Car players seek more incentives

Local automotive industry players are asking the government that they be extended more incentives, citing the need for support in a bid to make the Philippines the auto production hub in this side of the world. Elizabeth Lee, Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) president, told an exclusive roundtable with The Manila Times last week that while the incentives being extended the industry are “competitive,” the government can provide more support.

“Automotive assembly is one of the very few remaining manufacturing industries in the Philippines,” Lee said, adding that the industry directly employs 74,000 workers in the assembly and auto-parts manufacturing sectors, and about half a million Filipinos are benefited.

She said that the government “gets a lot more in return,” such as additional employment and revenues, from automotive investments that were granted fiscal incentives.

Lee noted that neighboring countries, especially Thailand, have become fast-rising auto manufacturing investment destinations because of the lucrative incentive packages being given to investors there.

“We don’t live in a vacuum; we should make our incentives competitive,” she said.

Lee added that the country must step up its competitiveness amid the zero-tariff regime-covering members of the Association of Southeast Asian Nations.

Asean groups the Philippines, Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam.

Prime position
Lee said that Southeast Asia is being looked at not only as a growing vehicle market but also as a viable automotive production hub.

“The Philippines is in a prime position, especially with optimism because of a new government. There is so much opportunity for the domestic auto industry,” she added.

According to her, the industry is utilizing only about 40 percent of the production capacity available in the
country.

She said that this underutilized capacity, once tapped by additional investments both for the domestic and export markets, would generate more jobs.

“We have to ride the crest of the wave, not [stay] behind it,” Lee added.

During an interview on Monday, Rommel Gutierrez, Toyota Motor Philippines Corp. vice president for corporate affairs, told reporters that the company’s expansion plans would depend on the extent of support that the government could extend.

Gutierrez said that there should be incentives granted to vehicle assemblers as long as they produce.

Current incentives scheme provides perks to new models assembled here, but these are phased down and end after a few years.

Also, Lee said, efforts to combat vehicle smuggling should be further intensified.

Most Philippine neighbors, she added, do not allow importation of used vehicles.

The Philippines, under the previous Motor Vehicle Development Program and the recently approved Comprehensive Motor Vehicle Development Program both restrict—but not prohibit—the entry of used imported vehicles and parts.

Lee said that while there have been inroads in curbing smuggling—about two-thirds of vehicle registration now come from the formal sector, compared with the 60-percent share of the informal sector in 2004—“smuggling is still here.”

“There should be stricter implementation of the restriction on importation of used vehicles,” she added. –BEN ARNOLD O. DE VERA REPORTER, Manila Times