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Since Singapore is close to key eCommerce markets in Southeast Asia, merchants looking to expand beyond national borders have a lot to look forward to. One growing market to keep an eye on is the Philippines. While the eCommerce scene is in its nascent stages, the Philippines currently enjoys 4.54 billion internet users, and 76% of them have purchased goods online in 2020.1
The Philippines’ eCommerce market currently stands at USD 1 billion in 2020, and is forecasted to grow to USD 1.4 billion at a Compound Annual Growth Rate (CAGR) of 7.9%.2 If you’d like to find out more information on this country, we’ve covered them extensively on our Philippines country guide.
Most eCommerce orders in the Philippines tend to take place in the Metro Manila region. This region consists of 16 cities, which includes the likes of Manila, Quezon City, Makati, and more. This region also enjoys a population of 13 million people, making it the most populous area in the Philippines.3
However, in light of COVID-19, international flights have been limited to curb the virus’s spread. Therefore, it helps to stay on top of regulatory changes in Singapore and the Philippines to keep afloat on what’s happening in the region and plan your supply chain accordingly.
The logistics supply chain can vary depending on your requirements to ship from Singapore to the Philippines. But generally, the shipping process would usually follow these steps.
The first mile delivery stage in international shipping refers to the stage where your shipment leaves your address, be it your own storefront, office, or warehouse. Before your goods can leave your address, the product has to be packaged and labelled appropriately to facilitate smooth cross border shipping.
Packages may sometimes go through bumpy rides during the shipping process, like turbulence. Thus, having extra padding for fragile items, like bubble wrap and packing peanuts, is recommended to prevent from deforming your products during shipping. To learn more about the best practices in packaging your goods, we’ve covered this topic in a previous article.
Additionally, you must ensure that your shipping labels and the appropriate customs documentation is visible and accessible for customs officers to inspect the shipment. We have previously covered the best practices in labelling your shipments along with other guides such as handling shipping delays in our resources for B2C shipping to Southeast Asia.
Once the shipment is ready to be handed to your shipping partner, you can choose to drop off your parcel at your shipping partner’s drop-off point, or have it picked up from your address. Most shipping partners have a cut-off time for submitting orders for drop offs and pick ups so that they can optimise their route.
If you’re shipping a B2C parcel, it’ll be consolidated at a transportation hub with other packages heading towards the same destination country before it can clear customs. Since B2B shipments already have a larger weight and volume than B2C shipments, they can be transported directly to the origin warehouse for customs clearance.
Some warehouses you could consider in Singapore also have transportation hub capabilities, and are able to consolidate your parcels and have it ready for customs clearance within the same location such as those within Singapore’s Free Trade Zone.
Free Trade Zone warehouses also allow you to defer tax charges on non-dutiable goods until they enter a country’s official borders. This helps with both cash flow and also as a storage area for regional hubs in Southeast Asia like Singapore.
As your shipment arrives at the customs warehouse, the parcel would need to be cleared by Singapore’s customs for export. This is where the customs officers will inspect the parcel’s contents and shipping documents and determine if it’s exportable from Singapore. If you’re shipping a B2B shipment, you may check for specific customs documentation for export in Singapore’s Customs website.4
When it comes to freight, shipping your goods from Singapore to the Philippines can be done via air freight and sea freight.
For merchants shipping B2C parcels, air freight is generally the faster option, especially if you don’t have a consistent order volume and need your parcels to reach the destination country quickly.
To ship into Metro Manila in the Philippines, your shipment will typically leave via Changi International Airport (SIN) and then enter Ninoy Aquino International Airport (MNL). Usually, airfreight’s speed makes it the preferred option for eCommerce merchants who want to test the market, as inventory will mostly be held in Singapore.
However, due to the limited number of flights due to the COVID-19 pandemic, prices for air freight have increased from the lack of cargo space. The limited number of flights may also cause delays and affect the delivery timing for shipments.
On the other hand, sea freight is generally more cost effective for shipping in bulk. However, it is slightly slower than air freight. When managing your inventory, you’ll need to take into account the estimated delivery date so that you can plan your supply chain accordingly.
