WORLD TRADE
ORGANIZATIONG/SCM/N/1/PHL/2
26 September 2001
(01-4569)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
NOTIFICATION OF LAWS AND REGULATIONS
UNDER ARTICLE 32.6 OF THE AGREEMENT
PHILIPPINES
The following communication, dated 12 September 2001, has been received from the
Permanent Mission of the Philippines.
_______________
Pursuant to Article 32.6 of the Agreement on Subsidies and Countervailing Measures, I have
the honour to notify the Philippine legislation known as the Republic Act No. 8751, entitled "TheCountervailing Act of 1999" and its Implementing Rules and Regulations embodied in Joint
Administrative Order No. 02 (2000).G/SCM/N/1/PHL/2
Page 2
REPUBLIC ACT NO. 8751
The Countervailing Act of 1999
_____________________________________________________________
H.S. No. 7036
S.No. 1330
Republic of the Philippines
Congress of the Philippines
Metro Manila
Eleventh Congress
Third Special Session
Begun and held in Metro Manila, on Monday, the twenty seventh day of
July, nineteen hundred and ninety-nine
---ooo0ooo---
AN ACT STRENGTHENING THE MECHANISMS FOR THE IMPOSITION OF
COUNTERVAILING DUTIES ON IMPORTED SUBSIDIZED PRODUCTS, COMMODITIES OR
ARTICLES OF COMMERCE IN ORDER TO PROTECT DOMESTIC INDUSTRIES FROM
UNFAIR TRADE COMPETITION, AMENDING FOR THE PURPOSE SECTION 302, PART 2,
TITLE II, BOOK I OF PRESIDENTIAL DECREE NO. 1464, OTHERWISE KNOWN AS THE
TARIFF AND CUSTOMS CODE OF THE PHILIPPINES, AS AMENDED
Be it enacted by the Senate and House of Re presentatives of the Philippines in Congress
assembled:
SECTION 1.  Section 302, Part 2, Title II, Book 1 of Presidential Decree No. 1464, otherwise
known as the Tariff and Customs Code of the Philippines, as amended, is hereby further amended toread as follows:
"SEC. 302.  Countervailing Duty. -
"Whenever any product, commodity or article of commerce is granted directly or
indirectly by the government in the country or origin or exportation, any kind or formof specific subsidy upon the production, manufacture or exportation of such product,
commodity or article, and the importation of such subsidized product, commodity or
article has caused or threatens to cause material injury to a domestic industry or has
materially retarded the growth or prevents the establishment of a domestic industry as
determined by the Tariff Commission (hereinafter referred to as the 'Commission'),the Secretary of Trade and Industry, in the case of non-agricultural product,
commodity or article, or the Secretary of Agriculture, in the case of agricultural
product, commodity or article (both of whom are hereinafter simply referred to as 'the
Secretary', as the case may be) shall issue a department order imposing a
countervailing duty equal to the ascertained amount of the subsidy.  The same levy
shall be imposed on the like product, commodity  or article thereafter imported to the
Philippines under similar circumstances.  The countervailing duty shall be in additionto any ordinary duties, taxes and charges imposed by law on such imported product,
commodity or article.G/SCM/N/1/PHL/2
Page 3
"(A) Initiation of Action. - A countervailing action may be initiated by the
following:
"(1) Any person, whether natural or juridical, who has an interest to
protect, by filing a verified petition for the imposition of a
countervailing duty by or on behalf of the domestic industry;
"(2) The Secretary of Trade and Industry or the Secretary of Agriculture,
as the case may be, in special circumstances where there is sufficient
evidence of an existence of a subsidy, injury and causal link.
"(B) Requirements. - A petition shall be filed with the Secretary and shall be
accompanied by documents, if any, which are reasonably available to the petitioner
and which contain information supporting the facts that are essential to establish the
presence of the elements for the imposition of a countervailing duty, and shall furtherstate, among others:
"(1) The domestic industry to which the petitioner belongs and the
particular domestic product, commodity or article or class of
domestic product, commodity or article being prejudiced;
"(2) The number of persons employed, the total capital invested, the
production and sales volume, and the aggregate production capacity
of the domestic industry that has been materially injured or is
threatened to be materially injured or whose growth or establishment
has been materially retarded or prevented;
"(3) The name and address of the known importer, exporter, or foreign
producer, the country of origin or export, the estimated aggregate or
cumulative quantity, the port and the date of arrival, the import entry
declaration of the imported product, commodity or article, as well as
the nature, the extent and the estimated amount of the subsidy
thereon; and
"(4) Such other particulars, facts or allegations as are necessary to justify
the imposition of countervailing duty on the imported product,
commodity or article.
"A petition for the imposition of a countervailing duty shall be considered to have
been made 'by or on behalf of the domestic industry' if it is supported by those
domestic producers whose collective output constitutes more than fifty per cent
(50%) of the total production of the like product produced by that portion of thedomestic industry expressing either support for or opposition to the application. 
However, an investigation shall be initiated only when domestic producers supporting
the application account for at least twenty-five per cent (25%) of the total production
of the like product produced by the domestic industry.  In cases involving an
exceptionally large number of producers, degree of support or opposition may bedetermined by using statistically valid sampling techniques or by consulting their
representative organizations.
"Within ten (10) days from his receipt of the petition or information, the Secretary
shall review the accuracy and adequacy of the information or evidence provided in
the petition to determine whether there is suff icient basis to justify the initiation of anG/SCM/N/1/PHL/2
Page 4
investigation.  If there is no sufficient basis to justify the initiation of an investigation,
the Secretary shall dismiss the petition and shall properly notify the Secretary of
Finance, the Commissioner of Customs a nd other parties concerned regarding such
dismissal.  The Secretary shall extend legal, technical and other assistance to the
concerned domestic producers and their organizations at all stages of thecountervailing action.
"(C) Notice to the Secretary of Finance. - Upon his receipt of the petition, the
Secretary shall, without delay, furnish the Secretary of Finance with a summary of the
essential facts of the petition, and request the latter to immediately inform the
Commissioner of Customs regarding such petition and to instruct him to gather and
secure all import entries covering such allegedly subsidized product, commodity or
article without liquidation.  The Commissioner of Customs shall submit to theSecretary a complete report on the number, volume, and value of the importation of
the allegedly subsidized product, commodity or article within ten (10) days from his
receipt of the instruction from the Secretary of Finance, and to make similar
additional reports every ten (10) days thereafter.
"(D) Notice to and Answer of Interested Parties. -  Within five (5) days from
finding of the basis to initiate an investigation, the Secretary shall notify all interested
parties, and shall furnish them with a copy of  the petition and its annexes, if any.  The
interested parties shall, not later than thirty  (30) days from their receipt of the notice,
submit their answer, including such relevant evidence or information as is reasonably
available to them to controvert the allegations of the petition.  If they fail to submittheir answer, the Secretary shall make such preliminary determination of the case on
the basis of the facts and/or information available.
"The Secretary shall avoid, unless a decision has been made to initiate an
investigation, any publicizing of the petition.  However, after receipt of a properly
documented petition and before proceeding to initiate an investigation, he shall notifythe government of the exporting country about the impending investigation.
"(E) Preliminary Determination. -  Within twenty (20) days from his receipt of the
answer of the interested parties, the Secretary shall, on the basis of the petition of the
aggrieved party and the answer of such interested parties and their respective
supporting documents or information, make a preliminary determination on whether
or not a prima facie case exists for the imposition of a provisional countervailing duty
in the form of a cash bond equal to the provisionally estimated amount of subsidy. Upon finding of a prima facie case, the Secretary shall immediately issue, through the
Secretary of Finance, a written instruction to the Commissioner of Customs to collect
the cash bond, in addition to the corresponding ordinary duties, taxes and other
charges imposed by law on such product, commodity or article.  The posting of a cash
bond shall be required not earlier than sixty (60) days from the date of initiation ofthe investigation.  The cash bond shall be deposited with a government depository
bank and shall be held in trust for the respondent importer.  The application of the
cash bond shall not exceed four (4)months.
"The Secretary shall immediately transmit his preliminary findings together with the
records of the case to the Commission for its formal investigation.
"(F) Termination of Investigation by the Secretary or the Commission. -  The
Secretary or the Commission as the case may be, shall motu proprio  terminate the
investigation at any stage of the proceedings if the amount of subsidy is de minimis  asG/SCM/N/1/PHL/2
Page 5
defined in existing international trade agreements of which the Republic of the
Philippines is a party; or where the volume of the subsidized imported product,
commodity or article, actual or potential, or the injury is negligible.
"(G) Formal Investigation by the Commission. - Immediately upon its receipt of
the records of the case from the Secretary, the Commission shall commence theformal investigation and shall accordingly notify in writing all interested parties and,
in addition, give public notice of such investigation in two (2) newspapers of general
circulation.
"In the formal investigation, the Commission shall essentially determine:
"(1) The nature and amount of the specific subsidy being enjoyed by the
imported product, commodity or article in question;
"(2) The presence and extent of the material injury or the threat thereof to,
or the material retardation of the growth, or the prevention of the
establishment of, the affected domestic industry; and
"(3) The existence of a causal relationship between the allegedly
subsidized imported product, commodity or article and the material
injury or threat thereof to, or the material retardation of the growth,or the prevention of the establishment of, the affected domestic
industry.
"The Commission is hereby authorized to require any interested party to allow it
access to, or otherwise provide, necessary information to enable the Commission to
expedite the investigation.  In case any interested party refuses access to, or otherwisedoes not provide, necessary information within a reasonable period of time or
significantly impedes the investigation, a final determination shall be made on the
basis of the facts available.
"The formal investigation shall be conducted in a summary manner.  No dilatory
tactics nor unnecessary or unjustified delays shall be allowed, and the technical rulesof evidence shall not be applied strictly.
"(H) Determination of the Existence of Subsidy. - A subsidy is deemed to exist:
"(1) When the government or any public body in the country or origin or
export of the imported product, commodity or article extends
financial contribution to the producer, manufacturer or exporter of 
such product, commodity or article in the form of:
"(a) Direct transfer of funds such as grants, loans or equity
infusion; or
"(b) Potential direct transfer of funds or assumption of liabilities
such as loan guarantees; or
"(c) Foregone or uncollected government revenue that is
otherwise due from the producer, manufacturer or exporter of theproduct, commodity or article:  Provided, That the exemption of any
exported product, commodity or article from duty or tax imposed onG/SCM/N/1/PHL/2
Page 6
like products, commodity or article when destined for consumption
in the country of origin and/ or export or the refunding of such duty
or tax, shall not be deemed to constitute a grant of a subsidy: 
Provided, further, That should a product, commodity or article be
allowed drawback by the country of origin or export, only theascertained or estimated amount by which the total amount of duties
and/or internal revenue taxes was discounted or reduced, if any, shall
constitute a subsidy; or
"(d) Provision of goods or services other than general
infrastructure; or
"(e) Purchases of goods from the producer, manufacturer or
exporter; or
"(f) Payments to a funding mechanism; or
"(g) Other financial contributions to a private body to carry out
one or more of the activities mentioned in subparagraphs (a) to (f)
above; or
"(h) Direct or indirect income or price support; and
"(2) When there is a benefit conferred.
"(I) Determination of Specific Subsidy. -  In the determination of whether or not a
subsidy is specific, the following principles shall apply:
"(1) Where the government or any public body in the country of origin or
export of the imported product, commodity or article explicitly limitsaccess to a subsidy to certain enterprises, such subsidy shall be
specific;
"(2) Where such government or public body through a law or regulation
establishes objective criteria and conditions governing the eligibility
for, and the amount of, a subsidy, specificity shall not exist: Provided, That the eligibility is automatic and that such criteria or
conditions are strictly adhered to.  Objective criteria shall mean those
which are neutral, do not favour certain enterprises over others, and
are economic in nature and horizontal in application, such as number
of employees or size of enterprise;
"(3) In case a subsidy appears to be non-specific according to
subparagraphs (1) and (2) above, but there are reasons to believe thatthe subsidy may in fact be specific, factors that may be considered
are: use of a subsidy programme by a limited number of certain
enterprises for a relatively longer period; granting of
disproportionately large amounts of subsidy to certain enterprises;
and exercise of wide and unwarranted discretion for granting asubsidy; andG/SCM/N/1/PHL/2
Page 7
"(4) A subsidy which is limited to certain enterprises located within a
designated geographical region within the territory of the government
or public body in the country of origin or export shall be specific.
