Tax ‘non-issue’ in Honda closure

By Ma. Reina Leanne Tolentino, TMT, Manila Times, 4 Mar 2020

The decision to close its car factory in Santa Rosa, Laguna, has nothing to do with excise tax, according to Louie Soriano, Honda Cars Philippines Inc. (HCPI) spokesman.

On Tuesday, the House Committee on Labor and Employment conducted an inquiry into the impending closure, which will leave 380 employees jobless.

Excise tax or sin tax is levied upon gasoline, among others, which raises the price of vehicles.

Soriano clarified that the closure of the factory is “basically a strategy of Honda company.”

He said it was not the decision of Honda Cars Philippines to close the factory but that it was one made by the headquarters in Tokyo.

Soriano added that the decision “has nothing to do with the government policy or the labor union.”

He said the decision was also based on “the efficient allocation and utilization of the resources.”

The closure of the Santa Rosa plant takes effect on March 25.

When asked on the separation pay of Honda Philippines workers, Ariss Santos, the external lawyer of HCPI, said the separation pay agreed upon was “2.8 months per every year of service across the board regardless of the tenure.”

Each employee will receive a one-time lump sum of P100,000 cash.

Also, the workers’ health maintenance organization (HMO) coverage has been extended until the end of the year.

“Plus, as committed by the management in the settlement agreement, there will be a job fair that will be conducted on the third week of March,” Santos said.

Soriano said the average years of service of the employees is 20 years and the average salary of an ordinary employee is P35,000.

A statement said, “The HCPI will continue its automobile sales and after-sales service operation in the Philippines, through the utilization of Honda’s Asia and Oceania regional network.”

“Honda will continue providing highly attractive products to its customers in the Philippines and continue contributing to the local society, which has been an ongoing effort for the last 50 years since Honda was established in the Philippines,” the statement read.

The HCPI was established in 1990 and began production in 1992.