BOI set to make changes in vehicle development program

The Board of Investments (BOI) is set to make some changes in the Motor Vehicle Development Program (MVDP).

This was disclosed over the weekend by Trade and Industry Secretary Manuel Roxas II. Roxas, however, refused to reveal the proposed changes.

"The changes in the MVDP may be announced by no less than President Arroyo herself during her State of the Nation Address (SONA) this month," Roxas said.

All Roxas would reveal about the possible changes in the MVDP is that the goal of the revision is to allow one or two more car manufacturing firms to become exporters of completely built-up units (CBUs).

At present only Ford Motors Phils. Inc. is exporting CBUs under the ASEAN Industrial Cooperation (AICO) scheme.

Under the AICO scheme. Ford Philippines manufacturers a specific model such as the Laser or Protégé and exports the CBU to Thailand.

In exchange, Ford Thailand would manufacture another model such as the Ford Escape and Ranger and exports these units to the Philippines as CBUs.

Under the present MVDP, the local participants are supposed to assemble vehicles by importing completely-knocked down (CKD) packs and adding some locally manufactured parts.

Most of the MVDP participants are discouraged from importing CBUs through a 30-percent tariff as against a three-percent tariff on CKDs of passenger cars and seven percent on commercial vehicles.

However, with the implementation of the ASEAN Free Trade Agreement (AFTA) next year, all member countries are supposed to bring down their tariff walls to between zero and five percent except for a few sensitive items.