The Philippines and Saudi Arabia have been enjoying a long trade relationship for many years. According to Observatory of Economic Complexity (OED), exports from the Philippines to Saudi Arabia amount to US$152 million on an annualized growth rate of 2.38% (from US$84.4 million in 1995 to US$152 million in 2020)¹. However, despite these impressive numbers, there is still market potential in Saudi Arabia for businesses in the Philippines to tap onto. In its annual report (2022), the International Monetary Fund (IMF) has projected a growth rate of 7.6% for the Saudi economy, the highest growth rate among world economies². This is great news, as businesses in the Philippines can look towards Saudi Arabia as one of the target markets to export products to in the near future.
In terms of exporting goods, shipping from the Philippines to Saudi Arabia will require detailed planning and understanding of Saudi Arabia’s strict import rules and regulations, as violations will run the risk of penalties. Read on to find out more about Saudi Arabia's customs regulations and how businesses in the Philippines can start exporting to the country.
Exporting out from the Philippines
If a business is exporting out of the Philippines for the first time, they must register themselves as an exporter and provide proof of establishment as the Philippines’ Bureau of Customs’ Client Profile Registration System for exporters requires new exporters to provide certain documents in order to qualify for registration. As for exporters operating within the special economic zones (Ecozone) of the Philippines may also require additional registration. Exporters will require the Unique Registration Number³ received at the end of these registrations in order to start exporting from the Philippines.
Before exporting out from the Philippines, businesses are also required to produce the following documents:
Packing List;
Invoice;
Bill of Lading;
Export License;
Customs Export Declaration; and
Certificate of Origin.
Furthermore, there are additional permissions required on certain goods, as administered by the various government bodies. As such, it is important to ensure these documents have been properly filled up according to the export regulations of the Philippines to ensure a smooth delivery.
Importing into Saudi Arabia
Below is a list of documents that importers are required to present prior to importation:
Commercial invoice
Bill of lading
Certificate of origin (not required if the country of origin was clearly established)
Additional documents such as IECEE certificates and registration of products with concerned government authorities may also be needed during customs clearance.
Since February 2020, Saudi Arabia has introduced the SABER electronic platform. SABER is a mandatory platform that all importers must use when bringing goods into the region. Through the issuance of conformity certificates before they arrive in the country, it helps ensure that all imports abide by Saudi Arabia’s health and safety law.
Understanding Saudi Arabia’s customs regulations
Saudi Arabia has stringent rules when it comes to the importation of goods. All imported goods shipped into the country must be checked for security, religious, social, and economic reasons. Hence, shipping documents such as packing lists and certificates of origin are very important accompanying documents.
Custom fees are also imposed on shipments from overseas. According to the International Trade Administration, Saudi Arabia uses the Harmonized Commodity Description and Coding System to calculate their tariffs. Depending on the goods in question, countries outside the Gulf Cooperation Council are subjected to tariffs of no less than 5%, calculated based on the good’s volume.
With food being one of the top exports to Saudi Arabia, it is also important to note that the majority of Saudi Arabia’s food imports are subject to a 7% to 25% import duty, up to an import tariff rate of 40% ad-valorem⁵. It is of notable importance that Saudi Arabia has also recently increased its custom duty rates on certain goods⁶, these include food items, minerals, live animals, and chemicals.
Popular Items to Ship to Saudi Arabia
Before expanding to gulf countries such as Saudi Arabia, it is useful to know which goods in the Philippines are in demand and requested for importation into the country. According to OEC, as of the year 2020, the top exports from the Philippines to Saudi Arabia are tropical fruits (US$9.29 million) and computers (US$13.6 million)⁷.
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