CUSTOMS BONDED WAREHOUSING

DEFINED
A Customs Bonded Warehouse is basically defined as a
warehouse licensed by the Bureau of Customs where
Imported articles (raw materials, semi-finished materials,
components and packaging materials) stored without the
payment of duties and taxes provided the finished products
are re-exported within the prescribed period of time and/or
if withdrawn for local consumption, payment of duties,
taxes and other charges shall be required.
 OTHER DEFINATION
A bonded warehouse, or bond, is a building or
other secured area in which dutiable goods may be
stored, manipulated, or undergo manufacturing
operations without payment of duty. It may be
managed by the state or by private enterprise. In the
latter case a customs bond must be posted with the
government.
RELEVANT LAWS, RULES AND
REGULATIONS ON
WAREHOUSING
 RELEVANT LAWS, RULES AND
REGULATIONS ON WAREHOUSING

Warehousing in general
Sections 801 – 813, CMTA
 RELEVANT LAWS, RULES AND
REGULATIONS ON WAREHOUSING
Customs Administrative Orders (CAO)

CAO 1-2009 – Revised rules and regulations for the

establishment, operation, supervision and control of
customs bonded warehouses

CAO 7-2003 – establishment of industry specific customs

bonded warehouse (ICBW) servicing the semiconductor
and electronics industry and the rules and regulations
 RELEVANT LAWS, RULES AND
REGULATIONS ON WAREHOUSING
CAO 2-2003 – rules and regulations rationalizing the use
and operation of public CBWs
supplementing/modifying
CAO 2-91 and other related issuances

CAO 2-1991 – rules and regulations for the establishment,

operations, supervision, and control of customs bonded
warehouses
 RELEVANT LAWS, RULES AND
REGULATIONS ON WAREHOUSING
CAO 12-2003 (Bond’s Liquidation of warehousing entry)

CAO 1-2004 (Treatment of Consigned Materials for

Export)

CMO 19-2005 (Renewal of License of CBW)

CMO 26-2005 (Liquidation of Bonds)

CAO 3-2007 (Creation of Common Bonded Warehouse)

 Customs Memorandum Orders (CMO)
CMO 4-2011 – Physical Inventory and Audit of all existing Accredited
Industry Specific Customs Bonded Warehouse

CMO 3-2011 – Moratorium on Approval to Establish and Operate an

Industry-Specific-Customs Bonded Warehouse

CMO 40-2010 – application and renewal to be approved by

commissioner

CMO 19-2005 – renewal of licenses of customs bonded warehouses

 Customs Memorandum Orders (CMO)
CMO 3-1998 – moratorium on approvals to operate and
establish off dock CY-CFS, customs public and private bonded
warehouses, customs bonded trading warehouses, common
bonded warehouses and government sheds.
CMO 32-1997 – guidelines on the implementation of automated
processing of warehousing entries at Customs District IIINAIA
CMO 39-1991 – rules and regulations implementing CAO 2-91
for the establishment, supervision, and control of customs
 SEC. 801, CMTA Establishment and
Supervision of Warehouses
o Subject to the approval of the Commissioner
o Subject to the supervision of the District
Collector through the respective Operating
Divisions
o Intended for re-exportation, subject for posting
of sufficient security
o The operator of bonded warehouse shall pay
 SEC. 802, CMTA: Types of Customs
Bonded Warehouse (CBw)
 Manufacturing Customs Bonded Warehouse may be of the
following types:
A. Miscellaneous customs bonded warehouse;
B. Customs Common Bonded Warehouse
C. Industry-specific bonded warehouse

 Non-manufacturing customs bonded warehouse include:

A. Public Bonded Warehouse
B. Private Bonded Warehouse
 SEC.
SEC. 803,
803, CMTA:
CMTA: Types
Types of
of Customs
Customs Facilities and
Warehouses
Warehouses (CBWs)
(CBWs)
 Customs facilities and warehouses shall include:
A) Container yard;
B) Container Freight Station;
C) Seaport Warehouses; and
D) Airport Warehouses

Note: Subject to consultation with NEDA & DTA, the Sec.

of Finance, upon recommendation of the Commissioner,
create or dissolves certain types of warehouses.
 SEC.
SEC. 804,
804, CMTA:
CMTA: Application
Application for
for Operation
Operation of
of aa
Customs
Customs Warehouse
Warehouse
 … it shall be filed with the Dist. Collector where the
CBW or CFW is located, describing the premises,
location, capacity, and purpose thereof.

 … after receipt of such application, the DC shall examine

such proposed warehouse. The DC, with the approval
of the Commissioner, may authorize the establishment
of customs warehouse, and accept required security for
its operation and maintenance.
 SEC.
SEC. 806,
806, CMTA:
CMTA: Customs
Customs Control
Control Over
Over CBWs
CBWs and
and
CFWs
CFWs
 … The Bureau shall, for customs purposes,
exercise control over, direct and manage CBW
and CFWs and likewise over the goods thereat.

 …Provided, That the Bureau shall not be liable

for any loss or damage of the goods stored for
safekeeping in any CBW, CFW, yard or premises
 SEC.
SEC. 807,
807, CMTA:
CMTA: Discontinuance
Discontinuance of
of CBW
CBW and
and CFW
CFW
 … maybe discontinued by the DC when conditions so
warrant, or upon receipt of a written request from the
operator thereof, provided all the requirements of the laws
and regulations have been complied with by the operator.

 … the premises shall not be relinquished , until after a careful

examination of the account of the warehouse.

