Letter from the table: What should the Landed Cost Diary prove?

RC/TR/2026/T.1 · 29 July 2026 · Stance: Amend

Chair, I have a question about strategy before the Trade Council moves from evidence gathering to a draft fix: what do we want the Landed Cost Diary to prove? That small traders need more time to adjust when trade rules change, or that they cannot make a sound decision in the first place if the cost of bringing goods in is still a moving target?

I ask because my own diary entry is not about a dramatic tariff. It is about the difference between a number I thought I could plan around and the amount I actually had to find. On 4 May, I received an estimate for a small shipment of operating inputs. The goods were valued at PHP 36,800. Freight was listed separately at PHP 8,900, and the estimate showed another PHP 7,600 for duties and taxes, with clearance and handling described as estimated charges. I put the total in my cash plan and set aside money for it.

The shipment arrived later that month. On 21 May, the final amount I had to pay before release was PHP 64,180. That included freight, customs duties and taxes, and charges from the intermediaries handling transport and clearance. The figure was PHP 7,680 above the estimate. I am not saying anyone acted improperly. Some items were estimates, and customs assessment depends on the declaration and the applicable classification and rules. My problem was that I could not see, in one place and in terms I could compare, which assumptions had changed and which costs were outside the estimate.

I tried to work backwards. I checked the Bureau of Customs’ public information and the tariff information available to me. Under the Customs Modernization and Tariff Act, the PHP 10,000 de minimis threshold was plainly not relevant to a shipment whose declared goods value was PHP 36,800. Import VAT is generally 12%, while the customs duty depends on matters including tariff classification and origin. That tells a trader

important things, but it does not tell me what figure to use before I commit money, or how much room to leave for charges that are not taxes.

I asked the intermediary for a clearer breakdown: the classification and duty assumption used in the estimate; what value and exchange rate the calculation relied on; which amounts were taxes, freight, or service charges; and which could still change before release. I eventually had more detail, but not in a format I could line up against the original estimate. By then, the useful moment had passed. I had already placed the order and needed the shipment. The extra PHP 7,680 was not an abstract variance. It was money that had to come from somewhere else in the month’s plan.

This is why I would amend the strategy we are gathering evidence for. I support size-based thresholds, plain-language guidance, and a phase-in when new trade rules or tariffs take effect. Those are necessary. But I do not think our case should be framed mainly as a request for small traders to be excused from complexity. We also need to show that an importer should be able to understand the likely total cost before committing, and to identify what is firm, what is estimated, and what may change.

For the Landed Cost Diary, could we ask members to record not only the estimate and final bill, but also the date of each, the information supplied with the estimate, and the explanation given for any difference? We should avoid asking people to submit sensitive commercial details they do not need to disclose. But a consistent record of the assumptions—classification, duty rate where known, freight, insurance, taxes, intermediary charges, and the estimate’s validity date—could help us distinguish a tariff problem from a transparency problem, and show where the two overlap.

For the eventual fix, I would like us to consider a plain-language estimate format for forwarders and customs brokers. It would separate customs duties and taxes from freight and service fees, state the assumptions used, flag items that cannot yet be confirmed, and explain what could cause the final charge to differ. It should not pretend that a private provider can guarantee a customs assessment. It should make uncertainty visible early enough for a small trader to decide whether to proceed, ask a question, or price in a buffer. When new rules or tariffs are introduced, clear guidance and a reasonable phase-in would give traders time to understand those changes before they face them at the border.

So my question to the chair is this: should the diary help us argue for relief from new trade burdens, or should it also help us make the cost of existing trade legible? I think the council should amend its approach to include both. A threshold can reduce who has to comply. A phase-in can give people time. But neither tells a small importer whether the amount on the estimate is close to the amount needed to get a shipment released. If our evidence can show that gap carefully, without turning one person’s experience into a claim about every shipment, the eventual standard will be more useful.