BOI mulls consultant to review car development program

The Board of Investments (BOI) is studying the possibility of hiring a consultant to review the Motor Vehicle Development Program (MVDP) and make sure that it is consistent with the rules of the World Trade Organization (WTO).

One area of concern is an MVDP rule requiring participants to source at least 40 percent of their car parts from local parts manufacturer, which is said to be in direct violation of the Trade-Related Investment Measures (TRIMS) agreement under the WTO.

The BOI is reportedly negotiating with WCI Consulting Pte. Ltd. to conduct a review of the MVDP to make it WTO consistent in preparation for the full implementation of the TRIMS agreement by the Philippines.

The BOI would have to pay WCI a "token" fee. However, the BOI still has to check with the Commission on Audit (COA) regarding the rules and procedures in hiring a consultant for a "token" fee. Otherwise, the BOI may be in violation of COA regulations that normally require public bidding in the award of government contracts.

WCI is an affiliate of the US-based law firm White & Case LLP which assisted the Macedonian government in 1997 in reviewing its national car program and providing advice in the restructuring of its program to be WTO consistent.

According to W&C, the Macedonia national car program is similar to the Philippines’ MVDP in that it also offered tax and duty preferences to automobile manufacturers meeting certain requirements.

In that case, W&C created appropriate language to establish that the benefits would be based on criteria that are neutral and non-discriminatory so that the new program would stand up to the test of WTO consistency.