April 3, 2026
Duties, Taxes & Fees
Customs valuation determines the dutiable value of imported goods and serves as the basis for computing duties and taxes. In the Philippines, valuation follows a hierarchy of methods under the Customs Modernization and Tariff Act, aligned with international standards set by the World Trade Organization.
Method 1: Transaction Value (Primary Method)
Based on the actual price paid or payable for the goods when sold for export to the Philippines. This is the primary and most commonly used method. It requires complete and accurate import documentation to support the declared value.
Method 2: Transaction Value of Identical Goods
If the transaction value cannot be used, customs refers to the value of identical goods previously imported into the Philippines under similar conditions.
Method 3: Transaction Value of Similar Goods
Uses the value of similar goods with comparable characteristics, quality, and reputation.
Method 4: Deductive Value Method
Based on the resale price of the imported goods in the Philippines, less expenses such as commissions, profits, and local charges.
Method 5: Computed Value Method
Based on the cost of production, including materials, labor, overhead, and a reasonable profit and general expenses.
Method 6: Fallback Method
Used when none of the above methods can be applied. Based on reasonable means consistent with WTO valuation principles.
Key Compliance Notes
- Always declare the true transaction value
- Provide complete supporting documents
- Incorrect valuation may lead to reassessment, penalties, or seizure of goods
Regulating Agencies
- Bureau of Customs – primary authority
- World Trade Organization – provides the valuation framework
Understanding customs valuation helps importers avoid penalties, ensure transparency, and facilitate efficient cargo clearance.
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