Chapter 7:

INTRODUCTION TO TRADE FINANCE

Intro: Dens
Presentation- Gab, dens

This module aims to provide students with better understanding on Philippine

trade , Customs, Regulations & Standards procedures of trading locally to glocally
competitive firms.

Its better to understand the function of the Regulation Agencies and the Step by step
procedures in trading of goods and services/

Export Registration and Licence procedures

1-2 Erika
3-4 Kiana
5-6 Jerome
7-7.1 Cien
7.2-8 Chrizelle
This post explains about different phases in export process that every exporter needs to go

through for completing export from Philippines.

1. Department of Trade and Industry (Register the Company/individual

Business)

(Export Declaration (ED – DTI form)

2. Bureau of Internal Revenue ( Certificate of Registration - 2303)
3. Bureau of Custom (Certificate of Origin)
1.1 Import Entry and Internal Revenue Declaration (BOC IEIRD
Form 236);

3.2 Informal Import Declaration and Entry (BOC Form 177); and

3.3 Single Administrative Documents (SAD)

4. Bureau of Export and Trade Promotion (Register the Business for

Promotional Campaign)

5. Philexport (Philippine Exporters Confederation of the Philippines, Inc – In a

form of membership for Export Documentation (EDs)

6. Business Copyright, Trademark and Patent

7. Required documents for Importers and Exporters

7.1 For Importers

 Packing list;
 Invoice;
 Bill of lading;
 Import Permit;
 Customs Import Declaration; and
 Certificate of Origin.

7.2 For exporters

 Packing List;
 Invoice;
 Bill of Lading;
 Export License;
 Customs Export Declaration; and
 Certificate of Origin.

Additional documents for certain exports: Certain products require

government permission to be exported. Below is a detailed list of products
requiring additional permission as well as the concerned government authority: 

 Endangered species of flora and fauna (Bureau of Biodiversity

Management);
 Animals and animal products (Bureau of Animal Industry);
 Fish and fish products (Bureau of Fisheries and Aquatic Resources);
 Plants (Bureau of Plant Industry);
 Rice (National Food Authority);
  Radioactive materials (Philippine Nuclear Research Institute)
 Sugar and molasses

8. Benefits Registration ( SSS, PhilHealth, HDMF )

Tarrif and Protectionism- Christine

Businesses operating in Special Economic Zones (SEZs) or free port zones are

exempted from paying taxes and tariffs on imported raw material and manufacturing

equipment. As stipulated in the Customs Modernization and Tariff Act, 2015, the main

SEZs in the Philippines include:

 Clark Freeport Zone;

 Poro Point Freeport Zone;
 John Hay Special Economic Zone;
 Subic Bay Freeport Zone;
 Cagayan Special Economic Zone;
 Zamboanga City Special Economic Zone and;
 Freeport Area of Bataan.

As mentioned earlier, exporters and importers operating in SEZs or free port

zones must register with either PEZA or the specific free port regulator.

Protectionism – is a policy of protecting the domestic businesses from foreign competition

by applying tariffs, import quotas or many types of other restrictions attached to the
imports of foreign competitors goods and services.

 Government –Levied Tariff - the common practice is raising the price of the
imported proucts so that they cost more and hence become less attractive than
the domestic products.
 Import Quotas - these quota limit the amount of imported products into a contry.
 Mercantilism – this aim is to increase trade and improve the domestic
economies.
  Reciprocal Trade Agreement – this trade agreement limit the protectionism
measures in lieu of eliminating them fully.

TWO FOLD OF FREE TRADE PURPOSE

1ST - Is to make sure that foreign countries do not subsidize export so that
market incentives are not distorted and hence efficient allocation of activity
among the countries is not destroyed.

2nd – is to assure that International companies do not dump their exports in an

aggressive manner.

Sources of Funds Kristian

 Export and Import Bank – these banks provide two types of loans as such foreign
government lending agencies which then re-lend to foreign buyers of capital goods
related services.

1. Direct Loans to foreign buyer

2. Intermediary loans to responsible parties

 With –in Company Loans – new companies raise funds through external sources such as
shares, debentures, loans , public deposits and others, while an existing firm can
generate funds through retained earnings.

 Eurobonds - internationational bonds are denominated in a currency of non-native

country where it is issued. This is good in providing capital to MNCs and foreign
government.

 International Equity Markets – Shares are most common tools for raising long term
funds from markets . All companies , except those that are limited by a guarantee, have
a statutory right to issue shares.

 International Finance Corporation – Loans from specialized financial institutions and

development banks or from commercial banks are also tools for generating funds.
_________________
Sources:

https://scaledupfx.com/blog/2018/12/12/the-10-most-important-elements-for-success-in-forex/

https://www.amazon.com/Forex-Trading-2020-Strategies-Cryptocurrency-ebook/dp/B07V7GV97R

https://www.adb.org/publications/boosting-gender-equality-adb-trade-finance-partnerships
https://www.toppr.com/guides/business-studies/international-business/export-procedures-and-
documentations/