US businessmen for auto manufacturing

To develop local supply chain, create more jobs

American businessmen want the government to come up with a national automotive policy that puts focus on assembly and auto parts manufacturing because that would develop the local supply chain that would create more jobs in the country.

Robert Sears, executive director of the American Chamber of Commerce of the Philippines, told reporters in a press conference that government should decide which automotive activity would generate more jobs – developing the local auto supply chain or importation or trading of completely  built-up units.

Sears raised this point in light of the ongoing discussion among industry players and the Board of Investments on the crafting of the implementing rules and regulations of the new Motor Vehicle Development Program (MVDP) under Executive Order 877-A.

He cited that local supply chain whether in the assembly of cars or auto parts manufacturing will generate more employment opportunities than plain automotive trading or CBU imports. “I would lean towards job creation, forget who the players are but what should the national policy be. Is it supply chain development or imports?” Sears said.

Sears said that the Philippines will always be at a competitive disadvantage because of market size compared to the huge markets in Thailand and Indonesia and the high cost logistics cost in an archipelagic country.

That is why, he said, there is still the need for fiscal incentives because the playing field is not level.

“I am a firm believer in fiscal incentives. You don’t lose revenues because you gain something in return. We are not competitive in wages and electricity rates, so how can we compensate for that? So, why not give incentives,” he said.

He, however, said that even if government should prioritize the granting of incentives to local supply chain manufacturing sector, there is still room for CBU traders because not all vehicle models could be assembled locally. –BERNIE CAHILES-MAGKILAT, Manila Bulletin