"(J) Determination of Injury. - The presence and extent of material injury or threat
thereof to a domestic industry, or the material retardation of the growth, or theprevention of the establishment of a nascent enterprise because of the subsidized
imports, shall be determined by the Secretary or the Commission, as the case may be,
on the basis of positive evidence and shall require an objective examination of:
"(1) The volume of the subsidized imports, that is, whether there has been
a significant increase either absolute or relative to production or
consumption in the domestic market;
"(2) The effect of the subsidized imports on prices in the domestic market
for the like product, commodity or article, that is, whether there has
been a significant price undercutting, or whether the effect of such
imports is otherwise to depress prices to a significant degree or to
prevent price increases, which otherwise would have occurred to a
significant degree;
"(3) The effect of the subsidized imports on the domestic producers of the
like product, commodity or article, including an evaluation of all
relevant economic factors and indices having a bearing on the state of
the domestic industry concerned, such as, but not limited to, actual
and potential decline in output, sales, market share, profits,productivity, return on investments, or utilization of capacity; factors
affecting domestic prices; actual or potential negative effects on the
cash flow, inventories, employment, wages, growth, ability to raise
capital or investments and, in the case of agriculture, whether there
has been an increased burden on the support programmes of thenational government; and
"(4) Factors other than the subsidized imports which at the same time are
injuring the domestic industry, such as volumes and prices of non-
subsidized imports of the product, commodity or article in question;
contraction in demand or changes in the patterns of consumption;
trade restrictive practices of and competition between the foreign and
domestic producers; developments in technology and the exportperformance and productivity of the domestic industry.
"In determining threat of material injury, the Secretary or the Commission, as the case
may be, shall decide on the basis of facts and not merely allegation, conjecture or
remote possibility.  The change in circumstances which would create a situation in
which the subsidized imports would cause injury should be clearly foreseen andimminent considering such relevant factors as:
"(1) Nature of the subsidy in question and the trade effects likely to arise
therefrom;
"(2) Significant rate of increase of subsidized imports into the domestic
market indicating the likelihood of substantially increasedimportations;G/SCM/N/1/PHL/2
Page 8
"(3) Sufficient freely disposable, or an imminent substantial increase in,
capacity of the exporter of such subsidized imported product,
commodity or article indicating the likelihood of substantially
increased subsidized imports to the domestic market, taking into
account the availability of other markets to absorb the additionalexports;
"(4) Whether these subsidized imports are entering at prices that will have
a significant depressing or suppressing effect on domestic prices, and
will likely increase demand for further imports; and
"(5) Inventories of the product, commodity, or article being investigated.
"In the case where the effect of the subsidized import will materially retard the
growth or prevent the establishment of a domestic industry, information onemployment, capital investment, production and sales, and production capacity of
said domestic industry can be augmented or substituted by showing through a factual
study, report or other data that an industry which has potential to grow domestically is
adversely affected by the subsidized import.  For this purpose, the Department of
Trade and Industry for non-agricultural products, and the Department of Agriculturefor agricultural products, shall conduct continuing studies to identify and determine
the specific industries, whether locally existing or not, which have the potential to
grow or to be established domestically and whose growth or establishment will be
retarded or prevented by a subsidized import.
"(K) Cumulation of Imports. - When imports of products, commodities or articles
from more than one (1) country are simultaneously the subject of an investigation for
the imposition of a countervailing duty, the Secretary or the Commission, as the case
may be, may cumulatively assess the effects of such imports only if:
"(1) The amount of subsidization established in relation to the imports
from each country is more than de minimis  as defined in existing
international trade agreements of which the Republic of the
Philippines is a party; and
"(2) The volume of such imports from each country is not negligible; and
"(3) A cumulative assessment of the effects of such imports is warranted
in the light of the conditions of competition between the imported
products, commodities or articles, and the conditions of competition
between the imported products, commodities or articles and the likedomestic products, commodities or articles.
"(L) Public Notices and Consultation Proceedings.-  The Secretary or the
Commission, as the case may be, shall make public notices and conduct consultation
with the government of the exporting country when:
"(1) Initiating an investigation;"(2) Concluding or suspending an investigation;
"(3) Making a preliminary or final determination;G/SCM/N/1/PHL/2
Page 9
"(4) Making a decision to accept an undertaking or the termination of an
undertaking; and
"(5) Terminating a definitive countervailing duty.
"(M) Voluntary Undertaking. -  When there is an offer from any exporter of
subsidized imports to revise its price, or where the government of the exportingcountry agrees to eliminate or limit the subsidy or take other measures to that effect,
the Commission shall determine if the offer is acceptable and make the necessary
recommendation to the Secretary.  If the undertaking is accepted, the Secretary may
advise the Commission to terminate, suspend or continue the investigation.  The
Secretary may also advise the Commission to continue its investigation upon the
request of the government of the exporting  country.  The voluntary undertaking shall
lapse if there is a negative finding of the presence of a subsidy or material injury.  Inthe event of a positive finding of subsidization and material injury, the undertaking
will continue, consistent with its terms and the provisions of this section.
"(N) Final Determination and Submission of Report by the Commission. - The
Commission shall complete the formal investigation and submit a report of its
findings to the Secretary within one hundred twenty (120) days from receipt of therecords of the case:  Provided, however, That it shall, before a final determination is
made, inform all the interested parties of the essential facts under consideration which
form the basis for the decision to impose a countervailing duty.  Such disclosure
should take place in sufficient time for the parties to defend their interests.
"(O) Imposition of Countervailing Duty. - The Secretary shall, within ten (10)
days  from receipt of an affirmative final determination by the Commission, issue a
department order imposing the countervailing duty on the subsidized imported
product, commodity or article.  He shall furnish the Secretary of Finance with the
copy of the order and request the latter to direct the Commissioner of Customs to
cause the countervailing duty to be levied, collected and paid, in addition to any otherduties, taxes and charges imposed by law on such product, commodity or article.
"In case of an affirmative final determination by the Commission, the cash bond shall
be applied to the countervailing duty assessed.  If the cash bond is in excess of the
countervailing duty assessed, the remainder shall be returned to the importer
immediately:  Provided, That no interest shall be payable by the government on the
amount to be returned.  If the cash bond is less than the countervailing duty assessed,
the difference shall not be collected.
"If the order of the Secretary is unfavourable to the petitioner, the Secretary shall,
after the lapse of the period for appeal to the Court of Tax Appeals, issue through the
Secretary of Finance a department order for the immediate release of the cash bond to
the importer.
"(P) Duration and Review of Countervailing Duty. - As a general rule, any
imposition of countervailing duty shall remain in force only as long as and to the
extent necessary to counteract a subsidization which is causing or threatening to
cause material injury.  However, the need for the continued imposition of the
countervailing duty may be reviewed by the Commission when warranted, motu
proprio  or upon direction of the Secretary.G/SCM/N/1/PHL/2
Page 10
"Any interested party may also petition the Secretary for a review of the continued
imposition of the countervailing duty:  Provided, That at least six (6) months have
elapsed since the imposition of the countervailing duty, and upon submission of
positive information substantiating the need for a review.  Interested parties may
request the Secretary to examine:  (1) whether the continued imposition of thecountervailing duty is necessary to offset the subsidization; and/or (2) whether the
injury will likely continue or recur if the countervailing duty is removed or modified.
"If the Commission determines that the countervailing duty is no longer necessary or
warranted, the Secretary shall, upon its recommendation, immediately issue a
department order terminating the imposition of the countervailing duty and shall
notify all parties concerned, including th e Commissioner of Customs through the
Secretary of Finance, of such termination.
"Notwithstanding the provisions of the preceding paragraphs of this subsection, any
countervailing duty shall be terminated on a date not later than five (5) years from the
date of its imposition (or from the date of the most recent review if that review has
covered both subsidization and material injury), unless the Commission has
determined, in a review initiated at least six (6) months prior to the termination dateupon the direction of the Secretary or upon a duly substantiated request by or on
behalf of the domestic industry, that the termination of the countervailing duty will
likely lead to the continuation or recurrence of the subsidization and material injury.
"The procedure and evidence governing the disposition of the petition for the
imposition of countervailing duty shall equally apply to any review carried out underthis subsection.  Such review shall be carried out expeditiously and shall be
concluded not later than ninety (90) days from the date of the initiation of such a
review.
"(Q) Judicial Review. - Any interested party who is adversely affected by the
department order of the Secretary on the imposition of the countervailing duty mayfile with the Court of Tax Appeals a petition for review of such order within thirty
(30) days from his receipt of notice thereof:  Provided, however, That the filing of
such petition for review shall not in any way stop, suspend or otherwise toll the
imposition and collection of the countervailing duty on the imported product,
commodity or article.
"The petition for review shall comply w ith the same requirements, follow the same
rules of procedure, and be subject to the same disposition as in appeals in connectionwith adverse rulings on tax matters to the Court of Tax Appeals.
"(R) Definition of Terms. - For purposes of this subsection, the term:
"(1) 'Domestic Industry' shall refer to the domestic producers as a whole
of the like product, commodity or article or to those of them whose
collective output of the product, commodity or article constitutes amajor proportion of the total domestic production of those products,
except that when producers are related to the exporters or importers
or are themselves importers of the allegedly subsidized product or a
like product from other countries, the term 'domestic industry' may
be interpreted as referring to the rest of the producers.  In case themarket in the Philippines is divided into two or more competitive
markets, the term 'domestic industry' shall refer to the producersG/SCM/N/1/PHL/2
Page 11
within each market although their production does not constitute a
significant portion of the total domestic industry:  Provided, That
there is a concentration of subsidized imports into such a separate
market:  and Provided, further, That the subsidized imports are
causing injury to the producers of all or almost all of the productionwithin such market.
"(2) 'Interested parties' shall include:
"(a) An exporter or foreign producer or the importer of a product
subject to investigation, or the government of the exporting country
or a trade or business association a majority of the members of which
are producers, exporters or importers of such product;
"(b) A producer of the like product in the Philippines or a trade
and business association a majority of the members of which produce
the like product in the Philippines; and
"(c)  Labour unions that are representative of the industry on
coalitions of producers and/or labour unions,.
"(3) 'Like product'  shall mean a product commodity or article which is
identical, i.e., alike in all respects to the product, commodity or
article or in the absence of such product, commodity or article,
another product, commodity or article which, although not alike in all
respects, has characteristics closely resembling those of the imported
product, commodity or article under consideration.
"(S) An inter-agency committee composed of the Secretaries of Trade and
Industry, Agriculture, and Finance, the Ch airman of the Tariff Commission, and the
Commissioner of Customs shall promulgate all rules and regulations necessary for the
effective implementation of this section."
SEC. 2.  Administrative Support.- Upon the effec tivity of this Act, the Departments of Trade
and Industry and Agriculture and the Tariff Commission shall ensure the efficient and effective
implementation of the provisions of this Act by creating a special unit within each agency that will
undertake the functions relative to the disposition of countervailing cases.
All countervailing duties collected shall be earmarked for the strengthening of the capability
of the Departments of Trade and Industry and Agriculture and the Tariff Commission to undertake
their responsibilities under this Act.
Additional funding shall come from fees and charges which the aforementioned government
agencies are authorized to collect under this Act.
SEC. 3.  Separability Clause. - If any of the provisions of this Act is declared invalid by a
competent court, the remainder of this Act or any provision not affected by such declaration of
invalidity shall remain in force and effect.
SEC. 4.  Repealing Clause. - All laws, decrees, ordinances, rules and regulations, executive or
administrative orders, and such other presidential issuances as are inconsistent with any of theprovisions of this Act are hereby repealed, amended or otherwise modified accordingly.G/SCM/N/1/PHL/2
Page 12
SEC. 5.  Effectivity Clause. - This Act shall take effect after fifteen (15) days following its
publication in at least two (2) newspapers of general circulation.G/SCM/N/1/PHL/2
Page 13
JOINT ADMINISTRATIVE ORDER NO. 02
Series 2000
IMPLEMENTING RULES AND REGULATIONS GOVERNING THE
IMPOSITION OF A COUNTERVAILING DUTY UNDER REPUBLIC ACT 8751 –
THE COUNTERVAILING ACT OF 1999
In view of the amendments to Section 302 of the Tariff and Customs Code of the Philippines
brought about by  passage of RA 8751, othe rwise known as the COUNTERVAILING ACT OF 1999,
and by authority of Subsection S thereof, the following rules and regulations are hereby prescribed for
the compliance of all concerned:
Section 1.  Scope  - The provisions of this Implementing Rules and Regulations (IRR) shall apply to
any product which is granted, directly or indirectly by the government in the country of export ororigin, any kind or form  of  specific subsidy upon the exportation or manufacture of such product,
and the importation of such  subsidized product is causing or is threatening to cause material injury to
a domestic industry, or is materially retarding the growth or preventing the establishment of adomestic industry.