 …Discontinuance of the use of any warehouse shall be

effective upon approval by the DC who shall, within 10 days,
 SEC.
SEC. 808,
808, CMTA:
CMTA: Warehousing
Warehousing Security
Security on
on Goods
Goods
Stored
Stored in
in CBWs
CBWs
 … for goods declared in the entry for warehousing in CBWs, the DC
shall require the importer to post a sufficient security equivalent to
computed duties, taxes and other charges.

 … conditioned upon the withdrawal of the goods within the period

prescribed by Section 811, CMTA or the payment of DT and other
charges.

 …Quick look at Sec. 811, CMTA. Goods entered for warehousing may
remain in a CBW for a maximum period of 1 year from the time of its
arrival thereat. For perishable goods, the storage period shall be
3months, extendible for valid reasons, and upon written request to
 SEC.
SEC. 810,
810, CMTA:
CMTA: Release
Release of
of Goods
Goods from
from CFW’s
CFW’s

 … imported goods shall be released when the goods declaration is

electronically lodged, together with any related document
required.
 … all goods entered into the CFW’s shall be subject to the filing of a
goods declaration within the period specified under Section 407 of
the CMTA.
 A Quick look at Section 407, CMTA:
… Good declaration must be lodged within 15 days from the date of
discharge of the last package. The period maybe extended to another
 SEC.
SEC. 810,
810, CMTA:
CMTA: Release
Release of
of Goods
Goods from
from CFW’s
CFW’s

 … imported goods shall be released when the goods declaration is

electronically lodged, together with any related document
required.
 … all goods entered into the CFW’s shall be subject to the filing of a
goods declaration within the period specified under Section 407 of
the CMTA.
 A Quick look at Section 407, CMTA:
… Good declaration must be lodged within 15 days from the date of
discharge of the last package. The period maybe extended to another
 SEC.
SEC. 811,
811, CMTA:
CMTA: Period
Period of
of storage
storage in
in CBW’s
CBW’s

 … goods entered for warehousing may

remain in a CBW for a maximum period of 1
year from the time of arrival. For perishable
goods, the storage period shall be 3 months
 …extendible for valid reasons, and upon
request, to another 3 months.
 SEC.
SEC. 812,
812, CMTA:
CMTA: Exemption
Exemption from
from Duty
Duty of
of Goods
Goods in
in
CBW’s
CBW’s
 … goods duly entered for warehousing in
CBW’s shall be exempt from duty and tax
within the allowed period for storage unless
withdrawn for:
Consumption
Exportation or
Transit to a free zone or another CBW
 SEC.
SEC. 813,
813, CMTA:
CMTA: Records
Records to
to be
be Kept
Kept by
by CBW
CBW
Operator
Operator
 … an account shall be kept by the Bureau o
all goods delivered to a CBW, and a report
shall be made by the CBW operator
containing a detailed statement of all
imported goods entered or withdrawn from
the CBW.
 For records purposes, all documents shall be
 CAOs and CMOs in review!!

Salient features of various

issuances of the Bureau of Customs
(BOC) related to bonded
warehouse operations.
 CAO
CAO 1-2009
1-2009 (Revised
(Revised Rules
Rules and
and Regulations
Regulations for
for the
the
establishment,
establishment, operations,
operations, supervision
supervision &
& control
control of
of CBWs
CBWs
 Title II (Definition)
- Accessories - refers to an articles which are neither raw
materials nor supplies which enhance the finished product to
be re-exported.
- Account Officer – is the customs personnel responsible for
monitoring the performance of the CBW from importation to
liquidation.
- Accountable Officer – is the responsible official of the CBW
named and designated by the operators as the person
answerable and liable to the BOC for the operational aspects
 CAO
CAO 1-2009
1-2009 (Revised
(Revised Rules
Rules and
and Regulations
Regulations for
for the
the
establishment,
establishment, operations,
operations, supervision
supervision &
& control
control of
of CBWs
CBWs
 Title II (Definition)... continuation
- Automated Raw Materials Inventory Mngt. System
(ARMIMS) - is the computerized system to be adopted by the
CBW operator as a tool to determine and monitor the stock
inventory of imported articles entered through warehousing
of a CBW
- Automated Bonds Management System (ABMS) – is the
computerized system to be adopted by the BOC as a tool in
the effective monitoring and cancellation of bonds for the
liquidation of raw materials/entries
 CAO
CAO 1-2009
1-2009 (Revised
(Revised Rules
Rules and
and Regulations
Regulations for
for the
the
establishment,
establishment, operations,
operations, supervision
supervision &
& control
control of
of CBWs
CBWs
 Title II (Definition)... continuation
- Bar Coding System – it the system that may be utilized by
the BOC in identifying and tracking certain imported articles
imported for warehousing
- Bonded Warehouse Committee – is the committee created
to act on applications for the establishment and operation of
CBW.
- Customs Certificate of License – is a document signed by
the Comm. Of Customs and the Dist. Collector of Customs at
the Port, issued to an enterprise with an approved authority
 CAO
CAO 1-2009
1-2009 (Revised
(Revised Rules
Rules and
and Regulations
Regulations for
for the
the
establishment,
establishment, operations,
operations, supervision
supervision &
& control
control of
of CBWs
CBWs
 Title II (Definition)... continuation
- Compliance Rate System - is a procedure to be adopted by
the BOC in assessing the degree of compliance of a warehouse
operator with relevant to CBW rules and regulations.
- Constructive Exportation/Importation – involves the sale or
any other mode of conveyance and delivery of raw materials
and semi-finished from a CBW to CMBW, PEZA/Economic Zone,
and Freeports.
- Customs Bonded Warehouse Operator – is a natural or
juridical person who has a duly approved license to operate a
 CAO
CAO 1-2009
1-2009 (Revised
(Revised Rules
Rules and
and Regulations
Regulations for
for the
the
establishment,
establishment, operations,
operations, supervision
supervision &
& control
control of
of CBWs
CBWs
 Title II (Definition)... continuation
- Open Bonded System - is the operation of duly licensed
CBW wherein the tracking, monitoring, and accounting of
imported goods entered conditionally free under the CBW
scheme is done by computer linkage, without a need of
assigning any customs personnel at the warehouse.
- Raw Materials Liquidation System - is an automated system
to be adopted and utilized by the BOC in determining the
volume and value of the raw materials exported and subject
for liquidation
 CAO
CAO 1-2009
1-2009 (Revised
(Revised Rules
Rules and
and Regulations
Regulations for
for the
the
establishment,
establishment, operations,
operations, supervision
supervision &
& control
control of
of CBWs
CBWs
 Title II (Definition)... continuation
- Transit – is the customs procedure under which goods are
transported under customs control from one Customs office to
another or to PEZA/Freeport registered enterprise, and vice
versa
- Wastage Valuation Data Base (WVDB) – is a bank of
information and reference values which shall be utilized by the
BOC in assessing the duties and taxes due on the allowable
residue/wastage/by-products which could no longer be used for
the manufacture of articles to be exported.
 CAO
CAO 1-2009
1-2009 (Revised
(Revised Rules
Rules and
and Regulations
Regulations for
for the
the
establishment,
establishment, operations,
operations, supervision
supervision &
& control
control of
of CBWs
CBWs
 A Customs Bonded Manufacturing Warehouse
(CBMW) shall maintain a minimum paid-up
capitalization of Php20,000.00
 A license to operate a CBW is personal to the
warehouse and shall not be transferred or
assigned for whatever reasons.
 CAO
CAO 1-2009
1-2009 (Revised
(Revised Rules
Rules and
and Regulations
Regulations for
for the
the
establishment,
establishment, operations,
operations, supervision
supervision &
& control
control of
of CBWs
CBWs

