Government okays 6-month tariff cut on PUV spare parts

The Cabinet-level Tariff and Related Matters (TRM) committee has approved a temporary six-month tariff reduction on certain imported spare parts used by public utility vehicles (PUV) such as jeepneys and buses in a move to forestall an increase in transportation fares.

The tariff on spare parts not locally available will be reduced to three percent for those whose Most Favored Nation (MFN) rates currently stands at 10 percent and above.

For spare parts not locally produced and whose MFN rates are already below 10 percent, the rates will be brought down to one percent for a period of six months.

The temporary reduction is intended to help jeepney and bus operators refrain from increasing their fares following a series of oil price hikes.

TRM sources said the approval was made even as some spare parts manufacturers expressed concern about the temporary reduction.

They said some motor vehicle spare parts manufacturers are against the planned tariff reduction, fearing an influx of imported spare parts which could affect local spare parts production.

But last Friday, the government approved a complete liberalization of imports of spare parts not locally manufactured while a six-month temporary reduction of tariffs on specified spare parts was also approved for jeepneys and buses.

Batteries, which are not frequently used anyway, would not be included in the tariff reduction.

Some of the spare parts to be covered by the temporary tariff reduction include rubber hoses, pneumatic timers, tempered safety glass, oil filters, radiators, wiring harness, shock absorbers and a few others.

At present, the prevailing MFN tariff rates for spare parts ranges from three to 15 percent.

Under the World Trade Organization (WTO) mandate, MFN rates on spare parts are supposed to drop to between zero and three percent.