"Prices will stay basically the same since they (car manufacturers) have to offset the effect of the foreign exchange movement against the lower excise taxes," CAMPI said.
With passenger car prices expected to remain the same, CAMPI is projecting total sales to reach around 90,000 units for this year.
Under the new tax scheme pending in Congress, passenger cars would be subject to a lower rate depending on their wholesale price.
From an excise tax schedule of 15, 35, 50 and 100 percent for automobiles not covered by the exemption, the new tax rates of three, 15, 35 and 50 percent would be based on the price instead of engine displacement and fuel type.
Under the proposed set-up, vehicles worth P500,000 to P1 million would be slapped 15 percent. A 30-percent rate would be charged on those worth more than P1 million but below P2 million and vehicles worth P2 million and above would have to pay a 50-percent tax.
The exemption of Asian Utility Vehicles (AUVs) will be lifted.
Melchor Dizon, senior vice president of Mitsubishi Motors Corp. of the Philippines, said local car manufacturers have been using an exchange rate of 52.50 to $1 for their imports and have not yet adjusted their prices to reflect the recent weakening of the peso against the dollar.
CAMPI members, however, gave their assurance that they have been absorbing the foreign exchange differential since market cannot take a drastic change in prices.
"More likely, CAMPI members will just stagger the price adjustment over a certain period of time," industry observers said.