from warehouses in the Philippines for consumption, shall be levied the MFN rate of duty herein prescribed;

Section 4. Upon the effectivity of this Executive Order, the articles specifically listed in the aforesaid Annex "A", which are entered and withdrawn from warehouses in the Philippines for consumption, shall be levied the CEPT rate herein prescribed, subject to qualification under the Rules of Origin as provided for in the Agreement on the CEPT scheme for the AFTA signed in 28 January 1992;

Section 5. All Presidential issuances, administrative rules and regulations, or parts thereof, which are inconsistent with this Executive Order are hereby revoked or modified accordingly;

Section 6. The Department of Trade and Industry, in consultation with the National Economic Development Authority and the Department of Finance, shall issue appropriate guidelines to implement the preferential tariff privilege herein granted in accordance with the conditions of the Program shown in Annex "B";

Section 7. This Executive Order shall be effective for a period of five (5) years, from 1 January 2004 until 31 December 2008, following its complete publication in two (2) newspapers of general circulation in the Philippines.

Done in the City of Manila, Philippines, this 3rd day of October in the year of Our Lord, two Thousand and Three.

(SGD.) GLORIA MACAPAGAL-ARROYO

President of the Philippines

By the President:

(SGD.) ALBERTO G. ROMULO

Executive Secretary