Application for a License to Operate a CBW

- shall be submitted to the Comm. Of
Customs through the Dist. Collector for
evaluation of the BWC, except for the
application to operate a Multinational
Bonded Warehouse which shall be filed
with the BOI.
 CAO
CAO 1-2009
1-2009 (Revised
(Revised Rules
Rules and
and Regulations
Regulations for
for the
the
establishment,
establishment, operations,
operations, supervision
supervision &
& control
control of
of CBWs
CBWs

Evaluation of the Application for a License

to Operate a CBW
- the Dist. Collector of Customs of the Port

shall be submitted to the Comm. Of Customs

through the Dist. Collector for evaluation of
 Miscellaneous Manufacturing Bonded
Warehouse (MMBW)
CAO 1-2009
 Is a warehouse facility licensed by the BOC to
import, receive and store raw materials,
accessories and packing materials, except
garments and textile, for manufacture into
finished products for export
 Garments/Textile Manufacturing Bonded
Warehouse (GTMBW)
CAO 1-2009

 Is a warehouse facility jointly licensed by the

BOC and the BOARD OF INVESTMENTS (BOI)
through its accreditation committee to import,
receive and store garments, textile, accessories
and packaging materials for manufacture into
finished products for export
 Customs Common Bonded Warehouse
(CCBW)
CAO 1-2009
 Is a warehouse facility licensed by the BOC alone, or jointly
with GTIS for garments industry, to import, receive and store
raw materials, accessories, spare parts, supplies and packing
materials for the account of its accredited members for
manufacture into finished products for export.
 Is a warehouse facility licensed by the BOC, to import, receive
and store articles for its production intended for domestic
consumption, withdrawal of which shall be made only upon
payment of duties and taxes and other charges
 Customs Common Bonded Warehouse
(CCBW)
CAO 1-2009
 Is a warehouse facility licensed by the BOC, to receive and
store general cargoes for exportation, transfer to another
custom bonded warehouse, PEZA or Freeport registered
enterprise, or for local consumption, in the same state
when the cargoes were imported. Articles for local
consumption shall only be withdrawn upon payment of
the assessed duties and taxes and other charges due
thereon.
 Industry-Specific Customs Bonded
Warehouse (ICBW)
CAO 1-2009
 Is a warehouse facility duly licensed by the BOC, to import
under bond and under its name and account raw materials
(except fibers, yarns, fabrics and accessories for the
manufacture of garments) for storage and subsequent
sale/transfer to the following where these shall be
manufactured into export products:
a. License client/end-user;
b. Customs Bonded Manufacturing Warehouse; or
c. PEZA or Freeport locator.
 Multinational Regional Bonded Warehouse
(MRBW)
CAO 1-2009
 Is a warehouse facility licensed by BOI in proper cases, to serve
as a supply depot for the storage, deposit, safekeeping of
spare parts components, semi finished products and raw
materials including packing, covering, putting up, marking,
labeling, cutting or alter to customer satisfaction, mounting
and or packaging into kits or marketable lots thereof to fill up
transactions and sales made by its officer or parent companies
and to serving as a storage of goods purchased locally by the
home office of the multinational for
 Airline Customs Bonded Warehouse
(ACBW)
CAO 1-2009

Is a special type of Customs Bonded

Warehouse which caters to the needs of
the international air carriers operating in
the country.
 LIQUIDATION OF MATERIALS/ WAREHOUSING
ENTRY AND CANCELLATION OF BONDS
CAO No. 12-2003)
START

CBW 1. Collates all pertinent export documents

OPERATOR 2. Prepares and accomplishes Statement of Liquidation Submits to the
Operating Division within a non-extendible period of sixty (60) days
3. from the date of full exportation of finished products

