Home » Customs & Trade, Ports/Terminals » Duterte forms council to revive barter trade

Philippine President Rodrigo Duterte has created a council that will revive the ancient trade of barter in Mindanao to spur growth in the region.

Under Executive Order (EO) No. 64 series of 2018, the Mindanao Barter Council (MBC) is established to supervise, coordinate, and harmonize policies, programs, and activities on barter in the Southern Philippines.

According to the EO signed by Duterte on October 29, barter “is an ancient commercial practice among our people in the Southern Philippines, which continues to thrive and evolve as a living tradition until the present day.”

Bartering is the trading of services or goods with another person in which no money is involved. This type of exchange started centuries ago before money was invented.

Duterte last September said he would bring back barter trade to address the high inflation rate in the country.

“Maybe I’ll set up the barter trade again, depende kung papayag ang finance people [if the finance people agree],” the President said.

The 1994 Investment Priorities Plan recommended the phase-out of the barter system in Mindanao “to allow the people in Mindanao, especially those in the Autonomous Region in Muslim Mindanao (ARMM), to actively participate in the socio-economic programs initiated by the government in the areas such as the Zamboanga Special Economic Zone and the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA).”

The revival of barter in Mindanao is meant to create jobs and business opportunities, as well as strengthen trade and commerce between member states of BIMP-EAGA.

The MBC will be attached to the Department of Trade and Industry (DTI) for policy and program coordination, and will hold principal office in Jolo, Sulu.

It will be composed of the DTI secretary as chairperson, the Mindanao Development Authority secretary and the Bureau of Customs (BOC) commissioner as vice-chairpersons, and representatives from seven other agencies—with a rank not lower than an assistant secretary and fully authorized to decide on behalf of their respective agencies—as members. These agencies are the Department of Finance, Department of Foreign Affairs, Department of Agriculture, DTI-Autonomous Region in Muslim Mindanao, Maritime Industry Authority, Philippine Coast Guard, and Philippine Ports Authority.

The MBC may also call on or invite representatives from major Muslim ethno-linguistic groups such as the Tausug, Maguindanaoan, Maranaw, Yakan, and Sama to participate in its proceedings. MBC shall also have a secretariat to support its functions under EO 64.

Under the EO, barter ports shall be established in the ports of Siasi and Jolo in Sulu, and Bongao in Tawi-Tawi. Upon the recommendation of MBC, barter ports in other areas may be created subject to the approval of the President. Barter ports shall only pertain to ports accredited by MBC and shall exclude ports owned and operated by private individuals or entities.

BOC and the Bureau of Internal Revenue shall establish offices in barter ports for systematic and streamlined processing of entry and exit of allowable barter goods.

Goods to be allowed under the barter system shall enter Philippine territory only through barter ports. Products enjoying tariff protections or having quantitative restrictions such as rice, corn, and sugar, as well as products requiring special import permits or are subject to standard requirements, shall remain regulated by applicable laws, rules, and regulations.

Qualified traders of allowable barter goods shall import or export only after securing the required goods declaration or export declaration, clearances, licenses, and any other requirements prescribed under existing laws. In case of importation, the submission of requirements after the arrival of goods but prior to their release from customs custody shall be governed by the relevant laws, rules, and regulations.

Notwithstanding the free entry of goods within the framework of the Association of Southeast Asian Nations Trade in Goods Agreement (ATIGA), mechanisms established under existing laws on countertrade, prosecution of dumping protests, as well as countervailing measures, safeguards, and other trade remedies, shall remain in full force and effect.

National and local tax laws shall apply only to goods imported under EO 64 whose valuation, as determined by appropriate authorities, exceeds the de minimis value of P10,000, or in such threshold adjusted by the finance secretary pursuant to the Customs Modernization and Tariff Act.

Unless it is dissolved earlier by the President, the MBC shall perform its function pursuant to EO 64 until the Bangsamoro government is organized or an office on barter becomes fully operational.

EO 64 repeals, amends, or modifies EO 427 series of 1990 (Placing the control and supervision of barter trade in Jolo, Sulu with the regional government of the Autonomous Region in Muslim Mindanao), Memorandum Orders 160 series of 1993 (Creating a barter trade inter-agency committee) and 304 series of 1995 (Creating a presidential task force on alternative livelihood for barter traders in Mindanao), and all other orders, rule, regulations, and related administrative issuances which are inconsistent with the new EO.

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