The following shipments and/ or consignments  shall not be subject to countervailing duty
protest:
(a) Articles imported by, or consigned to government agencies not organized for profit
and particularly designated by law or proper authorities to import, directly or throughawardees, such commodities as would stabilize and/ or supplement shortages.
(b) Conditionally duty-free importations allowable under Section 105 of the Tariff and
Customs Code as amended. 
Section 2.  Definition of Terms - For purposes of this IRR, the following definition of terms shall
prevail:
(a) "AGRICULTURAL PRODUCT " refers to a product classified under Chapters 1 to
24 of the Tariff and Customs Code of the Philippines, including those under the
specific tariff lines listed in Annex A.
(b)  “CAUSAL LINK" refers to a finding that the material injury suffered by the domestic
industry is the direct result of the importation of the subsidized product.
(c) “COMMISSION” refers to the Tariff Commission.(d) “COUNTERVAILING DUTY” refers to a special duty levied for the purpose of
offsetting any kind or form of specific subsidy bestowed directly or indirectly uponthe exportation or manufacture of any product.  The countervailing duty shall be in
addition to any ordinary duties, taxes and charges imposed by law on such imported
product.
(e) “COUNTRY OF EXPORT” is the country where the allegedly subsidized product
was shipped to the Philippines, regardless of the location of the seller.  The country of
export and the country of origin may be the same, but not in all instances.G/SCM/N/1/PHL/2
Page 14
(f) “COUNTRY OF ORIGIN” is the country where the allegedly subsidized product
either was wholly obtained or where the last substantial transformation took place.
The country of origin and the country of export may be the same, but not in all
instances.  In the case of transhipment where a product is shipped from a third
country that is not the country where the product was manufactured or processed, thecountry of origin will be different from the country of export.
(g) "DOMESTIC INDUSTRY" refers to the domestic producers as a whole of the like
product or to those of such producers whose collective output of the product
constitutes a major proportion of the total domestic production of that product, except
that when producers are related to the foreign exporters or importers or are
themselves importers of the allegedly subsidized product, the term "domesticindustry" may be interpreted as referring to the rest of the producers.
Producers shall be deemed to be related to foreign exporters or importers only if:1. one of them directly or indirectly controls the other; or 2. both of them are directly or indirectly controlled by a third person; or 
3. together they directly or indirectly control a third person, provided that there
are grounds to believe or suspect that the effect of the relationship is such asto cause the producer concerned to behave differently from non-related
producers.
For this purpose, one shall be deemed to control another when the former is legally or
operationally in a position to exercise restraint or direction over the latter.
If available data does not permit the separate identification of the domestic
production of the like product, the domestic production shall refer to the production
of the narrowest group or range of products  which includes the like product for which
the necessary information is available.
(h) “FOREIGN EXPORTER” refers to one whose name appears on documentation
attesting to the export of the product to the Philippines regardless of the
manufacturer’s name in the invoice.
(i) “INTERESTED PARTIES” refer to persons or entities which are directly affected by
the investigation.  They shall include (1) a domestic importer, a foreign exporter orproducer of the product subject to investigation, or the government of the country of
export or origin, or a trade or business association a majority of the members
of which are importers, foreign exporters or producers of such product; (2) a producer
of the like product in the  Philippines or a trade and business association a majority of
the members of which produce the like product in the Philippines; and (3) labourunions that are representative of the industry or coalitions of producers and/or
labour unions.
(j) "LIKE PRODUCT" refers to a product which is identical or alike in all respects to the
allegedly subsidized product, or in the absence of the former, another product which,although not alike in all respects, has characteristics closely resembling those of the
allegedly subsidized product.G/SCM/N/1/PHL/2
Page 15
(k) “NON-ACTIONABLE SUBSIDIES” refers to subsidies protected from
countervailing action either because they are considered to be of particular value and
not to be discouraged or because they are considered to have no, or at most minimal,
trade-distorting effects or production effects
(l) "NON-AGRICULTURAL PRODUCT " refers to a product classified under
Chapters 25 to 97 of the Tariff and Customs Code of the Philippines, excluding the
products defined in Annex A.
(m) "PRICE DEPRESSION" refers to the extent at which the domestic producer reduces
its selling price in order to compete with the allegedly subsidized product.
(n) "PRICE SUPPRESSION" refers to the extent by which the allegedly subsidized
product prevents the domestic producer from increasing its selling price to a level that
will allow full recovery of its cost of production.
(o) "PRICE UNDERCUTTING" refers to the extent at which the allegedly subsidized
product is consistently sold at a price below the domestic selling price of the likeproduct.
(p) "SECRETARY" refers to the Secretary of Trade and Industry in the case of non-
agricultural product or the Secretary of Agriculture, in the case of agricultural
product, or their duly designated representatives.
(q) “SPECIFIC SUBSIDY” refers to the subsid y limited to an enterprise or industry or
group of enterprises or industries.  A subsidy can be limited to certain enterprises or
industries by being available only in particular regions of a country.  All export
related subsidies and subsidies related to the use of domestic over imported goodsare specific.  Subsidies can also be specific if they are provided in practice to only
certain enterprises or industries even though the law may not explicitly limit their
application in such a manner.
(r) "SUBSIDIZED IMPORT/PRODUCT" refers to any product which is granted,
directly or indirectly by the government in the country of export or origin, any kind or
form of specific subsidy upon the exportation or manufacture of such product, andwhich is causing or is threatening to cause material injury to a domestic industry, or is
materially retarding the growth or preventing the establishment of a domestic industry
producing the like product.
(s) “SUBSIDY” refers to any specific assistance (e.g., financial contribution, income or
price support schemes) provided directly or indirectly by the government of the
country of export or origin in respect of the product imported into the Philippines,
which confers a benefit to the foreign exporter or producer of said product.  Examples
of financial contributions are grants, soft loans, guarantees and certain equity
infusions, tax credits and goods and services provided by governments.  A subsidycan be an export subsidy, aimed at assisting exports, or it can be a domestic subsidy,
which provides assistance irrespective of whether the product is exported or not. 
Section 3.   Non-Actionable Subsidies
(a) The World Trade Organization (WTO) Agreement on Subsidies and Countervailing
Measures and the Agreement on Agriculture creates general categories of subsidies
which are non-actionable, i.e., which cannot be challenged multilaterally or be subject
to countervailing action.  Under these agreements, these subsidies are protected eitherG/SCM/N/1/PHL/2
Page 16
because they are considered to be of particular value and not to be discouraged or
because they are considered to have no, or at most minimal, trade-distorting effects or
production effects.
(b) For the purposes of this IRR, the foll owing categories of subsidies shall be non-
actionable:
1. Assistance for research activities conducted by foreign firms or by higher
education or research establishments on a contract basis with such foreign
firms if the assistance covers1 not more than seventy-five per cent (75%) of
the costs of industrial research2 or fifty per cent (50%) of the costs of pre-
competitive development activity3 4, and that such assistance is limited
exclusively to:
(i) costs of personnel (researchers, technicians and other supporting staff
employed exclusively in the research activity);
(ii) costs of instruments, equipment, land and buildings used exclusively
and permanently (except when disposed of on a commercial basis)
for the research activity;
(iii) costs of consultancy and equivalent services used exclusively for the
research activity, including bought-in research, technical knowledge,
patents, etc.;
(iv) additional overhead costs incurred directly as a result of the research
activity;
(v) other running costs (such as those of materials, supplies and the like),
incurred directly as a result of the research activity.
2. Assistance to disadvantaged regions within the territory of a country of export
or origin pursuant to a general framework of regional development5 and non-
                                                     
1 The allowable levels of non-actionable assistance referred to in this subparagraph shall be established
by reference to the total eligible costs incurred over the duration of an individual project.
2 The term “industrial research” means planned sear ch or critical investigation aimed at discovery of
new knowledge, with the objective that such knowledge may be useful in developing new products, processes orservices, or in bringing about a significant improvement to existing products, processes or services.
3 The term “pre-competitive development activity” means the translation of industrial research findings
into a plan, blueprint or design for new, modified or improved products, processes or services whether intended
for sale or use, including the creation of a first prototype which would not be capable of commercial use. It may
further include the conceptual formulation and design of products, processes or services alternatives and initialdemonstration or pilot projects, provided that these sa me projects cannot be converted or used for industrial
application or commercial exploitation. It does not include routine or periodic alterations to existing products,production lines, manufacturing processes, services, and other on-going operations even though those alterations
may represent improvements.
4 In the case of programmes which span industrial research and pre-competitive development activity,
the allowable level of non-actionable assistance shall not exceed the simple average of the allowable levels ofnon-actionable assistance applicable to the above two categ ories, calculated on the basis of all eligible costs as
set forth in items (i) to (v) of this subparagraph.
5 A “general framework of regional development” means that regional subsidy programmes are part of
an internally consistent and generally applicable regional development policy and that regional developmentG/SCM/N/1/PHL/2
Page 17
specific within the meaning of Section 12 within eligible region provided
that:
(i) each disadvantaged region must be a clearly designated contiguous
geographical area with a definable economic and administrativeidentity;
(ii) the region is considered as disadvantaged on the basis of neutral and
objective criteria
6, indicating that the region’s  difficulties arise out of
more than temporary circumstances; such criteria must be clearly
spelled out in law, regulation, or other official document, so as to be
capable of verification;
(iii) the criteria shall include a measurement of economic development
which shall be based on at least one of the following factors:
• one of either income per capita or household income per capita, or GDP
per capita, which must not be above eighty-five per cent (85%) of the
average for the territory concerned;
• unemployment rate, which must be at least one hundred ten per cent
(110%) of the average for the territory concerned; as measured over athree-year period; such measurement, however, may be composite one
and may include other factors. 
3. Assistance to promote adaptation of existing facilities
7 to new environmental
requirements imposed by law and/or regulations which result in greater
constraints and financial burden on foreign firms, provided that
the assistance:
(i)  is a one-time non-recurring measure; and(ii)  is limited to twenty per cent (20%) of the cost of adaptation; and
(iii) does not cover the cost of replacing and operating the assisted
investment, which must be fully borne by the foreign firms; and
(iv) is directly linked to and proportionate to a foreign firm’s planned
reduction of nuisance and pollution, and does not cover any
manufacturing cost savings which may be achieved; and
                                                                                                                                                                    
subsidies are not granted in isolated geographical points having no, or virtually no, influence on the
development of a region.
6 “Neutral and objective criteria” means criteria which do not favour certain regions beyond what is
appropriate for the elimination or reduction of regional disparities within the framework of the regionaldevelopment policy. In this regard, regional subsidy programme shall include ceilings on the amount of
assistance which can be granted to each subsidized project . Such ceilings must be differentiated according to the
different levels of development of assisted regions and must be expressed in terms of investment costs or cost ofjob creation.  Within such ceilings, the distribution of assistance shall be sufficiently broad and even to avoid thepredominant use of a subsidy by, or the granting of disproportionately large amounts of subsidy to, certainenterprises so as to be specific as defined in Section 12 of this IRR.
7 The term “existing facilities” means facilities that have been in operation for at least two years at the
time when new environmental requirements are imposed.G/SCM/N/1/PHL/2
Page 18
(v) is available to all foreign firms which can adopt the new equipment
and/or production processes.
(c) Likewise, the following categories of domestic support measures that are exempt
from the reduction commitments under the WTO Agreement on Agriculture shall benon-actionable:  Provided, however, That:
1. they have no, or at most minimal, trade-distorting effects or effects on
production;
2. they are provided through a publicly-funded government programme not
involving transfers from consumers; and
3. they do not have the effect of providing price support to foreign producers.
In addition, policy-specific criteria and conditions are set out below.