4. Receives Statement of Liquidation and all pertinent documents

5. Retrieves working copy of warehousing entry
OPERATING DIVISION 6. Checks completeness and genuineness
7. Reviews and ascertain the materials consumption
8. Signs all copies of Statement of Liquidation within fifteen (15) days
from the date of receipt of applicant for liquidation and thereafter
transmits to Bonds Division
LIQUIDATION OF MATERIALS/ WAREHOUSING
ENTRY AND CANCELLATION OF BONDS
TRANSACTION (Reference : CAO No. 12-2003)
AND
AUDIT DIVISION II

9. Receives warehousing bonds, Warehousing Entry,

BONDS Statement of Liquidation and supporting documents for final liquidation
DIVISION 10. Liquidation of entries within five (5) days from receipt hereof
11. Transmit to the Bonds Division indorsement for cancellation Of
bonds
12. Receives Indorsement from Operating Division the Warehousing Entry
END together with the Statement of Liquidation and supporting documents
13. Cancels the bond within five (5) days from receipt thereof
14. Notifies the CBW operator and the surety company
15. Transmits Warehousing Entry, Statement of Liquidation and other
supporting documents to Liquidation and Billing Division
16. Bonds cancellation shall be posted in Bonds Division, copy
 LIQUIDATION OF MATERIALS/ WAREHOUSING
ENTRY AND CANCELLATION OF BONDS
(Reference : CAO No. 12-2003)
TRANSACTION 9. Receives warehousing bonds, Warehousing Entry, Statement of
AND Liquidation and supporting documents for final liquidation.
AUDIT 10. Liquidation of entries within five (5) days from receipt hereof .
DIVISION II 11. Transmit to the Bonds Division indorsement for cancellation Of
bonds.
12. Receives Indorsement from Operating Division the Warehousing
Entry together with the Statement of Liquidation and supporting
BONDS
documents.
DIVISION 13. Cancels the bond within five (5) days from receipt thereof.
14. Notifies the CBW operator and the surety company.
15. Transmits Warehousing Entry, Statement of Liquidation and other
END supporting documents to Liquidation and Billing Division
16. Bonds cancellation shall be posted in Bonds Division, copy furnished
the operating division and WDRD
 LIQUIDATION OF MATERIALS/ WAREHOUSING
ENTRY AND CANCELLATION OF BONDS
TRANSACTION 9. (Reference
Receives : CAO
warehousing No.Warehousing
bonds, 12-2003)Entry, Statement of
AND Liquidation and supporting documents for final liquidation.
AUDIT 10. Liquidation of entries within five (5) days from receipt hereof .
DIVISION II 11. Transmit to the Bonds Division indorsement for cancellation Of
bonds.
12. Receives Indorsement from Operating Division the Warehousing
Entry together with the Statement of Liquidation and supporting
BONDS
documents.
DIVISION 13. Cancels the bond within five (5) days from receipt thereof.
14. Notifies the CBW operator and the surety company.
15. Transmits Warehousing Entry, Statement of Liquidation and other
END supporting documents to Liquidation and Billing Division
16. Bonds cancellation shall be posted in Bonds Division, copy furnished
the operating division and WDRD
 Airline Customs Bonded Warehouse
(ACBW)
CAO 1-2009

Is a special type of Customs Bonded

Warehouse which caters to the needs of
the international air carriers operating in
the country.
DETERMINATION OF RAW
MATERIAL USAGE FOR
MANUFACTURING
 DETERMINATION OF RAW
MATERIAL USAGE FOR MANUFACTURING
1. As mandated by BOC rules, only the Formula of Conversion (FOC)
approved by the Industrial Technology Development Institute shall be
used in the computation of raw material usage.
2. Units of measure used in the Formula of Conversion must be
followed, thus units of import which are different must be converted
into the same units as those of the FOC.
3. To determine raw material usage, the following computation should
be applied:
No. of pieces of Finished Goods X Unit Usage in FOC = Total Raw
Material used
 DETERMINATION OF RAW
MATERIAL USAGE FOR MANUFACTURING
Usage/Piece
Product Raw Materials Unit
of FP*
Skirt Regular 100% cotton fabric 57-58”w m 0.78
Non-fusible interlining 36”w m 0.23
Poly gross-grain tape 56”w m 1.10
100% cotton bias fabric 56”w m .14
Zipper pc. 1
Thread m 230
Hook & bar / Hook & eyelet set 1
 DETERMINATION OF RAW
MATERIAL USAGE FOR MANUFACTURING
A. Formula of Conversion
*Finished Product
A.1. Raw Materials / Importation
 DETERMINATION OF RAW
MATERIAL USAGE FOR MANUFACTURING
Raw Materials Quantity Conversion

100% cotton 57-58 “w 29,959.60 yds. 27,395.06 meters

Non-fusible interlining 36”w 8,900 yds. 8,138.16 meters

Poly gross-grain tape 42,200 yds. 38,587.68 meters

100% cotton bias fabric 5,400 yds. 4,937.76 meters

Hook & bar / Hook & eyelet 250 gross 36,000 pcs.

Zipper 250 gross 36,000 pcs.

