Dutiable Trade between the Philippines and the United States, 1924-1929.

In the provisions of the different acts of Congress establishing duty-free trade between the Philippines and the United States there is no limitation as to the amount of permissible foreign material content in products or manufactures of the United States entitled to duty-free admission into the Philippines, but for articles produced or manufactured in the Philippines and entitled to duty-free admission into the United States the foreign (non-Philippine and non-American) material content is limited to 20 per cent of their value. In addition the duty-free movement of United States and Philippine products in either direction is conditioned upon nonallowance of drawback and direct shipment.33

Since the inauguration of duty-free trade from the United States to the Philippines in 1909, there have been importations into the islands from the United States which were subject to duties. These included goods which were dutiable because of allowance of drawback or nondirect shipment, or simply because they were foreign merchandise withdrawn from bonded warehouse and reexported to the Philippines.34 But the proportions of total Philippine imports from the United States represented by these classes have been small-they ranged from 0.4 to 0.9 per cent during the calendar years 1924-1929. The amounts of duties collected in the Philippines on such importations from the United States can not be ascertained from published Philippine customs statistics.

The following tabulation indicates the reported value of dutiable imports into the Philippines from continental United States during the six calendar years 1924-1929.

Philippine dutiable imports from the United States, 1924–19291

1 Source: Annual reports of the insular collector of customs, Manila, P. I.

Relatively small amounts of Philippine shipments to the United States also have had to pay duty because of not conforming to the conditions as to nonallowance of drawback, direct shipment, maximum permissible foreign natural content, or Philippine origin. The minor importance of this trade is indicated by the following table for goods received from the Philippines upon which duties were levied during the six calendar years 1924-1929.

32 United States tariff act of Aug. 5, 1909, sec. 5; congressional Philippine tariff act of Aug. 5, 1909, sec. 12; United States tariff act of Oct. 3, 1913, Sec. IV, C; United States tariff acts of Sept. 21, 1922, and June 17, 1930, sec. 301.

33 Rice was first included in the mutual duty-free provisions under the operation of sec. IV, C of the tariff c1of Oct. 3, 1913.

34 Philippine import statistics do not specify whether or not the reported "dutiable" importations from the United States also include shipments from the United States transshipped to other destinations at Philippine ports.

1924

1925

1926

1927

1

United States dutiable imports from the Philippines, 1924–1929 1

1 Source: Foreign Commerce and Navigation of the United States.

Duties collected on any goods imported into the United States from the Philippines which may be dutiable because of not conforming to the limitations and conditions mentioned above are still transferred to the insular treasury for the benefit of the Philippine Government as provided in the act of March 8, 1902. The exact amount of import duties thus collected and transferred from the beginning of reciprocal free trade in 1909 can not be ascertained, but probably did not exceed $75,000 to the end of June, 1930.35

SHARE OF UNITED STATES PACIFIC, GULF, AND ATLANTIC PORTS IN THE PHILIPPINE TRADE

It is noteworthy that the relative importance of the Atlantic and Pacific ports, respectively, in the trade between the United States and the Philippines has not changed greatly during the period of duty-free trade, nor been very greatly affected by the opening of the Panama Canal for navigation, which took place in August, 1914. The Gulf ports, however, have increased their proportion of the export trade somewhat and of the import trade materially. The proportions of the Atlantic ports in the import trade were somewhat less during 1924-1928 than during 1910-1914, but the earlier percentage was again attained in 1929; their proportion of the export trade to the islands declined somewhat during both 1924-1928 and 1929 as compared with 1910-1914. The percentage of import trade coming from the Philippines through Pacific ports was practically the same in 19241928 as in 1910-1914, but decreased considerably in 1929, and their proportion of the export trade to the islands did not vary greatly during any of the periods reviewed.

Further details concerning annual and annual average values and proportions of United States trade from and to the Philippines, by American ports, during the five fiscal years 1910-1914, the five calendar years 1924-1928, and 1929 are shown in Table 32.

35 Collections of United States import duties and the transfer thereof to the Philippine treasury during the period when 75 per cent of the full United States tariff rates were still collected on Philippine products in accordance with sec. 2 of the act of Mar. 8, 1902, naturally were much larger than they were after the dutyfree admission of practically all Philippine shipments was inaugurated Aug. 6, 1909.

