ASEAN-Hong Kong, China Free Trade Area (AHKFTA)

The ASEAN-Hong Kong, China Free Trade Area (AHKFTA) is a regional trade agreement that brings together the ten ASEAN Member States, including the Philippines, and Hong Kong, China in a regional trade pact. Importers gain lower tariffs and easier access to goods from these places.

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The agreement was signed on 12 November 2017 during the 31st ASEAN Summit held in Manila, Philippines. It took effect on 01 January 2019, while Philippine tariff commitments were implemented through Executive Order No. 102, effective 10 February 2020. For a full picture of how these preferential rates affect your import costs, see our cost breakdown guide.

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Core Objectives of AHKFTA

• Lowering and removing tariffs on goods moving between member nations
• Parties remove other trade blocks on most goods over time
• Opening up opportunities for service providers to work across borders
• Protecting and growing investments within the region
• Building stronger trade, investment, and economic ties
• Supporting newer ASEAN members with special treatment to help them join the regional economy

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Products Covered Under AHKFTA

Importers bringing in these goods qualify for lower tax rates, provided they follow the rules. The AHKFTA applies to a wide range of goods including jewelry and precious items, clothing and apparel, watches and clocks, and toys and similar consumer goods. The specific schedule for tax cuts began on January 1, 2019. In the Philippines, Executive Order No. 102 put these commitments into law on February 10, 2020.

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Rules of Origin: Proving Your Product Belongs

To claim lower tariffs, your goods must meet origin rules. This proves they come from AHKFTA member countries.

• Wholly Obtained - The product must be 100% grown, born, or made within the member country.
• Regional Value Content (RVC 40) - The "General Rule." At least 40% of the product's value must come from materials or labor within the ASEAN-Hong Kong region.
• Change in Tariff Subheading - For some items, you must show that the foreign parts used changed into a completely different category of product during manufacturing.

For a full explanation of how these origin criteria work across all Philippine trade agreements, see our Rules of Origin Guide.

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Required Document: Certificate of Origin

Importers must submit a Certificate of Origin Form AHK to claim tariff benefits. Without this document, customs authorities will apply the regular tariff rates instead of the reduced rates under the agreement. There is no reciprocity rule under this agreement, which means entitlement depends strictly on compliance with origin requirements and documentation.

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How to Claim Your Discount

To lawfully claim reduced tariffs under the AHKFTA, the importer must follow a specific process:

1. Check the List - The product must be listed in the "Inclusion List" of the agreement.
2. Verify Origin - The product must meet the origin requirement, either through Wholly Obtained rules or RVC 40.
3. Submit the Form - The importer must submit the Certificate of Origin Form AHK to the Bureau of Customs. Without this specific form, the standard, higher tax rate applies. See our Import Documentation Checklist for full details on required documents.

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Philippine Tariff Structure Under the AHKFTA

Philippine tariff rates under the AHKFTA show a progressive shift toward lower or zero duty rates from 2017 to 2022. A growing number of tariff lines fall under reduced or eliminated duty categories, which reflects the country's commitment to trade liberalization under the agreement. This means more goods become cheaper to import over time.

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Why AHKFTA Matters to Businesses

The AHKFTA offers a legal basis to reduce import duties when sourcing goods from ASEAN countries or Hong Kong, China. However, the benefit is not automatic. The importer must verify if the product qualifies under the tariff schedule, confirm compliance with origin rules, secure the proper Certificate of Origin, and declare the claim during customs clearance processing. Importers who comply with these requirements may lower landed costs and improve pricing competitiveness in the local market.