TO CONVERT: yards to meters

meters to yards gross to pieces
 DETERMINATION OF RAW
MATERIAL USAGE FOR MANUFACTURING
A.2. Raw Material Usage
Finished Product Raw Materials Total Quantity Used
35,000 pieces 100% cotton 57-58
.78 m x 35,000 pcs = 27,300 m
Skirt (regular) “w
Non-fusible interlining 36”w
.23 m x 35,000 pcs = 8,050 m
Poly gross-grain tape
1.10 x 35,000 pcs = 38,500 m
100% cotton bias fabric
.14 x 35,000 pcs = 4,900 m
Zipper 1 x 35,000 pcs = 35,000 pcs
Hook & bar / Hook
1 x 35,000 pcs = 35,000 sets
 YARN & KNITTED FABRICS
B. Formula of Conversion
Usage/Piece
Product Raw Materials Unit of FP*
Girls’ Jogset 60-40 combed cotton/polyester kg 3.07 2 pcs./set spun
yarn 65% poly 35% blended cotton kg 1.14 yarn CVC
60/40 1x1 rib 57/58”w kg 2.01
(knitted fabrics)
Main labels kg 24
*Finished Product
 DETERMINATION OF RAW
MATERIAL USAGE FOR MANUFACTURING
B.1. Raw Materials / Importation
Raw Materials Quantity Conversion
60-40 combed cotton/polyester
spun yarn 88,217.5 kgs

65% poly 35% blended cotton yarn

32,757.5 kgs

CVC 60/40 1x1 rib 57/58”w (knitted 22,035.57 kgs

(61,038.53 yds)* 55,813.63 meters
fabrics)
Main labels 675,000 pcs
* Equivalent yardage for invoice & packing list
 DETERMINATION OF RAW
MATERIAL USAGE FOR MANUFACTURING
B.2. Raw Material Usage
Finished Product Raw Materials Total Quantity Used
25,000 dozens/set 60-40 combed 25,000 doz/sets
Girls’ Jogset cotton/polyester spun yarn X 3.07 kgs. = 76,750
kgs.
65% poly 35% blended cotton 25,000 x 1.14 kgs.= 28,500
kgs. Yarn
CVC 60/40 1x1 rib 57/58”w 25,000 x 2.01 m = 50,250 meters
(knitted fabrics)
Main labels 25,000 x 24 pcs. = 600,000 pcs
Usage / *Finished Product
 DETERMINATION OF RAW
MATERIAL USAGE FOR MANUFACTURING
C. Formula of Conversion
Product Raw Material/s Unit Piece of FP*
Ends for 307307 Tin Free Steel pc 1
easy open (open ends) easy open ends

307 x 112 307 Tin Free Steel pc 1

cans with (open ends) easy open ends
easy open
ends
 DETERMINATION OF RAW
MATERIAL USAGE FOR MANUFACTURING
C.1. Raw Materials / Importation
Raw Materials Quantity Conversion

307 Tin Free Steel 2,073,600 pcs 30,336 kgs

(open ends)
 DETERMINATION OF RAW
MATERIAL USAGE FOR MANUFACTURING
C.2. Raw Material Usage
Finished Product Raw Materials Total Quantity Used

Ends for 307 Easy 307 Tin Free Steel 1 pc x 1,036,800 pcs
Open (open ends) = 1,036,800 pcs
(2,073,600 pcs)

307 x 112 cans 307 Tin Free Steel 1 pc x 1,036,800 pcs

with easy open (open ends) = 1,036,800 pcs
ends
 DETERMINATION OF RAW
MATERIAL USAGE FOR MANUFACTURING
Description of Finished Goods (F/G) – Ex. Ladies’ Dresses/Ladies’ Skirts
A. Unit of Measure of F/G – Ex. Pieces
B. Quantity – Refers to quantity of F/G that is to be manufactured in a month’s time.
This quantity is usually based on actual orders, on projected sales or on the monthly
average production of previous years. The limiting factor on this quantity is the rated
capacity of the warehouse. This quantity must not exceed the rated capacity
C. Description of R/M – Ex. 100% cotton woven fabric / 95% cotton and 5% spandex
fabric / description must be tariff-heading compliant
D. Unit of Measure of R/M – Depending on the system prevailing in the country of
origin of the new materials, unit of measure maybe in yards, meters, rolls, gross,
dozens etc.
E. Tariff Heading – The BOC is now using the Asean Harmonized Tariff
 PREPARATION
PREPARATION OF
OF THE
THE STATEMENT
STATEMENT OF
OF MONTHLY
MONTHLY
RAW
RAW MATERIAL
MATERIAL IMPORTATION
IMPORTATION REQUIREMENT
REQUIREMENT
G. Quantity of R/M per Unit of F/G – This quantity must include the allowance for
wastages aside from the unit isage per piece of F/G. There are two ways by
which we can arrive at this quantity:
1). If the old FOC’s are used where the allowance for wastage is not indicated, the formula for R/M is :
R/M = Unit Usage per F/G
% of unit usage over total RM
Example:
RM = .78 m per piece of regular skirt
.97 * (97%)
= .804 m per skirt
* 97% or .97 is the % of the unit usage over the total R/M per piece:
if wastage = 3% then: unit usage = 97%
 PREPARATION
PREPARATION OF
OF THE
THE STATEMENT
STATEMENT OF
OF MONTHLY
MONTHLY
RAW
RAW MATERIAL
MATERIAL IMPORTATION
IMPORTATION REQUIREMENT
REQUIREMENT
2). If the newly issued FOC’s are to be used where the allowance for wastage has
been computed and indicated therein, the last two columns are added to get
the total R/M per piece of F/G.
Example:
Product Unit Wastage Raw Material Unit Description Usage Per Unit
Ladies’ Skirt 100% polyester woven fabric 56” w m .6072 .1072
R/M per piece of skirt = .6072 + .1072 = .7144 m/skirt
Computation of quantity of R/M (column G of SMRMIR) in cases of Knitted
Fabrics and Yarn
 PREPARATION
PREPARATION OF
OF THE
THE STATEMENT
STATEMENT OF
OF MONTHLY
MONTHLY
RAW
RAW MATERIAL
MATERIAL IMPORTATION
IMPORTATION REQUIREMENT
REQUIREMENT
1). If FOC does not indicate allowance for wastage, the formula is:
R/M = unit of usage per F/G
% of unit usage over total R/M
a. Yarn – Maximum limit in determining wastage is 13%
(yarn to fabric = 3%; fabric to garments = 10%
if wastage = 13% then unit/usage = 87%
Total R/M 100%
Example: 3.07 kgs./doz sets = 3.53 kgs/doz set
.87 (or 87%) TOTAL R/M
 PREPARATION
PREPARATION OF
OF THE
THE STATEMENT
STATEMENT OF
OF MONTHLY
MONTHLY
RAW
RAW MATERIAL
MATERIAL IMPORTATION
IMPORTATION REQUIREMENT
REQUIREMENT
b. Knitted Fabrics – maximum limit in determining wastage is 10%
Wastage = 10% unit usage = 90%
100%
Example:
R/M = 2.01 meters/dozen sets = 2.23 meters/dozen set
.90 (90%)
 PREPARATION
PREPARATION OF
OF THE
THE STATEMENT
STATEMENT OF
OF MONTHLY
MONTHLY
RAW
RAW MATERIAL
MATERIAL IMPORTATION
IMPORTATION REQUIREMENT
REQUIREMENT
2). If FOC indicates allowance for wastage the unit usage + wastage = R/M or
just add up the last two columns of the FOC to get R/M Example: FOC
Unit per Wastage F/G Raw Material Unit
100 pcs Per 100 pcs Jumper sets CVC 60/40 2x1 rib (knitted) m 45 2.25 T/C 65/35
poly/cotton yarn kg 40 2
Computations:
Knitted: CVC 60/40 2x1 rib R/M = 45 meters / 100 pcs (usage)
+ 2.25 meters = wastage/100 pcs
R/M 47.25 m / 100 pcs
Yarn: TC 65/35 poly/cotton
R/M = 40 kg usage/100p cs
+ 2 kg wastage/100 pcs
 PREPARATION
PREPARATION OF
OF THE
THE STATEMENT
STATEMENT OF
OF MONTHLY
MONTHLY
RAW
RAW MATERIAL
MATERIAL IMPORTATION
IMPORTATION REQUIREMENT
REQUIREMENT
H. TOTAL Quantity per month – To get this, we multiply the quantity in C by the figure we
arrived at in G
Example: C = 14,000 pcs/mo
= .804 (old FOC)

