Overview of PKFTA Case Model
The Philippines-Korea Free Trade Agreement (PKFTA), signed in 2023, is a dynamic deal set to boost economic ties by cutting tariffs and expanding market access. It propels Philippine exports like bananas and processed foods to South Korea while drawing Korean investments in electronics and renewable energy. With streamlined customs and enhanced trade in services, the PKFTA fosters growth, job creation, and stronger bilateral trade, cementing both nations as vital economic partners
- Simplified Rules of Origin(ROO)
- From AKFTA to PKFTA relaxes complex process-based requirements like “SP” (Specific Processing), instead allowing origin qualification with a simple Change in Tariff Classification at the Chapter level (CC)
Impact: This simplification significantly lowers the barrier for compliance and reduces documentation workload.
- Accelerated Certificate of Origin (CO) Issuance
- By utilizing the Approved Exporter System, registered exporters can transition from institutional issuance to self-certification of origin. Under PKFTA, exporters may choose between two self-issuance methods specified in the Agreement.
Impact: This results in faster CO preparation, reduced dependency on issuing authorities, and greater agility in meeting urgent shipment timelines.
- Long-term Expansion: Inclusive Self-Certification
- PKFTA includes a provision for the future implementation of non-approved exporter self-certification within 10 years of the Agreement’s entry into force, as agreed by both parties.
Impact: This will expand access to FTA benefits for SMEs, lower compliance costs, and contribute to broader trade facilitation across both countries.
Comparison between PKFTA vs AKFTA
- Product Name Men’s Shirt
- Target Market Republic of Korea
- HS Code 6105.10
- MFN Tariff 13%
- FTA Tariff
- (AKFTA) 5%
- (PKFTA) 0%
PSR Comparison
-
FTA
PSR Requirement
- ASEAN – Korea FTA CC + Specific Processing (e.g., printing, cutting)
- Philippines – Korea FTA CC only (Simplified Requirement)
PKFTA significantly simplifies origin qualification by requiring only a Change in Tariff Classification(CTC) at the Chapter level. (CC), removing additional processing requirements.
Import documents for non-originating fabric (e.g., HS 6006)
Detailed process flow chart
Production records showing each SP step
Photos or video evidence of in-factory processing
Subcontractor documentation if outsourced
HS classification of raw materials (e.g., HS 6006)
Final product classification (HS 6105)
Simple BOM or invoice to demonstrate CTC
What makes CC + SP more burdensome?
-
01
Multiple processing stages must be documented E.g., Fabric cutting, sewing, finishing, and labelling – all must be described in technical terms.
-
02
Factory-level proof is required: Must show the physical transformation step-by-step, often including time stamps and batch data.
-
03
Third-party (subcontractor) processing? Even more complex: Must show the physical transformation step-by-step, often including time stamps and batch data.
-
03
Third-party (subcontractor) processing? Even more complex: Requires subcontract agreements, proof of control, and quality assurance records.
PKFTA The exporter only needs to demonstrate a Change in Chapter (CC) – no need to prove specific physical processes. This enables much faster CO preparation and lower audit risk.
Faster CO Issuance via Approved Exporter System
Applied for and obtained Approved Exporter status from BoC.
Transitioned from institutional issuance to self-certification of origin under the Philippines-Korea FTA.
Under the PKFTA, exporters are permitted to self-issue Certificates of Origin by selecting one of the two methods stipulated in the Agreement.
Origin Declaration Sentence
Origin Declaration Form
Performance & Robust Features
CC ONLY
PKFTA
CC+SP
Other FTA
Institutional
PKFTA
Institutional OR Self issuaance
Other FTA
7days
PKFTA
Instant(Self-issuance)
Other FTA
Both governments have agreed to introduce non-Approved Exporter self-certification within 10 years, further increasing accessibility and reducing compliance burdens for SMEs.
PKFTA 04 (2) Annex 4-A
The Parties shall implement the Certificate of Origin and approved exporter regimes upon the entry into force of this Agreement. In addition, the Origin Declaration by exporter or producer shall be implemented no later than 10 years after the date of entry into force of this Agreement.