The Philippines Department of Finance is considering scrapping the PHP 10,000 de minimis exemption on low-value imported goods to increase government revenue, address competitive disadvantages for local manufacturers and create a more level playing field for domestic retailers.
The Philippines Department of Finance (DoF) is studying whether to remove the tax exemption on imported packages worth less than PHP 10,000, a rule known as the de minimis rule. The government wants to recover lost revenue and give local manufacturers a fairer footing.
How the exemption works
Imported goods valued at PHP 10,000 or less are exempt from customs duties and taxes. The value excludes insurance and shipping costs and is measured after genuine discounts. Tobacco and alcohol products remain subject to excise tax even when they fall below the threshold.
The Philippines introduced the PHP 10,000 de minimis threshold in 2016 under Customs Administrative Order No. 02-2016, implementing Section 423 of the CMTA. The order provides simplified clearance for low-value shipments and requires a review every three years, with adjustments based on the consumer price index.
Why the DoF wants a change
Finance Undersecretary Karlo Fermin Adriano said the exemption puts domestic producers at a disadvantage. Locally bought goods generally carry value added tax (VAT) regardless of price, while cheap imports carry neither tariffs nor VAT.
Online shopping platforms such as Lazada and Shopee have made it easier for Filipino buyers to order low-priced goods directly from overseas sellers, which has increased the rule’s reach. Adriano described the situation as revenue leakage. He said scrapping the exemption could boost government collections and narrow the competitive gap between foreign and domestic sellers.
Timing and next steps
Removing the exemption requires legislation, and the DoF is still at the study stage. Adriano said the department may push for the change under the current or a future administration. He acknowledged that the global trend favours removing such exemptions, but he warned that the timing must be handled carefully because consumers may oppose the move.
The Philippine Retailers Association, led by chair Roberto Claudio Sr., raised concerns with government agencies in September 2026 and has pushed for the rule’s removal.