1. General Services
Policies in this category involve expenditures (or revenue foregone) in relation to
programmes which provide services or benefits to agriculture or the rural community in the country or
export or origin.  They shall not involve direct payments to foreign producers or processors. Such
programmes, which include but are not restricted to the following list, shall meet the general criteriain paragraphs c.(i) to c.(iii) above and the policy-specific conditions set out below:
(i) research, including general research, research in connection with environmental
programmes, and research programmes relating to particular products;
(ii)  pest and disease control, including general and product-specific pest and disease
control measures, such as early warning systems, quarantine and eradication;
(iii) training services, including both general and specialist training facilities;(iv) extension and advisory services, including the provision of means to facilitate the
transfer of information and the results of research to foreign producers andconsumers;
(v) inspection services, including general inspection services and the inspection of
particular products for health, safety, grading or standardization purposes;
(vi) marketing and promotion services, including market information, advice and
promotion relating to particular products but excluding expenditure for unspecified
purposes that could be used by sellers to reduce their selling price or confer a direct
economic benefit to purchasers; and
(vii) infrastructural services, including: electricity reticulation, roads and other means of
transport, market and port facilities, water supply facilities, dams and drainage
schemes, and infrastructural works associated with environmental programmes. In all
cases the expenditure shall be directed to the provision or construction of
capital works only, and shall exclude the subsidized provision of on-farm facilitiesother than for the reticulation of generally available public utilities.  It shall not
include subsidies to inputs or operating costs, or preferential user charges.G/SCM/N/1/PHL/2
Page 19
2.  Public stockholding for food security purposes8
This includes expenditures (or revenue foregone) in relation to the accumulation and holding
of stocks of products  which form an integral part of a food security programme identified in the
national legislation of the country of export or  origin. This may include government aid to private
storage of products as part of such a programme.
The volume and accumulation of such stocks shall correspond to predetermined targets
related solely to food  security. The process of stock accumulation and disposal shall be financially
transparent. Food purchases by the  foreign government shall be made at current market prices and
sales from food security stocks shall be made at no less than the current domestic market price for the
product and quality in question.
3. Domestic food aid9
This includes expenditures (or revenue foregone) in relation to the provision of domestic food
aid to sections of  population in need.
Eligibility to receive the food aid shall be subject to clearly-defined criteria related to
nutritional objectives. Such aid shall be in the form  of direct provision of food to those concerned or
the provision of means to allow eligible recipients to buy food either at market or at subsidized prices.
Food purchases by the foreign government shall be made at current market prices and the financingand administration of the aid shall be transparent.
4. Direct payments to foreign producers
Support provided through direct payments (or revenue foregone, including payments in kind)
to foreign producers  for which exemption from reduction commitments under the WTO Agreement
on Agriculture is claimed shall meet the basic criteria set out in paragraph c.1 to c.3 above, plus the
specific criteria applying to individual types of direct payment as set out in paragraphs 5 through 12
below. Where exemption from reduction is claimed for any existing or new type of direct payment
other than those specified in paragraphs 5 through 12, it shall conform to criteria (ii) through (v) in
paragraph 5, in addition to the general criteria set out in paragraph c.1 to c.3.
5. Decoupled income support
(i) Eligibility for such payments shall be dete rmined by clearly-defined criteria such as
income, status as a producer or landowner, factor use or production level in a defined
and fixed base period.
                                                     
8 For the purposes of this paragraph, governmental stockholding programmes for food security
purposes in developing countries whose operation is transparent and conducted in accordance with officiallypublished objective criteria or guidelines shall be considered to be in conformity with the provisions of thisparagraph, including programmes under which stocks of foodstuffs for food security purposes are acquired and
released at administered prices, provided that the difference between the acquisition price and the external
reference price is accounted for in the aggregate measurement support as defined in Article 6 of the WTOAgreement on Agriculture.
9  (& 1)For the purposes of this particular paragraph and that succeeding it, the provision of foodstuffs at
subsidized prices with the objective of meeting food requirements of urban and rural poor in developingcountries on a regular basis at reasonable prices shall be  considered to be in conformity with the provisions of
this paragraph.G/SCM/N/1/PHL/2
Page 20
(ii) The amount of such payments in any given year shall not be related to, or based on,
the type or volume of production (including livestock units) undertaken by the
producer in any year after the base period.
(iii) The amount of such payments in any given year shall not be related to, or based on,
the prices, domestic or international, applying to any production undertaken in any
year after the base period.
(iv) The amount of such payments in any given year shall not be related to, or based on,
the factors of production employed in any year after the base period. 
(v) No production shall be required in order to receive such payments.
6. Government financial participation in income insurance and income safety-net
programmes:
(i) Eligibility for such payments shall be determined by an income loss, taking into
account only income derived from agriculture, which exceeds thirty per cent (30%) of
average gross income or the equivalent in net income terms (excluding any payments
from the same or similar schemes) in the preceding three-year period or a three-
year average based on the preceding five-year period, excluding the highest and the
lowest entry. Any producer meeting this condition shall be eligible to receive thepayments.
(ii) The amount of such payments shall compensate for less than seventy per cent (70%)
of the producer’s income loss in the year the producer becomes eligible to receive this
assistance.
(iii) The amount of any such payments shall re late solely to income; it shall not relate to
the type or volume of production (including livestock units) undertaken by the
producer; or to the prices, domestic of international, applying to such production; or
to the factors of production employed.
(iv) Where a producer receives in the same year payments under this paragraph and under
paragraph 8 (relief from natural disasters), the total of such payments shall be less
than one hundred per cent (100%) of the producer’s total loss.
7. Payments (made either directly or by way of government financial participation in crop
insurance schemes) for relief from natural disasters
(i) Eligibility for such payments shall arise only following a formal recognition by the
foreign government authorities that a natural or like disaster (including disease
outbreaks, pest infestations, nuclear accidents, and war on the territory of the country
of export or origin) has occurred or is occurring; and shall be determined by aproduction loss which exceeds thirty per cent (30%) of the average of production in
the preceding three-year period or a three-year average based on the preceding five-
year period, excluding the highest and the lowest entry.
(ii) Payments made following a disaster shall be applied only in respect of losses of
income, livestock (including payments in connection with the veterinary treatment of
animals), land or other production factors due to the natural disaster in question.G/SCM/N/1/PHL/2
Page 21
(iii) Payments shall compensate for not more th an the total cost of replacing such losses
and shall not require or specify the type or quantity of future production.
(iv) Payments made during a disaster shall not exceed the level required to prevent or
alleviate further loss as defined in criterion (b) above.
(v) Where a foreign producer receives in the same year payments under this paragraph
and under paragraph 6 (income insurance and income safety-net programmes), the
total of such payments shall be less than one hundred per cent (100%) of the foreign
producer’s total loss.
8. Structural adjustment assistance provided through producer retirement programmes
(i) Eligibility for such payments shall be determined by reference to clearly defined
criteria in programmes designed to facilitate the retirement of persons engaged in
marketable agricultural production, or their movement to  non-agricultural activities.
(ii) Payments shall be conditional upon the total and permanent retirement of the
recipients  from marketable agricultural production. 
9. Structural adjustment assistance provid ed through resource retirement programmes
(i) Eligibility for such payments shall be determined by reference to clearly defined
criteria in programmes designed to remove land or other resources, including
livestock, from marketable agricultural production.
(ii) Payments shall be conditional upon the retirement of land from marketable
agricultural production for a minimum of three years, and in the case of livestock onits slaughter or definitive permanent disposal.
(iii) Payments shall not require or specify any alternative use for such land or other
resources which involves the production of  marketable agricultural products.
(iv) Payments shall not be related to either the type or quantity of production or to the
prices, domestic or international, applying to production undertaken using the land orother resources remaining in production  undertaken using the land or other resources
remaining in production.
10. Structural adjustment assistance provided through investment aids
(i) Eligibility for such payments shall be determined by reference to clearly-defined
criteria in government programmes designed to assist the financial or physical
restructuring of a producer’s operations in response to objectively demonstrated
structural disadvantages. Eligibility for such programmes may also be based on a
clearly-defined government programme for the reprivatization of agricultural land.
(ii) The amount of such payments in any given year shall not be related to, or based on,
the type or volume of production (including livestock units) undertaken by the
producer in any year after the base period other than as provided for under criterion
(v) below.
(iii) The amount of such payments in any given year shall not be related to, or based on,
the prices, domestic or international, applying to any production undertaken in any
year after the base period.G/SCM/N/1/PHL/2
Page 22
(iv) The payments shall be given only for th e period of time necessary for the realization
of the investment in respect of which they are provided.
(v) The payments shall not mandate or in any way designate the agricultural products to
be produced by the recipients except to require them not to produce a particular
product.
(vi) The payments shall be limited to the am ount required to compensate for the structural
disadvantage. 
11. Payments under environmental programmes
(i) Eligibility for such payments shall be determined as part of a clearly-defined
government environmental or conservation programme and be dependent on the
fulfilment of specific conditions under the government programme, including
conditions related to production methods or inputs.
(ii) The amount of payment shall be limited to  the extra costs or loss of income involved
in complying with the government programme.
12. Payments under regional assistance programme
(i) Eligibility for such paymen ts shall be limited to producers in disadvantaged regions.
Each such region must be a clearly designated contiguous geographical area with a
definable economic and administrative identity, considered as disadvantaged on the
basis of neutral and objective criteria clearly spelt out in law or regulation andindicating that the region’s difficulties arise out of more than temporary
circumstances.
(ii) The amount of such payments in any given year shall not be related to, or based on,
the type or volume of production (including livestock units) undertaken by the
producer in any year after the base period other than to reduce that production.
(iii) The amount of such payments in any given year shall not be related to, or based on,
the prices, domestic or international, applying to any production undertaken in any
year after the base period.
(iv) Payments shall be available only to producers in eligible regions, but generally
available to all producers within such regions.
(v) Where related to production factors, payments shall be made at a degressive rate
above  a threshold level of the factor concerned.
(vi)  The payments shall be limited to the extra costs or loss of income involved in
undertaking agricultural production in the prescribed area. 
Section 4.  Initiation of Action
(a) Information and other forms of assistance to the domestic industry:
The Secretary and the Commission shall, upon request, make available to the public general
information concerning the countervailing measure and other forms of trade remedies.  SuchG/SCM/N/1/PHL/2
Page 23
information may include the procedures to be followed and the appropriate dates or
milestones in investigations related to the imposition of such measures.
The Secretary and the Commission shall also provide, to the extent possible at all stages of
the action, assistance  and advice to interested parties which seek to obtain the remedies andbenefits of the countervailing measure, such assistance and advice to include the following:
1. Information on import volumes and values, at the specific product level;2. Information on prices and costs of production in other countries, and other relevant
information known to the Secretary and the Commission; and
3. Informal legal and technical advice on the appropriateness of invoking the
countervailing measure as a remedy for the trade problem, and on the availability of
information in support of the proposal.
Philippine trade, agriculture or finance attaches and other consular officials or attaches in the
countries of export or origin may be requested to furnish the applicant pertinent information
or documents related to the allegedly  subsidized product within a period not exceeding forty-
five (45) days from receipt of a request.
The Department and the Commission shall coordinate with their representatives in other
countries and/or tap other information sources in building a database of these information.
Receipt of these forms of assistance shall not be construed as a guarantee that the recipient
will prevail in the countervailing investigation.
(b) Petitioners
1. Any person whether natural or juridical, representing a domestic industry may file a
written application using the pro-forma protestant’s questionnaire, duly supported by
relevant documents which shall include evidence of (a) the subsidy, and if possible,
the kind and amount of such subsidy, (b) injury, and (c) causal link between
the importation of the allegedly subsidized products and the alleged injury.  Theapplicant shall submit four (4) copies of the application, including annexes, two (2)
copies of which shall contain the non-confidential summaries of the  information
submitted.  Simple assertions, unsubstantiated by relevant evidence, cannot be
considered sufficient to meet the requirements of this paragraph.
2. A properly documented application shall contain relevant evidence and information
reasonably available to the applicant on the following:
(i) identity of the applicant and a description of the volume and the value of his
domestic production of the like product;
(ii) a list of all known domestic producers of the like product and, if possible, a
description of the volume and value of domestic production of the like
product accounted for by such producers, if the application is made on behalf
of the domestic industry,
(iii) complete description of the allegedly subsidized product;(iv) name of the country of export or origin of the allegedly subsidized product;G/SCM/N/1/PHL/2
Page 24
(v) identity of each known foreign exporter or producer of the allegedly
subsidized product, or their duly authorized representative organizations;
(vi) list of known persons importing the allegedly subsidized product with their
last known address;
(vii) estimated aggregated or cumulative quantity, the port and the date of arrival,
the import entry declaration  of the allegedly subsidized product;
(viii) the nature, extent and estimated amount of the subsidy in question;
(ix) number of persons employed in the affected domestic industry;
(x) total capital invested, production and sales volume, and aggregate production
capacity of the domestic industry;
(xi) effect of the price of the allegedly subsidized products on the price of the like
product in the domestic market; and
(xii) consequent impact of the importation  of the allegedly subsidized products 
on the domestic industry demonstrated by relevant factors and indices havinga bearing on the state of the domestic industry as enumerated in Section 12 of
this IRR.
3. The application shall include a certification signed by the applicant that the
information presented therein are accurate and complete to the best of his knowledge.