= CxG
= 14,000 x .804 m
H = 11,256 meters
I. Unit Cost – This refers to unit cost of the raw materials. The current unit cost can be supplied
by the R/M supplied by the R/M suppliers themselves

J. Value – This refers to the total value in US $ or the total R/M computed in letter H and this
can be arrived at by multiplying H by I
PREPARATION
PREPARATION OF
OF THE
THE STATEMENT
STATEMENT OF
OF MONTHLY
MONTHLY
RAW
RAW MATERIAL
MATERIAL IMPORTATION
IMPORTATION REQUIREMENT
REQUIREMENT
 LIQUIDATION
LIQUIDATION OF
OF RAW
RAW MATERIALS
MATERIALS IN
IN GARMENTS
GARMENTS
MANUFACTURING
MANUFACTURING BONDED
BONDED WAREHOUSES
A. In the liquidation of raw materials we should be guided by
the following:

1. Section 813, CMTA

2. Sections III.1.4 and III.1.5 of CMO 39-91
3. CMC 001-2001 as amended
4. The ITDI approved Formula of Conversion
5. The prescribed format of the Statement of Reconciliation /
liquidation of Raw Materials
 LIQUIDATION
LIQUIDATION OF
OF RAW
RAW MATERIALS
MATERIALS IN
IN GARMENTS
GARMENTS
MANUFACTURING
MANUFACTURING BONDED
BONDED WAREHOUSES
CASE 1
B. The Statement of Reconciliation / liquidation of Raw Materials
DESCRIPTION OF UOM VOLUME OF DESCRIPTION OF UOM QTY. FOR PER VOLUME OF
F/G F/G RAW MAT’L 100 PCS. RAW MATERIAL
Finish Pc. 80,000.00 Raw Material A Grm 100
Product No 1

Raw Material B Grm 200

Raw Material C Pc. 300
Raw Material D Mtr. 400
 LIQUIDATION
LIQUIDATION OF
OF RAW
RAW MATERIALS
MATERIALS IN
IN GARMENTS
GARMENTS
MANUFACTURING
MANUFACTURING BONDED
BONDED WAREHOUSES
ANSWER
DESCRIPTION OF F/G UOM VOLUME OF DESCRIPTION OF UOM QTY. FOR PER VOLUME OF
F/G RAW MAT’L 100 PCS. RAW MATERIAL

Finish Product Pc. 80,000.00 Raw Material A Gm 100 80,000.00

No 1

Raw Material B Gm 200 160,000.00

Raw Material C Pc. 300 240,000.00

Raw Material D M. 400 320,000.00

LIQUIDATION
LIQUIDATION OF
OF RAW
RAW MATERIALS
MATERIALS IN
IN GARMENTS
GARMENTS
MANUFACTURING
MANUFACTURING BONDED
BONDED WAREHOUSES
CASE NO. 2
COMPANY B SUBMITTED TO THE WAAREHOUSE
OPERATING DIVISION ITS APPLICATION FOR THE
DISPOSITION OF ITS WASTAGES THRU EXPORTATION.IT
SUBMITTED THE FOLLOWING DOCUMENTS
2. VOLUME OF DRESSES EXPORTED: 400 Pieces
3. REJECT RAW MATERIALS EXPORTED
4. FORMULA OF CONVERSION
5. PERCENTAGE OF WASTAGES IS 3.00%
 LIQUIDATION
LIQUIDATION OF
OF RAW
RAW MATERIALS
MATERIALS IN
IN GARMENTS
GARMENTS
MANUFACTURING
MANUFACTURING BONDED
BONDED WAREHOUSES
IMPORT ENTRIES
ENTRY NO DESCRIPTION VOLUME UOM

