Petronas Dollar Purchase and Payment of Custom Duties

PETRONAS DOLLAR PURCHASE AND PAYMENT OF CUSTOM DUTIES

Aside from the transaction cycle, I have learned other essential matters including dollar purchase and payment of BOC duties. This aids me in painting a clearer picture on the role of the treasury section.

Purchase of Dollars

Petronas Energy Philippines (PEPI) imports LPG from its mother company Petronas Trading Corp. (PETCO). Since PEPI doesn’t have a dollar funded account, it has to purchase dollars from time to time to make its payment or remittance. In completing the dollar purchase, PEPI has to meet the requirements set forth by the Bangko Sentral ng Pilipinas or the BSP.

BSP Policy on Dollar Purchase

BSP requires from every entity to present certain documents before any dollar purchase. These are the commercial invoice and the bill of lading (shipping documents). The type of purchase depends on the available documents the entity has.

Sample Commercial Invoice from Google.com

Sample Bill of Lading from Google.com

1. With Documents

a.      Direct remittance - The commercial invoice used in this transaction does not have a fixed term. However, the purchase should be done within twenty-nine (29) days from the date of the bill of lading.

b.     Open Account- The entity has to register with BSP on or before 10 days from the maturity date of the invoice regardless of the period stated in the bill of lading. Payments to LPG suppliers most often than not falls to this category.

2. Without Documents- The entity does not have the required documents while purchasing or the terms of the commercial invoice or the bill of lading is already due. This is common in settling the accounts with suppliers of LPG accessories like regulators. Usually, these suppliers ask for a down payment before shipment of goods in which case the supplier has not yet issued the necessary documents.

In purchasing with documents, the entity has the privilege to buy at the lowest rate. If without documents, the entity purchases dollars with a premium estimating to 55 to 75 cents per dollar.

Obligation to the Bureau of Customs

One time, I was asked to make a summary of payments to Bureau of Customs (BOC). I was eager to know about the process and asked my supervisor regarding the process..

The banks (accredited ones) facilitate payments to BOC. The latter electronically lodges the Statement of Settlement of Duties and Taxes to the respective banks of payers. Every transaction has an IEIRD # with a corresponding entry to the BOC’s system.  The entity has to pay a manager’s check within 15 days from the date of lodging. Failure to do so means payment of fines.

In PEPI, the treasury officer approximates that the bank informs the entity for payment of BOC duties two to three days from the date of lodging giving them 12 days to make the payment.

Summarizing BOC Payments

Photocopying

Thanksgiving at PEPI