CM 3

• All kinds of merchandise imports are allowed in the Philippines, but the importation of certain commodities is regulated or prohibited for reasons of public health and safety, national security, international commitments, and development/rationalization of local industry.
• AABs and AAB-forex corps may sell foreign exchange to residents for payment of importations, subject to submission of the following: for sale not exceeding USD500,000 (for individuals) and USD1,000,000 (for corporates/other entities) or its equivalent in other foreign currency per client per day.
• For sale exceeding USD500,000 (for individuals) and USD1,000,000 (for corporates/other entities) or its equivalent in other foreign currency per client per day, a duly accomplished Application To Purchase Foreign Exchange and documents are required.
• Payments may, however, be made in Philippine pesos.
• For sale of foreign exchange (regardless of amount) to settle net payables under intercompany netting arrangement (Open Account (O/A)] among non-bank related parties, a duly accomplished Application To Purchase Foreign Exchange and documents are required.
• Export advances refer to all payments/remittances received before shipment, including prepayments and Red Clause advances.
• Gold sales to the BSP which are considered as constructive exports are allowed.
• Exports to ASEAN countries are allowed provided that the BSP shall not be asked to intervene in the clearing of any balances from this payments scheme.
• Bank draft/telegraphic transfer, buyer's checks, traveler's checks or acceptable foreign currency notes may be used in prepayment/export advance, but for buyer's checks, the same shall be cleared before shipment.
• Freely Importable Commodities are commodities the importation of which is neither regulated nor prohibited as defined under (2) and (3) hereunder.
• Regulated Commodities are commodities, the importation of which requires clearances/permits from appropriate government agencies including the BSP.
• Prohibited Commodities are commodities, the importation of which is not allowed under existing laws.
• Section 84, Modes of Payment for Imports allows AABs and/or AAB-forex corps to sell foreign exchange to service payments for imports under any of the following arrangements subject to the provisions of Sections 9 to 13.
• Prohibited Exports are commodities the exportation or sale of which is prohibited/penalized by law.
• Freely Exportable Commodities are commodities the exportation of which is neither regulated nor prohibited and may be effected without prior approval of or clearance from any government agency.
• Payments for exports may be made under any of the following modes without prior BSP approval: Letter of Credit (L/C), Documents Against Payment (D/P)/Cash Against Documents (CAD), Documents Against Acceptance (D/A), Open Account (O/A) arrangement including intercompany netting among non-bank related parties.
• These importations shall also include machinery/equipment and spare parts consigned to the local manufacturer/processor for eventual re-export to the consignor, provided that the equipment involved shall be used only in connection with the processing of products for export.
• Payments for exports may also be made through export advances without prior approval of the BSP.
• Importations by export producers of raw materials and accessories/supplies from foreign suppliers/buyers abroad for the manufacture or processing of products destined for export to said foreign suppliers/buyers are allowed.
• Regulated Commodities are commodities the exportation of which requires clearances/permits from appropriate government agencies.
• All export shipments shall be covered by an Export Declaration using the prescribed form.
• Ownership, control or power to vote, of ten percent (10%) to fifty percent (50%) of the outstanding voting stock of the entity, or vice-versa; interlocking directorship, except in cases involving independent directors as defined under existing regulations; common stockholders owning ten percent (10%) to fifty percent (50%) of the outstanding voting stock of each non-bank entity; management contract or any arrangement granting power to the non-bank to direct or cause the direction of management and policies of the non-bank counterpart, or vice-versa; permanent proxy or voting trusts in favor o
• The policy of the BSP is to encourage commodity exports which generate foreign exchange earnings for the country.
• Commodity exports are allowed without restriction except for certain commodities which are regulated or prohibited for reasons of national interest or by provision of law.
• Affiliate (of a non-bank) refers to a non-bank entity linked directly or indirectly to a non-bank by means of any of the following: ownership, control or power to vote, of ten percent (10%) to fifty percent (50%) of the outstanding voting stock of the entity, or vice versa; interlocking directorship or officership, except in cases involving independent directors as defined under existing regulations; common stockholders owning ten percent (10%) to fifty percent (50%) of the outstanding voting stock of each non-bank entity; management contract or any arrangement granting power to the non-bank
• Letter of Credit (L/C) is a mode of payment for imports.
• L/Cs shall be negotiated in accordance with the terms and conditions set forth in the L/C and shall be governed by the Uniform Customs and Practices on Documentary Credits.
• For importanoms which shall be settled via intercompany netting arrangement under Section 8.6 hereof, the guidelines for sale, remittance and r eporting Section 12.
• All L/Cs must be opened on or before the date of shipment and only one L/C should be opened for each import transaction.
• Deferred L/Cs shall be governed by the pertinent provisions of Part Three, Chapter 1 (Loans and Guarantees) hereof.
• Under an O/A arrangement, the said documents are released by the seller directly to the importer without coursing the documents through the banks, u pon the importer's promise to pay at some Future date.
• Self-Funded/”No Dollar” Imports are imports funded by importer’s own foreign currency deposit accounts or those sent by suppliers abroad for which no payment in foreign exchange will be made whether immediate or potential.
• AABs and AAB - forex corps may service within [29] calendar days after B/L or AWB shipment date applications for direct remittance of import payments upon presentation of the complete original shipping document s, inaccordance with existing rules, and if applicable, import clearance, for regulated items issued by concerned government agencies.
• For purposes of opening an L/C, importers shall submit to the AAB the documents.
• The foreign exchange selling/remitting AAB shall report these transactions to the BSP - IOD using the prescribed forms.
• AABs and AAB - forex corps may sell foreign exchange to importers without prior BSP approval for advance payment for importations subject to the guidelines hereof, meluding documents prescribed thereunder.
• Amendments of L/Cs need not be referredto the BSP for prior approval.
• Under the D/P arrangement, AABs shall advise the importer of the receipt of the complete original shipping documents and effect the release of said documents to the importer upon receipt of payment.
• AABs shall remit payment to the supplier through the correspondent bank abroad
• If the 29th day falls un a non - banking day, the following hanking day shall apply and the importation will still be considered.