The main port of Metro Manila is the Port of Manila (PHMNL), and leaves from Singapore from the Port of Singapore (SGSIN). This mode of transport is preferred if you are looking to expand into the Philippines aggressively, and is typically paired up with having a local distribution centre within Indonesia for storage and fulfilment within the country.
With the COVID-19 pandemic around, sea freight could be a good alternative to air freight even for B2C deliveries considering the shortage of available international flights. While slightly slower compared to pre-COVID air freight timings, it is still preferable to facing possible delays if you choose air freight during this period.
Once your shipment arrives in the Philippines, it’ll be transported from the airport or port to a customs warehouse for clearance. This is where Philippine customs officers will inspect your shipment and shipping documents and determine if your product is allowed to enter the country.
To clear customs for import into the Philippines, you or your shipping partner would generally need to provide the following documents:
If your goods are below the Philippines’ de minimis value of PHP 10,000, you don’t need to pay for import duties and taxes.
The de minimis rate refers to a price threshold where fewer or no duties and taxes are charged if the shipment’s value is below that point. This value takes into account your shipment’s CIF value, which includes your good’s price, shipping fee, and insurance costs if any.5 However, this exemption only applies to shipments sent via air freight. Thus, if you’re sending your goods with sea freight into the Philippines, you still need to pay import duties and taxes.
But if your goods exceed the de minimis threshold, you’ll need to pay import duties in the range of 0% to 20% and a value-added tax (VAT) of 12%. The percentage of the import duties is determined by your product’s harmonised systems code (HS Code). You may find out the percentage of import duties for your specific goods in this Tariff Finder.6
Your shipment will enter the distribution stage once it has cleared customs. If the consignee is within the Metro Manila region, your B2B shipments can be delivered directly to the end address. B2C shipments on the other hand have to go through sorting at a transportation hub before it can enter the last mile delivery stage. However, if the address is in an area that is beyond where a truck or van can reach, your shipment will go through an additional domestic flight before it can be sorted and sent for last mile delivery.
Last mile delivery refers to the stage where your shipment is delivered from the destination warehouse to your consignee’s address. This stage of the delivery is done using vans. In this stage, your shipping provider will ensure that your shipment is received by the consignee. This is typically done through multiple delivery attempts and notifications to your consignee.
However, with the Enhanced Community Quarantine (ECQ) and General Community Quarantine (GCQ) in place due to COVID-19, last mile delivery throughout the Philippines may be delayed. In these exceptional times, it helps to be able to set expectations with your customers and consignees on delays, and to plan your supply chain accordingly.
With the knowledge of the full shipping process for sending your items from Singapore to the Philippines, you’re now in a better position to choose a suitable shipping partner. It’s best to find one who can cover the entire logistics supply chain from first mile to last mile, but having a logistics partner who is flexible can also be a boon if your supply chain is complex. When choosing a logistics service provider, it helps to consider the cost, speed, and delivery experience before committing to a shipping solution.
Considering the growth potential of eCommerce in the Philippines, expanding internationally into this market means that you’ll be getting a headstart from your competitors. To impress your potential customers in the Philippines, it helps to have a reliable shipping partner that can deliver on time. That way you can delight your customers with efficient eCommerce delivery speeds while ensuring that your hottest products are always in stock.
Looking to ship internationally throughout Southeast Asia? Contact us to find out how.
We have other guides on how to ship from Singapore to Southeast Asian destinations here:
For more information on Singapore as a destination, we also have these guide here:
Find out the process of shipping via air freight and sea freight from Hong Kong to Singapore including customs documentation here!
Getting accurate data on the shipping label is crucial in the cross-border shipping process. Find out how you can ensure data integrity for a smooth eCommerce delivery.
With different import duty and tax rates for every country and every type of item, customs payments may appear daunting. Read on to find out how customs clearance can be made smoother with delivered-duties paid (DDP) so that you can expand into the Southeast Asian market with a peace of mind!
Customs Clearance requires your shipment to gain official permission to enter a country and for the required duties and taxes to be paid. That's the gist of it, but there's more, click here to find out more!