123 Raw Material E 415 Yards

345 Raw Material F 500 Meters

567 Raw Material G 300 Meters

789 Raw Material H 400 Meters

ENTRY NO. DESCRIPTION VOLUME UOM

345 RAW MATERIAL F 10 Meters

789 RAW MATERIAL H 20 Meters

 LIQUIDATION
LIQUIDATION OF
OF RAW
RAW MATERIALS
MATERIALS IN
IN GARMENTS
GARMENTS
MANUFACTURING
MANUFACTURING BONDED
BONDED WAREHOUSES
IMPORT ENTRIES
ENTRY NO DESCRIPTION VOLUME UOM

123 Raw Material E 415 Yards

345 Raw Material F 500 Meters

567 Raw Material G 300 Meters

789 Raw Material H 400 Meters

ENTRY NO. DESCRIPTION VOLUME UOM

345 RAW MATERIAL F 10 Meters

789 RAW MATERIAL H 20 Meters

 LIQUIDATION
LIQUIDATION OF
OF RAW
RAW MATERIALS
MATERIALS IN
IN GARMENTS
GARMENTS
MANUFACTURING
MANUFACTURING BONDED
BONDED WAREHOUSES
PREPARE A STATEMENT OF RAW MATERIAL USAGE
FORMAT:
ENTRY DESCRIPTION VOLUME UOM EXPORT WASTAGES BALANCE
NO.
123 Raw Material E 415 Yd.
345 Raw Material F 500 M

567 Raw Material G 300 M

789 Raw Material H 400 M

LIQUIDATION
LIQUIDATION OF
OF RAW
RAW MATERIALS
MATERIALS IN
IN GARMENTS
GARMENTS
MANUFACTURING
MANUFACTURING BONDED
BONDED WAREHOUSES
ANSWER
ENTRY DESCRIPTION VOLUME UOM EXPORT WASTAGES BALANCE
NO.
123 Raw Material E 415 Yrd. 400 12.45 2.55

