EXECUTIVE ORDER NO. 677, October 31, 2007

MODIFYING THE RATES OF DUTY ON CERTAIN IMPORTED ARTICLES AS PROVIDED UNDER THE TARIFF AND CUSTOMS CODE OF 1978, AS AMENDED, IN ORDER TO IMPLEMENT THE PREFERENTIAL TARIFF RATES ON CERTAIN PRODUCTS UNDER THE ASEAN INDUSTRIAL COOPERATION (AICO) SCHEME, IN FAVOR OF TOYOTA MOTOR PHILIPPINES CORPORATION; TOYOTA AUTOPARTS PHILIPPINES, INC. (COE NOS. TOYOTA /2006/35 AND TOYOTA/2006/36)

WHEREAS, the Philippines is a Contracting Party to the Basic Agreement on the ASEAN Industrial Cooperation Scheme (AICO) signed in Singapore on 27 April 1996;

WHEREAS, the Philippines is a signatory to the Protocol amending the Basic Agreement on the AICO Scheme signed in Singapore on 21 April 2004;

WHEREAS, the Philippines is a participating country in the approved AICO Arrangements of Toyota Motor Philippines Corporation; Toyota Autoparts Philippines, Inc., along with Indonesia;

WHEREAS, under the Toyota AICO Certificate of Eligibility No. Toyota/2006/35, the Philippines (Toyota Motor Philippines Corporation) will import from Indonesia (PT. Toyota Motor Manufacturing Indonesia) certain original equipment manufacture (OEM) automotive parts/ components for Camry and Corolla. In exchange, Indonesia (PT. Toyota Motor Manufacturing Indonesia) will import from the Philippines complementary parts/ components for the OEM of Kijang Innova;

WHEREAS, under the Toyota AICO Certificate of Eligibility No. Toyota/2006/36, the Philippines (Toyota Motor Philippines Corporation; Toyota Autoparts Philippines, Inc.) will import from Indonesia (PT. Toyota Motor Manufacturing Indonesia) certain original equipment manufacture (OEM) automotive parts/ components for Innova Multi-purpose Vehicle (Innova). In exchange, Indonesia (PT. Toyota Motor Manufacturing Indonesia) will import from the Philippines complementary parts/ components for the OEM of Kijang Innova;

WHEREAS, AICO Certificate of Eligibility No. Toyota/2006/35 and Toyota/2006/36 were issued on 01 December 2006 and were later amended on 08 January 2007 and 03 January 2007 respectively, in favor of the participating companies in the Toyota AICO Arrangements;

WHEREAS, in consonance with Articles 5 and 7 of the Basic Agreement of the AICO Scheme, as amended, participating companies in the approved Toyota AICO Arrangements shall qualify for 0% preferential tariff rates to be extended by Indonesia and the Philippines as participating countries.

NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Philippines, pursuant to the powers vested in me under Section 402 of the Tariff and Customs Code of 1978, as amended, 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 accorded the AICO rate of 0% on parts/components as specified in Column 6 thereof.

Section 2. The AICO rate provided in Annex "A" shall be accorded to the AICO entity in Indonesia (PT. Toyota Motor Manufacturing Indonesia) upon the effectivity of this Executive Order;

Section 3. Upon the effectivity of this Executive Order, the articles specifically listed in the aforesaid Annex "A" which are entered or withdrawn from warehouses in the Philippines for consumption shall pay the applicable AICO preferential tariff rates specified under Section 1 hereof, subject to qualification under the Rules of Origin for the CEPT, as evidenced by the Certificate of Origin-Form "D".

Section 4. All presidential Issuances, administrative rules and regulations or parts thereof, which are contrary to or inconsistent with this Executive Order are hereby revoked or modified accordingly.

Section 5. This Executive Order shall take effect immediately upon publication in a national newspaper of general circulation.

DONE in the City of Manila, this 31st day of October in the year of Our Lord, Two Thousand and Seven.

(Sgd.) GLORIA M. ARROYO

By the President:

(Sgd.) EDUARDO R. ERMITA

Executive Secretary