(c) Filing of a Petition
1. The duly accomplished application, using the pro-forma protestant’s questionnaire,
shall be filed with the Secretary of Trade and Industry in the case of a non-
agricultural product, or with the Secretary of Agriculture in the case of an agricultural
product.
2. Within three (3) days from the receipt of the application, the Secretary shall notify the
Secretary of Finance  and furnish him with a complete copy or summary of the
application, or of the information supporting a countervailing action in case the
Secretary initiates the investigation on his own motion. 
The Secretary of Finance shall inform the Commissioner of Customs, within three (3) days
from receipt of the  notice by the Secretary as defined in the preceding paragraph, of the filing
and pendency of the application or  information for countervailing action and instruct him to
secure such import entries without liquidation until the end of the investigation.  TheCommissioner of Customs shall gather and furnish the Secretary, within five (5) days from
receipt of the instructions of the Secretary of Finance, certified true copies of all import
entries and relevant  documents covering such allegedly subsidized product imported into the
Philippines during the last twelve (12)  months preceding the date of application. He shall
likewise make similar additional reports on the number, volume, and value of the importationof the allegedly subsidized product to the Secretary every ten (10) days thereafter.  However,
under no circumstances shall a countervailing investigation hinder the implementation of the 
procedures for Customs clearance.G/SCM/N/1/PHL/2
Page 25
3. The Secretary shall preliminarily screen the application if the following conditions
are met:
(i) The application is signed;
(ii) All relevant questions are answered or the reasons for the absence of
information are given;
(iii) The attachments to the application are complete; and
(iv) The application is supported by a sufficient part of the Philippine industry
producing the like product. 
4. Failure to supply all the information sought in the application will lead to the non-
acceptance thereof. The Secretary shall check the consistency of the information
provided in the application against other information available to him. The Secretary
shall clarify any unclear or ambiguous statement with the applicant.
5. As soon as the requirements are completed, the Secretary shall acknowledge in
writing that he has already  accepted a properly documented application.  The date of
the Secretary's letter shall be considered as day zero  (0) of the ten (10) days within
which he is required to determine whethe r there is sufficient evidence to justify
the initiation of an investigation.  The Secretary shall issue the letter as soon as
practicable from his receipt of a properly documented application. If the applicant
decides to give the Secretary further information in support of an application, the ten
(10) day period herein mentioned shall recommence from the date of the submission
of the  new information.  After this period, the Secretary shall no longer entertain anyinformation that may be provided by the applicant.
(d) Requirements for Initiation
1. The Secretary shall, within ten (10) days from the date of his letter accepting the
properly documented application referred to in Section 3.c.5, examine the accuracy
and adequacy of the petition to determine whether there is sufficient evidence tojustify the initiation of an investigation.  The evidence of both subsidization
and injury shall be considered simultaneously (a) in the decision on whether or not to
initiate an investigation, and (b) thereafter, during the course of the investigation,
starting at the earliest date when provisional measures may be applied.
In assessing the sufficiency of evidence provided in the application, the Secretary will only
satisfy himself that there is evidence that indicates subsidization or the likelihood of
subsidization, and material injury based on the evidence  submitted by the applicant.
If there is no sufficient evidence to justify the initiation of an investigation, the Secretary shall
dismiss the petition and notify the Secretary of  Finance, the Commissioner of Customs and
other parties concerned regarding such dismissal.
2. An investigation shall not be initiated unless it has been determined that the
application has been made "by or on behalf of the domestic industry.” The applicationshall be considered to have been made "by or on behalf of the domestic industry" if it
is supported by those domestic producers whose collective output constitutes more
than fifty per cent (50%) of the total production of the like product produced by that
portion of the domestic industry expressing either support for, or opposition to, theG/SCM/N/1/PHL/2
Page 26
application.  In cases involving an exceptionally large number of producers, the
degree of support and opposition may be determined by using a statistically valid
sampling technique or by consulting their representative organizations
3. No investigation shall be initiated when domestic producers expressly supporting the
application account for less than twenty five per cent (25%) of total production of the
like product produced by the domestic industry.
4. In exceptional circumstances, the Philippi nes may be divided into two (2) or more
competitive markets and the producers within each market may be regarded as a
separate industry if (a) the producers within such market have the dominant market
share and (b) the demand in such market is not substantially supplied byother producers elsewhere in the Philippines.
5. If in special circumstances, the Secretary decides to initiate an investigation without
having received a written application by or on behalf of a domestic industry for the
initiation of such investigation, he shall proceed only if he has sufficient evidence ofthe existence of a subsidy, material injury, and a causal link to justify the initiation
of an investigation.
These special circumstances may involve, among others:
(i) The absence of a national organization of producers, if there are many small-
scale producers of the like product  which cannot be regarded as a separate
industry under the criteria set forth in Section 4.d.4 of this IRR;
(ii) The inability of a national or local organization of producers to file an
application due to limited resources; or
(iii) The presence of a national or local emergency which prevents the affected
domestic industry from filing a petition. 
6. All persons having or against whom any right to relief with respect to the alleged
subsidy may, upon the  discretion of the Secretary or the Commission, join as
petitioners or be joined as respondents in one (1) petition,  where any question of lawor fact common to all such petitioners and respondents may arise in such  
countervailing action. 
Section 5.  Notice to and Consultation with the Government of the Country of Export or Origin
Upon his acceptance of a properly documented application and before proceeding to initiate
an investigation, the Secretary shall notify the govern ment of the country of export or origin about the
impending countervailing investigation and provide it a copy of the non-confidential summary of the
application.  However, the Secretary shall refrain from publicizing the application for the initiation of
the investigation before a decision has been made to do so.
Upon notification, the government of the country of export or origin shall also be invited for
consultation with the objective of clarifying the situation as to matters referred to in the application,
and arriving at a mutually agreed solution.  Reasonable opportunity for continued consultation shall
be provided throughout the investigation period.  No affirmative determination whether preliminary orfinal shall be made without having reasonable opportunity for consultation.  The government of the
country of export or origin concerned shall, upon request, be permitted access to non-confidential
evidence, including the non-confidential summary of  confidential data  being used for initiating or
conducting the investigation. G/SCM/N/1/PHL/2
Page 27
Section 6.  Notice to Concerned Parties and Submission of Evidence
(a) Within four (4) days after he makes the decision to initiate a preliminary
investigation, the Secretary shall cause the publication of the notice of initiation ofpreliminary investigation in two (2) newspapers of general circulation.  The date of
publication shall be considered as day one (1) of the initiation of the investigation.
The public notice of the initiation of an investigation shall contain, unless otherwise
made available through a separate report, adequate information on the following
matters:
(i) The nature of the allegedly subsidized product;
(ii) The country concerned;
(iii) A summary of the particulars of the injury and basis of the alleged
subsidization in the application;
(iv) The time period for the submission of evidence or views to the Secretary;(v) The date of the initiation of the investigation; and(vi) The address to which representations by interested parties shall be directed.
(b) Within five (5) days from the initiation of the investigation and after having notified
the country of export or origin, the Secretary shall:
(i) Identify all known interested parties i.e. importer, foreign exporter and/or
producer, and notify them of the initiation of the investigation;
(ii) Furnish them with a copy of the initiation report, petitioner's application, and
its annexes, subject to the requirement to protect confidential information;
and
(iii) Provide them with a pro-forma respondent’s questionnaire. 
The respondent is required to submit within thirty (30) days from the receipt of such
notice the completed pro-forma respondent’s questionnaire and other evidence andinformation to dispute the allegations contained in the application.
In cases where the number of known interested parties is so large that it is impractical
to provide a non-confidential copy of the documents to each of them, a copy will be
given to the government of the country of export or origin and to the representativeorganizations.  These documents shall also be made available to other interested
parties involved upon request.
The notice shall be deemed to have been received one (1) week from the date on
which it was sent by registered mail or transmitted by fax to the respondent or theappropriate diplomatic or official represen tative of the country of export or origin.G/SCM/N/1/PHL/2
Page 28
Philippine trade or agriculture attaches and other consular officials in the concerned
country of export or origin may also be provided a copy of the notice of initiation, the
non-confidential application, and the pro-forma respondent’s questionnaire.
(d) The Secretary and the Commission shall provide opportunities for industrial users of
the allegedly subsidized product, and for representative consumer organizations in
cases where such product is commonly sold at the retail level, to provide information
which is relevant to the investigation.
(e) The pro-forma respondent’s questionnaire shall be used by both the Secretary and the
Commission in their respective inquiries.  Whenever any interested party fails to
respond adequately to such questionnaire, is unable to produce information requested,refuses access to, or otherwise fails to provide any other information within the
period allowed for the investigation, or otherwise significantly impedes the
investigation, the preliminary or final determination of the conditions required in a
countervailing investigation shall proceed on the basis of facts available.  Even
though the information provided by an interested party may not be complete in allrespects, this shall not be disregarded provided the interested party is deemed to have
acted to the best of his ability.
(f) If any evidence or information is not accepted by the Secretary, the supplying party
shall be informed forthwith of the reason/s therefor, and may, where deemedwarranted by the Secretary, be given an opportunity to explain or provide further
evidence or information:  Provided, That  this will not impede the investigation
considering the period required for the Secretary to make a preliminary
determination.  If the additional submissions are not satisfactory, the reasons for the
rejection of such evidence or information shall be given in the report containing thepreliminary determination.
(g) Information which is confidential, either by nature or which is provided on a
confidential basis, shall not be disclosed without the express permission or consent of
the supplying party.  The interested parties providing confidential information shall
be required to provide two (2) copies of non-confidential summaries thereof to be
placed in a public file and made available to all interested parties upon the initiationof the investigation.  These summaries shall contain sufficient details to permit a
reasonable understanding of the confidential information to enable other parties to
respond to claims based on such information.  In exceptional circumstances, wherein
summarization of confidential information is not possible, the supplying party must
state the reason why it cannot be provided.  Where any request for confidentiality isnot warranted or the supplier of the information is either unwilling to make the
information public or to authorize its disc losure in summary form, such information
may be disregarded, unless it can be shown from appropriate sources that the
information is correct.
The following information may be considered  confidential if so designated by the
supplying party:
1. Business or trade secrets concerning the nature of the product or the
production process;
2. Production costs but not the identities  of the production components, unless
these are trade secrets; G/SCM/N/1/PHL/2
Page 29
3. Distribution costs but not the channels of distribution;
4. Terms of sale but not those offered to the public;   
5. Prices of individual sales, likely sales, or other offers but  not components of
prices, such as transportation, if based on published schedules, dates of sale,
order numbers, or product descriptions (other than business or trade secrets
described in (1);
6. Names of particular customers, distributors, or suppliers but not destinations
of sale or designation of type of customer, distributor or supplier, unless the
destination or designation would reveal the name; 
7. Exact amount of the benefit applied for or received by a person or business
entity from each of the subsidy programmes under investigation or review,
but not descriptions of the operations of such programmes, or the amount
included in official public statements or documents or publications, or thecountervailable subsidy rate calculated for each country; 
8. Names of particular persons from whom confidential information was
obtained; and 
9. Any other specific business information which, if released to the public,
would cause substantial harm to the competitive position of the supplying
party.
(h) In order to verify information contained in  the application or to obtain further details,
the Secretary may conduct visits or ocular inspections of the facilities of the domestic
producers and importers, as well as the government of the country of export or
origin.  The Secretary may also visit other such parties that have not provided
submissions during the investigation.
(i) A public file shall be maintained by the Secretary and the Commission for all
investigations initiated.  It shall contain a copy of all submissions from interestedparties and all relevant correspondences concerning the investigation, subject to
confidentiality considerations.  The public file will be made available to any
interested party upon request. 
The following will normally be considered as public information:
1. Factual information of a type that has been published or otherwise made
available to the public by the supplying party;
2. Factual information that is not designated as confidential by the supplying
party;
3. Factual information that although designated as confidential by the supplying
party:
(i) is in a form that cannot be associated with a particular party; or 
(ii) has been determined by the authorities as not deserving confidential
treatment;G/SCM/N/1/PHL/2
Page 30
4. Publicly available laws, regulations, decrees, orders and other official
issuances of a country; and
5. Written arguments relating to the investigation that is not designated as
confidential.
(j) The preliminary findings of the Secretary, if affirmative, together with the records of
the case, shall be transmitted to the Commission for its immediate formal
investigation within three (3) days from adopting the decision.  However, if the
preliminary findings of the Secretary are negative, the case shall be dismissed. 
