The Bureau of Customs (BOC) is allowing collection districts to set floor prices for items to be publicly auctioned in order to expedite disposition of goods to raise revenue and ease port congestion.
Under Customs Memorandum Order (CMO) No. 40-2019, setting of the floor price of goods for public auction “shall no longer require prior approval from the Customs Commissioner.”
Collection districts, however, shall still strictly observe conditions set under CMO 02-2019, which provides the guidelines for the conduct of public auction and the setting of floor prices.
Under CMO 02-2019, the floor price shall not be less than the landed cost of the goods, taking into account the obsolescence, condition, or normal depreciation of goods, including unpaid duties, taxes and other charges. Further, the floor price shall be computed, as may be applicable, using the average of at least three values of similar articles at the time of importation or at least three months prior to, plus applicable duties and taxes; or the domestic wholesale price arrived through backward computation, using as basis the average of three canvassed retail prices of similar articles in the usual ordinary course of trade.
CMO 40-2019 states that BOC’s National Value Verification System (NVVS) shall be the basis for the computation of the floor prices. The NVVS is a web-based system that customs assessment officers may access “to verify whether the value declared by the importer is the price actually paid or payable for the goods when sold for export to the Philippines.”
