Barter trade is back in Mindanao
The Duterte government is reviving the “barter” trade system in Mindanao with neighboring countries under the sub-regional grouping BIMP-EAGA (Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area) in an effort to create economic activities and livelihood for residents,
specifically those in the troubled areas of Sulu and Tawi-Tawi.
In Executive Order No. 64, signed by Executive Secretary Salvador C. Medialdea on Oct. 29, 2018, the President created the Mindanao Barter Council (MBC) to supervise the trade of goods as well as establish initial barter ports in Sulu and Tawi-Tawi where trade and customs rules will be enforced.
Under the barter system, imported goods valued under 110,000 will be exempted from national and local tax laws based on the President’s latest order.
Meanwhile, “national and local tax laws shall apply on all goods imported under this Order whose valuation as determined by appropriate authorities exceed the de minimis value of P10,000 or in such threshold amount as may be adjusted by the Secretary of Finance,” the EO stated.
"Consistent with the ten-point socioeconomic agenda of the Administration to promote rural and value chain development, the revival of barter in Mindanao will not only create jobs and business opportunities, but also streamed trade and commerce between and among member-states of the BIMP-EAGA," the EO stated.
The President has designated the Secretary of Trade and Industry (DTI) to head the MBC with the chair of the Mindanao Development Authority and commissioner of the Bureau of Customs as vice chairpersons.
The members of the MBC include representatives from the Departments of Finance, Foreign Affairs, Agriculture, DTI-Autonomous Region in Muslim Mindanao (DTI-ARMM), Maritime Industry Authority (MARINA), Philippine Coast Guard (PCG), and Philippine Ports Authority (PPA).
The MBC which will establish an office in Jolo, Sulu will "supervise, coordinate, and harmonize policies, programs and activities in the Southern Philippines.”
The BOC and the Bureau of Internal Revenue shall likewise establish offices in barter ports for systematic and streamlined processing of entry and exit of allowable barter goods.
"Goods traded under the barter system shall enter Philippine territory only through Barter Ports established for the purpose,” the EO provided.
“Products enjoying tariff protections and/or quantitive restrictions such as rice, corn and sugar as well as products requiring special import permits and/or subject to standard requirements shall remain to be regulated by applicable laws, rules and regulations,” it added.
Traders shall import or export only after securing the required clearances and licenses under existing laws.
Provided under BOL
Trade Secretary Ramon M. Lopez said the MBC is yet to finalize the rules and procedures with respect to allowable goods and the limit in the amount of transaction under the barter scheme.
The revival of the barter trade was reportedly an offshoot of the President’s wish to provide more livelihood opportunities in the depressed areas of selected Island provinces in Mindanao, particularly in Sulu and Tawi Tawi.
“He wants to initiate more economic activities that will uplift the lives of the people in those areas that will hopefully lead to more peace and development. Moreover, more trading of the basic goods shall lead to better supply and prices in those areas,” said Lopez.
The revival of the barter system was made possible under the Organic Law for Bangsamoro Autonomous Region in Muslim Mindanao which provides that the Bangsamoro Government shall exercise its authority over barter and countertrade, without prejudice to the general supervision of the President.