Section 7.  Preliminary Determination
(a) Not later than twenty (20) days from r eceipt of the answer of the respondents and
other interested parties, the Secretary sha ll make a preliminary determination of the
need for the imposition of a provisional countervailing duty on the basis of theapplication, the answers of the respondents, and the respective supporting documents
or information.
(b) The Secretary shall essentially dete rmine the following in the preliminary
determination:
1. Nature and amount of the specific subsidy being enjoyed by the allegedly
subsidized product in the country of export or origin;
2. Presence and extent of material injury or threat of material injury to the
domestic industry producing the like product or the material retardation of the
growth or prevention of the establishment of a domestic industry producing
the like product; and
3. Causal relationship between the allegedly subsidized product and the material
injury or threat of material injury to the affected domestic industry or the
material retardation of the growth, or prevention of the establishment of adomestic industry producing the like product.
(c) The preliminary findings of the Secretary, together with the records of the case, shall
be transmitted to the Commission for its immediate formal investigation within three
(3) days from adopting the decision. 
Section 8.  Appraisement and Delivery of Products Upon Filing of Provisional Countervailing
Duty.
(a) If the preliminary finding of the Secretary is affirmative and to prevent further injury
during the investigation, the Secretary shall immediately issue through the Secretary
of Finance, written instructions to th e Commissioner of Customs to collect the
provisional countervailing duty in the form of a cash bond, in addition to any other
duties, taxes and charges imposed by law on the allegedly subsidized product.
(b) Within three (3) days from receipt of instructions from the Secretary of Finance to
impose the cash bond, the Commissioner of Customs shall instruct the Collector of
Customs to collect the regular duties, taxes and other charges, if any, on the shipment
involved so that such regular duties could be paid together with the cash bond.  TheG/SCM/N/1/PHL/2
Page 31
Commissioner of Customs may only authorize the release of the allegedly subsidized
product after the regular duties have been paid and the cash bond has been deposited.
(c) The cash bond shall be deposited with a government depository bank and shall be
held in trust for the respondent who posted the bond.
(d) The posting of the cash bond shall only be required no sooner than sixty (60) days
from the date of initiation of the investigation.  The date of the initiation of the
investigation shall be the date the Secretary publishes such notice in  two (2)
newspapers of general circulation.
(e) The provisional countervailing duty may be imposed for a period not exceeding four
(4) months.
(f) The relevant provisions of Section 18 of this IRR shall be followed in the application
of the provisional countervailing duty. 
Section 9.  Termination of Investigation
(a) The Secretary or the Commission, as the case may be, shall motu proprio  terminate
the investigation at any stage of the proceedings if the amount of the subsidy is de
minimis  or where the volume of the subsidized product, or the injury is negligible, as
defined in existing international trade agreements of which the Republic of the
Philippines is a party.
(b) A subsidy shall be deemed de minimis  if it is less than one per cent (1%) ad valorem
as a percentage of export price. For developing countries the threshold shall be twoper cent (2%) and for least developed countries, it is three per cent (3%).
(c) The volume of imports from a particular country shall normally be regarded as
negligible if it accounts for less than three per cent (3%) of the total imports of said
product in the Philippines, unless countries which individually account for less than
three per cent (3%) of the total imports of the said product in the Philippines
collectively account for more than seven per cent (7%) of the total imports of thatproduct.  On the other hand, the volume of imports from a developing country shall
be considered negligible if it accounts for less than four per cent (4%) of the total
imports of the product, unless such developing countries which individually account
for less than four per cent (4%) of the total imports of the product collectively
account for more than nine per cent (9%) of the total imports that product. 
Section 10.  Formal Investigation by the Commission
(a) Within three (3) working days upon its re ceipt of the records of the case from the
Secretary, the Commission shall start the formal investigation and shall accordinglynotify in writing all parties on record and, in addition, give public notice of the exact
initial date, time and place of its formal investigation through the publication of such
particulars, and a concise summary of the application, in two (2) newspapers of
general circulation.
(b) The Commission shall conduct the formal investigation to determine the following:
1. If the domestic product is identical or alike in all respects to the allegedly
subsidized product, or in the absence of  the former, another product which,G/SCM/N/1/PHL/2
Page 32
although not alike in all respects, has characteristics closely resembling those
of the allegedly subsidized product.
2. If the foreign exporter or producer of the allegedly subsidized product is
conferred benefits through the implementation of a specific subsidyprogramme by the government of the country of export or origin;
3. The presence and extent of material injury or the threat thereof to the
domestic industry, or the material retardation of the growth or prevention of
the establishment of a domestic industry producing the like product;
4. The existence of a causal relationship between the allegedly subsidized
product and the material injury or threat of material injury to the affected
domestic industry, or the material retardation of the growth, or the prevention
of  the establishment of a domestic industry producing the like product;
5. The countervailing duty to be imposed; and6. The duration of the imposition of the countervailing duty.
(c) The Commission shall require all interested parties to appear for a preliminary
conference on the schedules and procedure of the investigation, the nature of theadministrative and fact-finding proceedings, the non-applicability of the technical
rules of procedures provided by the Rules of Court, the non-availability of
confidential information, and other related matters relative to the speedy disposition
of the case and shall require them to submit their respective initial memoranda or
position papers within fifteen (15) working days from notice.
(d) The formal investigation shall be conducted in a summary manner. No dilatory tactics
or unnecessary or unjustified delays shall be allowed and the technical rules of
evidence used in regular court proceedings shall not be applied.
(e) The Commission shall, after due notification, conduct a public consultation to give all
parties directly affected and such other interested parties that in the judgment of the
Commission are entitled to attend, an opportunity to be heard and to present evidencebearing on the subject matter.  The purpose of this public consultation is to determine
whether or not the allegedly subsidized product is imported at a lesser price due to the
advantage from the direct or indirect subsidy, and by reason thereof, the domestic
industry producing the like product is being injured materially.
(f) Where the information provided in the pro-forma questionnaires submitted by the
protestant and respondent are insufficient, the Commission may require the
submission of additional information from the applicant/s, domestic producers,
importers, foreign exporters or producers, that may be useful in the overall evaluation
of the case.
(g) The Commission shall require any interested party to allow it access to, or otherwise
provide, necessary information to enable the Commission to expedite the
investigation.  The Commission may conduct on-site investigations of the domestic
producers, importers, foreign exporters or producers concerned, as well as thegovernments of the countries of export or origin, including ocular inspections of their
facilities, to verify information provided or obtain further details.  The Commission
may also visit such other parties who have not provided a submission to theG/SCM/N/1/PHL/2
Page 33
investigation.  Visits or inspections may be conducted by the Commission even
without the presence of interested parties.
In the case of an on-site investigation involving a foreign exporter or producer, the
Commission shall obtain the agreement of the firms concerned.  As soon as theagreement of the parties has been confirmed, the Commission shall notify the
government of the country of export or origin of the names and addresses of the
parties to be visited and the dates agreed upon.  Sufficient advance notice shall be
given to the parties in question before the visit is made.
Prior to the visit, these firms shall be advised of the general nature of the information
to be verified and of any further information which needs to be provided, althoughthis shall not preclude requests to be made on the spot for further details to be
provided in the light of information obtained.  Inquiries or questions by the
Commission or the parties shall, whenever possible, be answered before the visit is
made.  The Commission shall make the results of such on-site investigation available
to such parties subject to the requirements of protecting confidential information.
The procedures described above shall also apply to on-site investigations carried out
in the territory of countries other than the countries of export or origin.
(h) In case any or all of the parties on record fail to submit their answers to position
papers or to questionnaires within the prescribed period, the Commission shall base
its findings on the best information available.
(i) The relevant provisions of Section 6 of this IRR, especially those on the treatment of
confidential information and acceptance of ev idence, shall also be followed in the
formal investigation. 
Section 11.  Determination of the Existence of a Subsidy
(a) In general, the period of investigation (POI) for the determination of subsidization
shall cover import transactions made at least six (6) months prior to the date the
investigation is initiated: Provided, however, That this period shall coincide with thefinancial year applicable to Philippine industries whenever possible.  In some cases,
the POI may be adjusted to cover a shorter period in order to take into account other
considerations that will ensure the appropriateness of the chosen POI, e.g.,
availability of data, drastic increase in the importation of the subsidized product,
facility in the verification of data.
(b) The Secretary and the Commission shall make a determination regarding the
existence of a subsidy when:
1. The government in the country of export or origin of the imported product
extends financial contribution to the foreign exporter or producer of the
product, in the form of:
(i) A direct transfer of funds such as  a grant, loan or equity infusion; or
(ii) A potential direct transfer of funds or assumption of liabilities such
as loan guarantees; orG/SCM/N/1/PHL/2
Page 34
(iii) The foregone or uncollected government revenue that is otherwise
due from the foreign exporter or producer of the product: Provided,
however, That the exemption of any exported product from duty or
tax imposed on the like product when destined for consumption in
the country of export or origin, or the refunding of such duty or tax,shall not be deemed to constitute a grant of a subsidy;  Provided,
further, That should a product be allowed drawback by the country of
export or origin, only the ascertained or estimated amount by which
the total amount of duties and/or internal revenue taxes was
discounted or reduced, if any, shall constitute a subsidy; or
(iv) The provision of goods or services other than general infrastructure;
or
(v) The government purchase of goods from the foreign exporter or
producer; or
(vi) The payments to a funding mechanism; or
(vii) Other financial contributions to a private body to carry out one or
more of the activities mentioned in subparagraphs (i) to (vii) above;
or
(viii) Direct or indirect income or price support; and
2. When there is a benefit conferred.
For the purpose of this section, “government” shall refer to the national,
provincial, state, municipal, regional or other authorities of a foreign country
or a body that exercises authority for an association of nations, or a state
owned-or controlled corporation, or any other public body.
(c) In the determination of whether or not a subsidy is specific, the Secretary and the
Commission shall apply the following principles:
1. Where the government in the country of export or origin of the imported
product explicitly limits access to the subsidy to certain enterprises, such
subsidy shall be specific;
2. Where such government through a law or regulation establishes objective
criteria and conditions governing the eligibility for, and amount of a subsidy,
specificity shall not exist:  Provided, however, That the eligibility is
automatic and that such criteria or conditions are strictly adhered to. 
Objective criteria shall mean those which are neutral, do not favour certainenterprises over others, and are economic in nature and horizontal in
application, such as the number of employees or size of the enterprise;
3. In case a subsidy in law appears to be non-specific according to
subparagraphs (1) and (2) above, but there are reasons to believe that thesubsidy may in fact be specific, factors that may be considered are:
(i) The use of a subsidy programme by a limited number of certain
enterprises for a relative ly longer period;G/SCM/N/1/PHL/2
Page 35
(ii) The grant of a disproportionately large amount of subsidy to certain
enterprises, and the exercise of wide and unwarranted discretion for
granting a subsidy; and
4. A  subsidy which is limited to certain enterprises located within a designated
geographical region within the territory of the government in the country of
export or origin shall be specific.  The setting or change of generally
applicable tax rates by all levels of government entitled to do so shall not be
deemed to be specific subsidies.
(d) Notwithstanding the provisions of the preceding paragraph, the following subsidies
shall be deemed to be specific:
1. Subsidies contingent, in law or in fact, whether solely or as one of several
other conditions, upon export performance;  and
2. Subsidies contingent, whether solely or as one of several other conditions,
upon the use of domestic over imported goods.
Subsidies shall be considered to be contingent in fact upon export performance when
it is demonstrated that the granting of subsidy is tied to actual or anticipatedexportation or export earnings.  The mere fact that a subsidy is provided to enterprises
which export shall not for that reason alone be considered to be an export subsidy.
(e) Any determination of specificity under this Section shall be clearly substantiated on
the basis of positive evidence.
(f) The countervailing duty shall be equal to the full amount of the subsidy ascertained
by the Secretary or the Commission, as the case may be, which is equal to the cost
incurred by the government, or the benefit conferred on the recipient of the subsidy in
accordance with the following guidance:
1. The provision of equity capital by a foreign government shall not be
considered as conferring a benefit, unless the investment decision can be
regarded as inconsistent with the usual investment practice (including the
provision of risk capital) of private investors in the country of export or
origin;
2. The provision of a loan by a foreign government shall not be considered as
conferring a benefit, unless there is a difference between the amount that the
firm receiving the loan pays on the government loan and the amount the firm
would pay on a comparable commercial loan that the firm could actually
obtain on the market.  In this case, the benefit to the recipient shall be deemedto be the difference between those two amounts;
3. The provision of a loan guarantee by a foreign government shall not be
considered as conferring a benefit, unless there is a difference between the
amount that the firm receiving the guarantee pays on a loan guaranteed by thegovernment and the amount that the firm would pay on a comparable
commercial loan without the government guarantee. In this case, the benefit
to the recipient shall be deemed to be the difference between those two
amounts adjusted for any difference in fees;G/SCM/N/1/PHL/2
Page 36
4. The provision of goods or services, or the purchase of goods by a foreign
government shall not be considered as conferring a benefit unless the goods
or services are provided for less than adequate remuneration, or the goods or
services are purchased for more than adequate remuneration.  The adequacyof remuneration shall be determined in relation to prevailing market
conditions in the country of export or origin for the goods and services in
question, taking into account price, quality, availability, marketability,
transportation and other conditions of purchase or sale.
