PHL seeking US GSP renewal with duty-free treatment for footwear

THE Department of Trade and Industry said it is negotiating for duty-free treatment for Philippine footwear in seeking the renewal of its Generalized System of Preferences (GSP) agreement with the US.

Trade Secretary Ramon M. Lopez said in a webinar over the weekend that “our intention, aside from the renewal, is to be add more sectors that will benefit from the GSP. Just recently, we were able to add travel goods… (which) can now avail of the zero-duty entry into the US market,” Mr. Lopez said.

“Footwear is not yet included in the GSP and that is one sector that we are lobbying to be included and there are other exportable items that we wish to be included,” he added.

The Philippines’ eligibility for US GSP expired at the end of 2020.

Mr. Lopez has said the Philippines is ultimately seeking a free trade agreement with the US.

The US GSP program allowed duty-free entry of more than 5,000 Philippine products in to the US, including electronics and agricultural products.

Separately, Mr. Lopez said he prefers work-from-home (WFH) arrangements to the proposal to adopt a four-day workweek to shield commuters from rising fuel costs accompanying the Russian invasion of Ukraine.

“Frankly, WFH might be even better because you spread the number of hours of work and not lump them into the four days. But just the same, you are still able to work even remotely while you are at home,” Mr. Lopez said.

Mr. Lopez said the information technology-business process outsourcing (IT-BPO) industry should explore more flexible arrangements that do not tie them to working from registered premises.

“For companies that are in ecozones, there is a requirement for them to be physically within the ecozone and that is a different issue altogether. That is the reason why we have been asking them to go back to physically within the zone,” Mr. Lopez said.

“But there are avenues in the future — they can register outside the ecozone system so that they will be more flexible when it comes to adopting a WFH arrangement,” he added.

Recently, the Fiscal Incentives Review Board (FIRB) rejected the proposal of the Philippine Economic Zone Authority to allow IT-BPO firms located within ecozones to extend WFH arrangements until Sept. 12 without losing fiscal incentives and without the required 10% on-site capacity.

According to FIRB, the proposal was rejected since WFH is “only a time-bound temporary measure,” adding that employees should return to work with vaccination rates rising.

Under FIRB Resolution 19-21, registered IT-BPO firms are allowed to implement a WFH arrangement up to 90% of their total workforce until March 31 without losing their tax incentives. The measure was adopted to help the industry adjust to the coronavirus disease 2019 (COVID-19) pandemic. — Revin Mikhael D. Ochave