Customs Valuation Methods in the Philippines

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 World Trade Organization standards.

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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 most commonly used method. It requires complete and accurate import documentation to support the declared value.

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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.

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Method 3: Transaction Value of Similar Goods

Uses the value of similar goods with comparable characteristics, quality, and reputation.

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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.

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Method 5: Computed Value Method

Based on the cost of production, including materials, labor, overhead, and a reasonable profit margin and general expenses.

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Method 6: Fallback Method

Used when none of the above methods can be applied. Based on reasonable means consistent with WTO valuation principles.

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Key Compliance Notes

• Always declare the true transaction value
• Provide complete supporting documents
• Incorrect valuation may lead to reassessment, penalties, or seizure of goods - see Penalties and Seizures in Philippine Customs for more on this.

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Regulating Agencies

• Bureau of Customs - primary authority
• World Trade Organization - provides the valuation framework

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Knowing how customs value is determined helps importers avoid penalties. For a full cost breakdown, see our Importation Costs Breakdown Philippines guide., stay transparent, and plan their landed costs accurately.