(g) The amount of the countervailable subsidies shall be determined based on the unit of
the subsidized product that is imported, whenever practicable. This provision,however, will not preclude the Commission from using other methods of estimating
the margin of subsidization.
In the case of an imported product processed from an input, on which the demand for
the input is substantially dependent on the demand for the imported product and theprocessing operation adds only limited value to the imported product, countervailable
subsidies to be provided to either producers or processors of the input shall be
deemed to be provided with respect to the production or exportation of the imported
product:  Provided, however, That the input is physically consumed in the production
of the imported product, with normal allowance for waste:  Provided, further, That itcan be established that the subsidies to the input actually benefited the producer or
exporter of the imported product:  Provided, finally, That in the case of subsidies in
the form of indirect tax rebates and duty drawbacks, the provisions of Annex II of the
WTO Agreement on Subsidies and Countervailing Measures shall apply.
(h) Where the Secretary or the Commission, as the case may be, is satisfied that
sufficient information has not been furnished or is not available to ascertain the
amount of subsidy, such amount shall be determined based on all verifiable
information available to the Secretary or the Commission. 
Section 12.  Determination of Material Injury or Threat Thereof
(a) The Secretary and the Commission shall determine the presence and extent of
material injury to the domestic industry as a result of the importation of the
subsidized products on the basis of positive evidence and shall require an objective
examination of, but shall not be limited to, the following:
1. The rate of increase and amount of the importation of the subsidized
products, either in absolute terms or relative to production or consumption in
the domestic market;
2. The effect of the importation of the subsidized products on the prices in the
domestic market for the like product, that is, whether there has been a
significant price undercutting by the subsidized products as compared with
the price of the like product in the domestic market, or whether the effect of
such subsidized products is otherwise to depress prices to a significant degree
or to prevent price increases which otherwise would have occurred to
a significant degree.  Price depression shall refer to the extent by which the
domestic producer reduced its selling price in order to compete with the
subsidized product, while price suppression shall refer to the extent by which
the subsidized product prevented the domestic producer from increasing itsG/SCM/N/1/PHL/2
Page 37
selling price to a level that will allow full recovery of its cost of production;
and
3. The effect of the importation of the subsidized products on the domestic
producers or the resulting retardation of the growth or prevention of the
establishment of a domestic industry producing the like product, including an
evaluation of all relevant economic factors and indices having a bearing on
the state of the domestic industry concerned, such as, but not limited to,
actual or potential decline in output, sales, market share, profits, productivity,
return on investments, or utilization of capacity; factors affecting domestic
prices; the magnitude of subsidization; and actual and potential negative
effects on cash flow, inventories, empl oyment, wages, growth, and ability to
raise capital or investments.  This list is not exhaustive, nor can one or
several of these factors necessarily give decisive guidance.
(b) The extent of injury caused by the importation of the subsidized products on the
domestic industry shall be determined by the Secretary and the Commission upon
examination of all relevant evidence.  All known factors other than the importation of
the subsidized product which, at the same time injure the domestic industry, shall also
be examined and the injuries caused by these factors must not be attributed to the
subsidized products.  The relevant  evidence may include, but shall not be limited to,
the following:
1. the volume and value of non-subsidized imports of the product concerned;
2. contraction in demand or changes in consumption patterns;
3. trade restrictive practices and competition between foreign and domestic
producers;
4. developments in technology; and
5. export performance and productivity of the domestic industry.
(c) The effect of the importation of the subsidized products shall be assessed in  relation
to the domestic production of the like product by separate identification of that
production based on such criteria as production processes, sales and profits.  If such is
not possible, the effect of the importation of the subsidized products shall be assessed
by the examination of the production of the narrowest group or range of products
which includes the like product for which the necessary information is available.
(d) A determination of a threat of material injury shall be based on facts and not mere
allegation, conjecture or remote possibility.  The change in circumstances creating a
situation in which the importation of the subsidized product will cause injury must be
clearly foreseen and imminent.  In making a determination regarding the existence of
a threat of material injury, the following shall be considered collectively, inter alia ,:
1. The nature of the subsidy in question and the trade effects likely to arise
therefrom;
2. A significant rate of increase in the importation of the subsidized products
into the domestic market indicating the likelihood of substantially increased
importations;G/SCM/N/1/PHL/2
Page 38
3. A sufficient freely disposable, or an imminent substantial increase in,
production capacity of the foreign exporter indicating the likelihood of
substantially increased subsidized exports in the domestic market, taking into
account the availability of other export markets to absorb any additional
exports;
4. Whether such subsidized products are entering at prices that will have a
significantly depressing or suppressing effect on domestic prices, and will
likely increase demand for further importation of the subsidized products;
and
5. Inventories of the product being investigated.
Not one of these factors can, by itself, necessarily give decisive guidance, but the
totality of the factors considered must lead to the conclusion that further importation
of subsidized products are imminent and that, unless protective action is taken,
material injury would occur.  In cases where injury is threatened by the importation of
subsidized products, the application of countervailing measures shall be considered
and decided with special care.
(e) In the case where the effect of the subsidized import will materially retard the growth
or prevent the establishment of a domestic industry, information on employment,
capital investments, production and sales, and the production capacity of the domestic
industry can be augmented or substituted by showing through a factual study, report
or other data that an industry which has potential to grow domestically is adversely
affected by the importation of the subsidized product.  For this purpose, the Secretary
shall direct the conduct of continuing studies to identify and determine the specific
industries, whether locally existing or not, which have the potential to grow or be
established domestically and whose growth or establishment will be retarded or
prevented by the importation of the subsidized product.
Section 13.  Voluntary Undertaking
(a) The countervailing investigation may be suspended or terminated without the
imposition of provisional measures or definitive countervailing duties upon the
recommendation of the Commission and acceptance by the Secretary, of a
satisfactory voluntary undertaking executed, under oath, by:
1. the foreign exporter and/or the producer that they will increase their prices or
will cease exporting to the Philippines at the subsidized price; or
2. the government of the country of export or origin that it will eliminate or
limit the subsidy or take other measures concerning its effects; thereby
eliminating the material injury to the domestic industry producing the like
product.
Price increases under such undertakings shall not be higher than necessary to
eliminate the injury from subsidization.  Parties that offer an undertaking shall be
required to provide a non-confidential version of such undertaking so that it may be
made available to interested parties.G/SCM/N/1/PHL/2
Page 39
(b) An undertaking shall neither be sought nor accepted unless a preliminary affirmative
determination of subsidization and injury caused by such subsidization has been
made..
(c) An undertaking may not be accepted if its acceptance is impractical, e.g., if the
number of actual or potential foreign exporters is too large or for other reasons,
including reasons of general policy.  The proponent of the undertaking shall be
informed of the reason for non-acceptance of the proposed undertaking and he shall
be given an opportunity to submit his comments.
Even if such undertaking is accepted, the investigation shall nevertheless be
continued and completed by the Commission if the government of the country of
export or origin so desires or upon the advice of the Secretary.  In such a case, the
undertaking shall automatically lapse in case of a negative finding.  However, in
instances where the negative determination is due in large part to the existence of a
price undertaking, the Commission may require that the undertaking be maintained
for at least two (2) years, unless the foreign exporter proves to the Commission that
the undertaking is no longer necessary.  In the case of an affirmative finding, the
undertaking shall continue for only as long as the need exists, and to the extent
necessary, to counteract the subsidization, but not to exceed five (5) years from the
date of the affirmative finding. 
Should the investigation be discontinued as a result of the acceptance of an
undertaking, this undertaking shall be effective for five (5) years from the date of the
acceptance thereof, unless the foreign exporter proves to the satisfaction of the
Commission that the undertaking is no longer necessary. 
(d) Undertakings may be suggested but no foreign exporter,  producer or government of
the country of export or origin shall be forced to enter into such an undertaking.
Failure of such parties to offer or accept an invitation for an undertaking shall in no
way prejudice the consideration of the case.  However, it may be determined that a
threat of injury is more likely to be realized if the importation of the subsidized
product continues.
(e) Upon acceptance by the Secretary of an undertaking, he shall request the Secretary of
Finance to issue written instructions to the Commissioner of Customs to suspend
collection of the provisional countervailing duty. 
(f) A foreign exporter, producer or government of the country of export or origin from
whom an undertaking has been accepted may be requested to provide periodic
information to ensure that the conditions of the undertaking have been fulfilled.  They
must ensure that future export prices are not less than the level agreed upon in the
undertaking.  If at any time the subsidized products are exported at a price lower than
that agreed to in the undertaking, consideration will immediately be given to applying
the provisional duty to the shipment, using the best information available in cases
where the investigation which led to the undertaking has not been concluded.  In case
of breach or withdrawal of an undertaking by any party, a definitive duty shall be
imposed in accordance with Section 18 of this IRR; Provided, that the investigation
which led to the undertaking was concluded with a final affirmative determination
and that the party concerned has been given an opportunity to comment, except where
he himself has withdrawn the undertaking.G/SCM/N/1/PHL/2
Page 40
(g) In case of a violation of an undertaking, the Secretary shall request the Secretary of
Finance to issue written instructions to the Commissioner of Customs authorizing the
collection of provisional or definitive duties, as the case may be, on subsidized
products exported to the Philippines not more than 90 days before the application of
the provisional duty except to importations in which provisional countervailing duties
have already been collected before the violation of the undertaking.
Section 14.  Cumulation of Importation
When the importation of products from more than one country are simultaneously the subject
of a countervailing investigation, the Secretary or the Commission may cumulatively assess the
effects of such subsidized products only if it is determined that:
(a) the amount of subsidy established in relation to the importation from each country is
more than the de minimis  as defined in Section 9  of this IRR;
(b) the volume of importation of such subsidized products from each country is not
negligible as defined in Section 9 of  this IRR; and
(c) a cumulative assessment of the effects of the importation of such subsidized products
is warranted in light of the conditions of competition between the imported products,
and the conditions of competition between the imported products and the like
products. 
Section 15. Report of the Commission and Submission of Final Determination to the Secretary.
(a) Before making a final determination, the Commission shall inform all interested
parties in writing of the essential facts under consideration and the initial findings as
contained in the draft report, giving due regard to the protection of confidential
information.  Such disclosure shall be made within three (3) days from the date of
completion of the draft report, after which the parties shall be given five (5) days
from notice to defend their interests in writing. 
(b) The Commission shall conclude its formal investigation and submit a report of its
findings, whether favorable or not, to  the Secretary within one hundred twenty (120)
days from receipt of the records of the case.  The Commission shall also furnish the
parties concerned with copies of its report. 
Section 16.  Imposition of the Countervailing Duty
(a) The Secretary shall, within ten (10) days from receipt of the affirmative final
determination by the Commission, issue a Department Order imposing a definitive
countervailing duty on the subsidized product, unless he has earlier accepted an
undertaking from the foreign exporter, producer or government of the country of
export or origin.  The Department Order shall become executory after the lapse of the
period for reconsideration in case no motion for reconsideration has been filed, and
upon a negative resolution of the motion for reconsideration in case the same has
been filed.  He shall furnish the Secretary of Finance with the copy of the Order and
request the latter to direct the Commissioner of Customs to collect, within three (3)
days from receipt thereof, the definitive countervailing duty, in addition to any other
duties, taxes, and charges imposed by law on such product.  The transmittal letter
shall state the date when the Order is expected to be executory.G/SCM/N/1/PHL/2
Page 41
Simultaneous with the issuance of the Department Order, the Secretary shall also
furnish copies of the same to the parties concerned.
(b) Upon receipt of the Order from the Secretary of Finance, the Commissioner of
Customs shall order the Collector of Customs concerned to proceed with the final
appraisement of the subsidized product.
(c) After the collection of the countervailing duty, the Commissioner of Customs shall
submit to the Secretary, through the Secretary of Finance, certified monthly reports
on the disposition of the cash bond and the amounts of the countervailing duties
collected.  In the case of a voluntary undertaking, the Commissioner of Customs shall
submit certified weekly reports on the customs value of the subsidized product that
are imported within the applicable period.
