Landed Cost Philippines: duties, 12% VAT and the fees resellers forget
Your supplier's invoice is only the first line of your real cost. By the time an imported product reaches your door in the Philippines it has picked up freight, an exchange-rate spread, customs duty, 12% VAT, brokerage and delivery. That total, divided by the units you ordered, is your landed cost per unit — the number every pricing decision should start from.
Below is the formula, the de minimis rule, and a worked peso example. When you're ready with your own numbers, run them through the reseller profit calculator.
The formula
How landed cost is computed
- 1. Goods value in pesos. Supplier price per unit × quantity × your exchange rate. Use the rate your bank or supplier actually gives you, not the mid-market headline rate.
- 2. Dutiable value. Goods value + international freight (+ insurance, if any). Philippine customs values shipments on this basis.
- 3. Customs duty. Dutiable value × duty rate for your product's HS code — commonly 0-15% for consumer goods.
- 4. Import VAT. (Dutiable value + duty) × 12%. VAT is charged on top of duty, so duty raises your VAT too.
- 5. Local fees. Brokerage, processing, wharfage/arrastre for sea freight, forwarder handling, and last-mile delivery.
- 6. Divide by quantity. Total ÷ units = landed cost per unit. Add packaging and labelling to get your all-in unit cost.
De minimis
The ₱10,000 duty-free threshold
Under the Customs Modernization and Tariff Act, shipments with a dutiable value of ₱10,000 or below are generally released without duty and tax. That is why small sample orders often arrive with no bill, while your first bulk order suddenly attracts duty and 12% VAT. Deliberately splitting one order into several small parcels to stay under the threshold is treated as a violation, so plan for duty on real inventory buys and confirm the applicable rate with your broker or forwarder.
Worked example
50 units at USD 5, rate 58.5, 5% duty
| Goods value (50 × USD 5 × 58.5) | ₱14,625.00 |
| International freight | ₱3,000.00 |
| Dutiable value | ₱17,625.00 |
| Customs duty at 5% | ₱881.25 |
| 12% import VAT | ₱2,220.75 |
| Brokerage & local delivery | ₱1,500.00 |
| Total landed cost | ₱22,227.00 |
| Landed cost per unit | ₱444.54 |
At ₱444.54 per unit, a ₱650 Shopee listing looks comfortable — until ~11% in marketplace fees comes off the top. That is the gap the profit calculator closes.
FAQ
Landed cost FAQ
Educational estimates only — duty rates depend on your product's HS code. Confirm with the Bureau of Customs, your broker, or your forwarder before pricing.