PARTICIPATION OF AMERICAN AND FOREIGN VESSELS IN PHILIPPINE OVERSEAS TRADE

The United States coastwise shipping laws were never applied to American trade with the Philippines, although the President was authorized to extend these laws to the islands under section 21 of the Merchant Marine act of June 5, 1920.

The principal significance of this fact is that vessels under foreign flags (that is, flags other than those of the United States or of the Philippines themselves) are permitted to engage in commerce between Philippine ports and between those ports and continental United States and its other possessions, whereas foreign vessels are not permitted to trade between ports of the continental United States or between those ports and Alaska, Hawaii, or Porto Rico.

Based on the total value of Philippine trade carried from and to all non-Philippine points, the average annual share of American vessels in this trade increased from 5.2 per cent during the 4-year (fiscal) period 1909-1912, and 9.4 per cent during the years 1913 and 1914, to 47 per cent during the six years 1923-1928, and to 48.1 per cent, or nearly one-half in 1929. It should be noted that the merchant marine of the United States engaged in foreign trade in general was far larger during the latter period than during the earlier and that the share of American vessels in the foreign trade of the United States with all countries increased materially. Japanese vessels, although to a much smaller degree, also increased their proportion of the trade of the Philippines with other countries, their proportion of the total being 6.4 per cent in 1923-1928 and 8.7 per cent in 1929 as compared with 4.4 per cent in 1909-1912. On the other hand, the share of British vessels, which formerly dominated in this trade, fell from 67.7 per cent in the first period to 32.1 per cent in 1923-1928 and fell still further in 1929. The share of German vessels in the Philippine trade was 7.9 per cent in the earlier period and 3.2 per cent for 1923-1928, but rose somewhat in 1929.

Of the total average annual value of shipping trade in both directions between the Philippines and the United States during the six calendar years 1923-1928 and 1929, respectively, American vessels carried 57.1 and 59.8 per cent; British vessels, 29.5 and 26.4 per cent; Japanese vessels, 5.4 and 7 per cent; Norwegian vessels, 1.6 and 5.8 per cent; while vessels of other nationalities carried smaller proportions. Further details respecting participation of different flags in Philippine trade during 1909-1912, 1913-1914, 1923-1928, and 1929 are shown in Table 33.

APPENDICES

53

PHILIPPINE INSULAR GOVERNMENT REVENUES FROM TAXATION AND UNITED STATES REVENUES TRANSFERRED TO THE INSULAR TREASURY

Philippine Insular Government Revenues from Taxation, Including Customs Import Duties, 1903-1929.

No Philippine government revenues accrue to the Treasury of the United States. Increased Philippine importations of duty-exempt American goods after 1909 tended to arrest a possibly greater growth in importations from non-American sources, but they did not actually reduce the average annual values of non-American goods imported into the islands, practically all of which continued to be dutiable; nor was there an actual decline in the amount of insular revenue derived from import duties. In fact the average annual amount of total import duties collected in the islands increased from $6,451,557 (collected on both non-American and American goods) during the three fiscal years 1907-1909, to $6,638,647 (practically all on non-American goods) during the three fiscal years 1911-1913.

Comparing the five fiscal years 1905-1909, preceding duty-free import trade from the United States, with the recent 5-year period 1924-1928, average annual per capita Philippine import duties were $0.764 during the earlier, and $0.726 during the later period; they were $0.82 in 1929, the highest on record. This indicates that receipts of Philippine taxation from import duties in the long run did not keep pace with the growth in Philippine population (except in 1929), and, further, that the importance of such receipts during postwar years, under duty-free trade conditions with the United States, may have been considerably reduced in money of pre-war buying power. Meanwhile the comparative per capita decrease in receipts from Philippine import duties was compensated by increased receipts from other sources of insular taxation in a degree more than sufficient to meet the increment in Philippine population and insure the pre-war equivalent of insular revenues from taxation in buying power.

During the five fiscal years 1905-1909 (preceding duty-free trade from the United States), receipts of the insular government from customs import duties averaged 60 per cent of all revenues from taxation; during 1924-1928 (when duty-free trade with the United States had been long established) this figure dropped to 29.6 per cent, and in 1929 it was 31.1 per cent.

The average trend of Philippine insular government revenue on a per capita basis during 1905-1909, 1919-1923, 1924-1928, and 1929 is indicated in the following tabulation:

Philippine insular government per capita revenue from taxation (annual averages)

• Preceding the inauguration of duty-free trade from the United States, Aug. 6, 1909.

1 See Table 34.

54