(d) In case a cash bond has been filed, the same shall be applied to the countervailing
duty assessed.  If the cash bond is in excess of the countervailing duty assessed, the
remainder shall be immediately returned to the importer, including interest earned, if
any: Provided, That no interest shall be payable by the government on the amount to
be returned.  If the assessed countervailing duty is higher than the cash bond filed, the
difference shall not be collected. 
(e) In case of a negative finding by the Commission, the Secretary shall issue, through
the Secretary of Finance, after the lapse of the period for the petitioner to appeal to
the Court of Tax Appeals, an Order for the Commissioner of Customs to immediately
release the cash bond to the importer. All the parties concerned shall also be duly
notified of the dismissal of the case. 
Section 17.  Period Subject to the Countervailing Duty
(a) A countervailing duty may be levied retroactively from the date the cash bond has
been imposed and onwards, where a final determination of injury is made, or in the
absence of provisional measures, a threat of injury has led to actual injury.
(b) Where a determination of threat of injury or material retardation is made,
countervailing duties may be imposed only from the date of determination thereof.
(c) Notwithstanding the preceding paragraph, a countervailing duty may be levied on the
subsidized product imported into the country not more than ninety (90) days prior to
the date of application of the cash bond, when the authorities have determined for the
subsidized product in question that the injury is caused by the massive importation of
the subsidized product within three (3) months from the initiation of the investigation
which, in light of the timing and the volume of the subsidized products and other
circumstances (such as a rapid build-up of inventories of the imported product), is
likely to seriously undermine the remedial effect of the definitive countervailing duty
to be applied:  Provided, That the importers concerned have been given an
opportunity to comment.
In determining whether the importation of the subsidized product is massive, the
Commission shall examine:
1. The volume and value of the importation of the subsidized products;
2. Seasonal trends; andG/SCM/N/1/PHL/2
Page 42
3. The share in the domestic market accounted for by the subsidized products. 
Section 18.  Application of the Countervailing Duty
(a) The amount of the countervailing duty shall not exceed the amount of the subsidy
that is found to exist under Section 12 of this IRR.
(b) The countervailing duty shall be collected, in the appropriate amounts on a non-
discriminatory basis, on imports of subsidized products from the countries in
question, except on those imports from which undertakings have been accepted.
(c) When the domestic industry has been defined as referring to producers in a certain
area as provided under Section 4.d.4 of this IRR, a countervailing duty shall be levied
only on the subsidized products consigned for final consumption to that area.
(d) In cases where products under investigation are not imported directly from the
country of origin but are exported through an intermediate country, the transactions
shall be regarded as having taken place between the country of origin and the
Philippines. 
(e) The countervailing duty shall be paid either through cash or cashier’s/manager’s
check.  All such monies collected shall be deposited by the Commissioner of
Customs in a special fund, to be known as the Trade Remedies Fund, created for that
purpose. 
Section 19.  Duration and Review of the Countervailing Duty
(a) As a general rule, the imposition of a countervailing duty shall remain in force only
as long as the need exists, and to the extent necessary, to counteract subsidization
which is causing or threatening to cause ma terial injury to the domestic industry or
material retardation of the growth or prevention of the establishment of such an
industry.
(b) The duration of the definitive countervailing duty shall not exceed five (5) years from
the date of its imposition, or from the date of  the most recent review if that review has
covered both subsidization and injury, unless the Commission has determined, in a
review initiated before that date on their own initiative or upon a duly substantiated
request made by or in behalf of the domestic industry at least six (6) months prior to
the termination date, that the termination of the countervailing duty will likely lead to
the continuation or recurrence of subsidization and injury.  The countervailing duty
shall remain in force pending the outcome of such an expiry review.
An expiry review shall be initiated when there is sufficient evidence that the expiry of
the definitive countervailing duty would likely result in a continuation or recurrence
of subsidization and injury.  Such a likelihood may be indicated, for example, by
evidence of continued subsidization and injury or evidence that the removal of injury
is partly or solely due to the existence of the duty or evidence that the circumstances
of the foreign exporters, or market conditions, are such that these would indicate the
likelihood of further injurious subsidization.
In carrying out investigations under this paragraph, the foreign exporters, the
representatives of the country of export or origin and the domestic producers andG/SCM/N/1/PHL/2
Page 43
importers shall be provided with the opportunity to comment on the matters set out in
the review request, and conclusions shall be reached with due account taken of all
relevant and duly documented evidence presented in relation to the question as to
whether the expiry of the definitive counte rvailing duty would be likely, or unlikely,
to lead to the continuation or recurrence of subsidization and injury. 
The Commission shall cause the publication of a notice of impending expiry of the
effectivity of the countervailing duty in two (2) newspapers of general circulation on
the first quarter of the final year of the period of application of the definitive
countervailing duty, to give the domestic producers adequate time to lodge a request
for an expiry review.
(c) The Commission may also, motu proprio  or upon the direction of the Secretary,
conduct an interim review of the need  for the continued imposition of the
countervailing duty, taking into consideration the need to protect the existing
domestic industry against subsidization.  Any interested party with substantial
positive information may also petition the Secretary for an interim review of the
continued imposition of the countervailing duty;  Provided, that at least one (1) year
has elapsed since the imposition of the countervailing duty
An interim review shall be initiated where the request contains sufficient evidence
that the continued imposition of the duty is no longer necessary to offset subsidization
and/or that the injury would be unlikely to continue or recur if the duty was removed
or varied, or that the existing duty is not, or is no longer, sufficient to counteract the
subsidization which is causing injury.
In carrying out investigations pursuant to this Section, the Commission may, inter
alia, consider whether the circumstances with regard to subsidization and injury have
changed significantly, or whether existing measures are achieving the intended
results, in removing the injury previously established.  In these respects, account shall
be taken of all relevant and duly documented evidence in the final determination.
(d) If the Commission determines that the countervailing duty is no longer necessary or
warranted, the Secretary shall, upon the recommendation of the Commission, issue a
Department Order immediately terminating the imposition of the countervailing
duty.  All parties concerned, including the Secretary of Finance and the
Commissioner of Customs, shall be notified accordingly of such termination.
(e) The provisions of this IRR regarding evidence and procedures, including the conduct
of public consultations and public hearings, shall apply to any review carried out
under this Section.  Any such review shall be carried out expeditiously and concluded
not later than one hundred fifty (150) days from the date of the initiation of such
review.
Section 20.  Motion for Reconsideration
(a) No motion for reconsideration shall be allowed on the imposition of provisional
measures under Section 8 of this IRR.
(b) A motion for reconsideration in writing, with proof of prior service to the opposing
parties, may be filed with the Secretary within fifteen (15) days from receipt of the
Department Order imposing the definitive countervailing duty, for one or more of the
following reasons affecting the substantial rights of said party:G/SCM/N/1/PHL/2
Page 44
1. Fraud, accident, mistake or excusable negligence which ordinary prudence
could not have guarded against and by reason of which such aggrieved party
has probably been impaired;
2. Newly discovered evidence, which the aggrieved party could not, with
reasonable diligence, have discovered and produced at the public
consultations, and which if presented would probably alter the result; or
3. The final countervailing duty imposed is excessive, or the evidence is
insufficient to justify the final order, or the order is contrary to law.
Such motion for reconsideration shall not be accepted without proof of service
thereof to affected parties.
(c) Upon receipt of the motion for reconsider ation, the Secretary shall transmit the same
within one (1) working day from receipt thereof to the Commission and the Secretary
of Finance. Comments of the affected parties to the motion for reconsideration may
be filed with the Commission within ten (10) days from receipt thereof. The
Commission shall resolve the motion for reconsideration within ten (10) days form
receipt of the comments of the opposing parties.  Thereafter, the Commission shall
transmit its report to the Secretary within one (1) working day from the date of the
report.
(d) Within three (3) days from receipt of the report of the Commission, the Secretary
shall issue a formal resolution on the motion for reconsideration based on the report
of the Commission and shall immediately notify the Secretary of Finance of said
resolution.
(e) No second motion for reconsideration shall be allowed. 
Section 21.  Judicial Review
(a) Any interested party in a countervailing investigation who is adversely affected by a
final ruling in connection with the imposition of a countervailing duty may file with
the Court of Tax Appeals, a petition for the review of such ruling within thirty (30)
days from his receipt of notice of the final ruling.
(b) The filing of such petition for review sh all not in any way stop, suspend, or otherwise
hold the imposition or collection, as the case may be, of the countervailing duty on
the subsidized product.  The rules of procedure on petitions for review filed with the
Court of Tax Appeals shall be applied. 
Section 22.  Public Notice
(a) The Secretary or the Commission shall inform in writing all interested parties on
record and, in addition, give public notice by publishing in two (2) newspapers of
general circulation when:
1. initiating an investigation;
2. concluding or suspending investigation;G/SCM/N/1/PHL/2
Page 45
3. making any preliminary or final determination whether affirmative or
negative;
4. making a decision to accept or to terminate an undertaking; and
5. terminating a definitive countervailing duty .
(b) The public notice shall contain, unless otherwise made available through a separate
report, adequate information on the following matters:
1. sufficient explanation on the matters of fact and law and, the reasons which
have led to the imposition of the measure, or the reasons for the acceptance of
the undertaking, or the reasons for the acceptance or rejection of relevant
arguments or claims made by the interested parties;
2. names of the supplying countries concerned;
3. description of the product;
4. margins of subsidization established and the full explanation of the reasons
for the methodology used;
5. considerations relevant to the injury determination; and
6. the main reasons leading to the determination. 
Section 23.  Administrative Support
(a) The Departments of Trade and Industry (DTI) and of Agriculture (DA) and the
Commission, shall create or designate a special unit within their agencies that will
undertake the functions relative to the disposition of countervailing cases.
(b) All countervailing duties collected shall be earmarked and deposited in the Trade
Remedies Fund which is created for the strengthening of the capabilities of these
agencies to undertake their responsibilities.
(c) The portion of the Trade Remedies Fund representing countervailing duties collected
on subsidized non-agricultural products shall be shared equally by the DTI and
Commission, while the portion of the Fund representing collections on subsidized
agricultural products shall be shared equally by the DA and the Commission.
(d) The Departments of Finance and Budget and Management, and the Bureaux of
Customs and Treasury, together with the DTI, DA, and the Commission, shall jointly
promulgate the procedures for the creation, management and utilization of the Trade
Remedies Fund. 
Section 24.  Repealing Clause
All rules and regulations, ordinances, executive or administrative orders and such other
presidential issuances related to countervailing duties which are inconsistent with any of the
provisions of RA 8751 and this IRR are here by repealed, amended or otherwise modified
accordingly. G/SCM/N/1/PHL/2
Page 46
Section 25.  Effectivity
This Order shall take effect seven  (7) days from publication of a notice of its issuance in a
newspaper of general circulation. 
Section 26. Separability Clause.
If any of the provisions of this IRR is declared invalid by a competent court, the remainder of
this Act or any provision not affected by such declaration of invalidity shall remain in force and effectG/SCM/N/1/PHL/2
Page 47
ANNEX A
OTHER AGRICULTURAL PRODUCTS NOT FALLING UNDER
CHAPTERS 1 TO 24 OF THE TARIFF AND CUSTOMS CODE
OF THE PHILIPPINES
HS Code or
headingProduct description
2905.43 Mannitol
2905.44 D glucitol (sorbitol)
33.01 Essential oils including concretes and absolutes;  and similar oils
35.01 Casein, caseinates and other casein derivatives;  casein glues
35.02 Albumins, albuminates and other albumin derivatives
35.03 Gelatin and gelatin derivatives
35.04 Peptones and their derivatives
35.05 Dextrins and other modified starches
3809.10 Finishing agents, dye carriers to accelerate the dyeing or fixing of dyestuffs and other
products and preparation, with a basis of amylaceous substances
3824.60 Sorbitol other than that of subheading No. 2905.44
41.01 Raw hides and skins of bovine or equine animals
41.02 Raw skins of sheep or lambs
41.03 Other raw hides and skins
43.01 Raw furskins (including tails, paws, etc.)
50.01 Silkworm cocoons suitable for reeling
50.02 Raw silk
50.03 Silk waste
51.01 Wool, not carded or combed
51.02 Fine or coarse animal hair, not carded or combed
51.03 Waste of wool or fine or coarse animal hair
52.01 Cotton, not carded or combed
52.02 Cotton waste
52.03 Cotton, carded or combed
53.01 Flax, raw or processed but not spun
53.02 True hemp, raw or processed but not spun
__________