345 Raw Material F 500 Mtr. 410 14.70 75.30

567 Raw Material G 300 Mtr. 40 9.00 251.00

789 Raw Material H 400 Mtr. 220 11.40 168.60

DOCUMENTARY REQUIREMENTS
TRANSSHIPMENT
Transshipment Permit
Bill of Lading
Invoice
Packing List
Bond for Transit Cargo
Transit Cargo Manifest
Telegram for Transmission
 WAREHOUSING ENTRY
 Informal Import Declaration and Entry (BC form No. 177)
 Warehousing Permit (BC Form No. 198)
 Import Entry & Internal Revenue Declaration
 Transshipment Permit, if any
 Bill of Lading/Airway Bill
 Invoice
 Packing List
 Bond for Transit Cargo
 Transit Cargo Manifest
 Telegram for Transmission
 PAYMENT DUE TO EXPIRED STORAGE
PERIOD
Letter Request
Original Import Entry with all import
documents
Certification of the Warehouseman that the
Materials are still Intact in the Warehouse
 DISPOSITION OF WASTAGES THROUGH
PAYMENT
 LETTER REQUEST
 STATEMENT OR RAW MATERIAL USAGE
 CERTIFICATION OF THE WAREHOUSEMAN THAT THE SAID
WASTAGES/REJECT MATERIALS ARE STILL INTACT IN THE
WAREHOUSE
 CERTIFICATION OF THE CBW OPERATOR AS TO THE
 OCCURRENCE OF SAID WASTAGES OR THE REASON(S) FOR
REJECTS
 CERTIFICATE IF IDENTIFICATION
 THROUGH CONDEMNATION
LETTER REQUEST
STATEMENT OF RAW MATERIAL USAGE
CERTIFICATION OF THE WAREHOUSEMAN THAT
THE SAID WASTAGES/REJECT
MATERIALS ARE STILL INTACT IN THE WAREHOUSE
 THROUGH EXPORTATION
 CERTIFICATE OF IDENTIFICATION
 CERTIFICATE OF INSPECTION AND LOADING
 BOAT NOTE
 EXPORT DECLARATION
 PEZA FORM 8105/BRING IN PERMIT FOR SPECIAL
 ECOZONE, IF APPLICABLE
 DENR/OTHER GOVT. AGENCY CLEARANCE, IF
APPLICABLE
 BONDED TO BONDED/PEZA TRANSFER
 LETTER REQUEST
 FOR PEZA TRANSFER, PEZA FORM 8105 DULY SIGNED BY THE
ENTERPRISE/BUYER OR HIS DULY AUTHORIZED
 REPRESENTATIVE. FOR LOCATOR IN A SPECIAL ECONOMIC
 ZONE, BRING IN PERMIT DULY SIGNED BY THE
 LOCATOR/BUYER OR HIS DULY AUTHORIZED
 REPRESENTATIVE
 CERTIFICATION OF THE WAREHOUSEMAN THAT THE GOODS
 BONDED TO BONDED/PEZA TRANSFER
 ARE STILL INTACT IN THE WAREHOUSE
 CERTIFICATE OF IDENTIFICATION
 BOAT NOTE
 INVOICE/ PACKING LIST
 IN CASE OF CAPITAL EQUIPMENT/SPARE PARTS/SUPPLIES,
FAVORABLE INDORSEMENTS FROM THE BOI AND DOF, IF
APPLICABLE
 PRESCRIBED INDORSEMENT FORM
 RE-EXPORTATION
 LETTER REQUEST
 INVOICE/PACKING LIST
 CERTIFICATION FROM THE WAREHOUSEMAN THAT
 THE GOODS ARE STILL INTACT
 CERTIFICATE OF IDENTIFICATION
 CERTIFICATE OF INSPECTION AND LOADING
 BOAT NOTE
 EXPORT DECLARATION
 LIQUIDATION OF MATERILAS AND
BONDS CANCELLATION
 IMPORT ENTRY WITH ALL IMPORT DOCUMENTS
 STATEMENT OF LIQUIDATION OF MATERIAL
 IMPORTATION
 CERTIFICATE OF IDENTIFICATION FOR DIRECT
 EXPORT
 CERTIFICATE OF INSPECTION AND LOADING FOR
 DIRECT EXPORT
 BOAT NOTE FOR DIRECT EXPORT
 AIRWAY BILL OR BILL OF LADING
 1.
1. FOR
FOR DIRECT
DIRECT EXPORT
EXPORT
 STATEMENT OF LIQUIDATION OF RAW MATERILAS
 CERTIFICATION OF INSPECTION AND
 LOADING/CERTIFICATE OF IDENTIFICATION
 ORIGINAL COPY OF WAREHOUSING ENTRY
 BOAT NOTE
 BILL OF LADING/AIRWAY BILL
 PACKING LIST
 EXPORT DECLARATION
 DULY ACCOMPLISHED WITHDRAWAL
 PERMIT FOR PAYMENT OF WASTAGES, IF
 APPLICABLE
 2.
2. INDIRECT
INDIRECT EXPORT
EXPORT
 CERTIFICATE OF IDENTIFICATION
 BOAT NOTE COVERING TRANSFER
 SUMMARY OF USAGE OF RAW MATERIALS
 OROGINAL COPY OF WAREHOUSING ENTRY
 APPROVED AUTHORITY TO TRANSFER
 3. FOR PAYMENT
 COPY OF PROOF OF PAYMENT FOR RAW
 MATERIALS/WASTAGES
 WITHDRAWAL PERMIT
 ORIGINAL COPY OF WAREHOUSING PERMIT
 PAYMENT OF RAW MATERIALS DUE TO
EXPIRED STORGE PERIOD
 LETTER REQUEST
 ORIGINAL IMPORT ENTRY WITH ALL IMPORT
 DOCUMENTS
 CERTIFICATION OF THE WAREHOUSEMAN THAT THE
 MATERIALS ARE STILL INTACT IN THE WAREHOUSE
 CERTIFICATION OF ACCOUNT OFFICER THAT THE
 QUANTITY REQUESTED FOR PAYMENT DOES NOT
 EXCEED 30% OF TOTAL IMPORTS FOR THE PERIOD, IF APPLICABLE
 REQUEST
REQUEST FOR
FOR AUTHORITY
AUTHORITY TO
TO IMPORT
IMPORT RESIN
RESIN THROUGH
THROUGH
WAREHOUSING
WAREHOUSING SYSTEM
SYSTEM PURSUANT
PURSUANT TOTO CAO
CAO 4-2008A
4-2008A
AS
AS IMPLEMENTED
IMPLEMENTED BYBY CMO
CMO 33-2008
33-2008
 SIX COPIES OF DULY NOTARIZED PRIOR DISCLOSURE STATEMENTS SIGNED BU EITHER THE
PRESIDENT OF GENERAL MANAGER OF THE APPLICANT FIRM SECRETARY’S
 CERTIFICATE SHOULD BE ATTACHED AUTHORIZING ANOTHER
 OFFICER TO SIGN THE PDS
 CERTIFIED TRU COPIES OF THE MOST RECENT APPROVAL
 STATEMENT OF RAW MATERIAL IMPORTATION
 REQUIREMENTS AND/OR LIST OF IMPORTABLES WITH AHTN
 CERTIFIED TRUE COPIES OF ITDI FORMULA OF CONVERSION
 INSPECTION REPORT ON THE APPLICANT’S WAREHOUSE
 FACILITY WHICH CERTIFIES THAT THE FACILITY COMPLIES
 WITH THE REQUIREMENTS UNDER CAO4-2008A AND CMO 332008
 REQUEST
REQUEST FOR
FOR AUTHORITY
AUTHORITY TO
TO IMPORT
IMPORT RESIN
RESIN THROUGH
THROUGH
WAREHOUSING
WAREHOUSING SYSTEM
SYSTEM PURSUANT
PURSUANT TO
TO CAO
CAO 4-2008A
4-2008A AS
AS
IMPLEMENTED
IMPLEMENTED BY
BY CMO
CMO 33-2008
33-2008
 IMPORT PERFORMANCE REPORT FOR TWO (2) CONSECUTIVE YEARS
 DETAILED EXPORT PERFORMANCE AND UTILIZATION REPORT AND
THE SUMMARY OF EXPORT PERFORMANCE AND UTILIZATION
REPORT FOR TWO (2) CONSECUTIVE YEARS
 CERTIFIED TRUE COPIES OF BOI REGISTRATION AND ITS TERMS AND
CONDITIONS
 CERTIFIED TRUE COPIES OF PEZA REGISTRATION/CERTIFICATE (IF
BUYERS ARE PEZA OF ECONOMIC LOCATORS)