BOI mulls new incentive scheme for CBU exports

The Board of Investments (BOI) is studying a different approach in enticing local automotive manufacturers to go into production of completely built-up (CBU) units for exports.

Instead of immediately offering export tax credits, the BOI is reportedly planning to set up some sort of an automotive export program that will run for a limited period of time.

The idea is to establish a track record on which the government, in future, can base the grant of tax credits.

Meanwhile, local automotive manufacturers that have already indicated interest in going into CBU production for export will be encouraged to go ahead with their plans through the grant of preferential tariffs for their raw material imports.

Such a program is reportedly intended to "jumpstart" export production.

The BOI is supposed to come out with an export incentives program by next month to convince local automotive manufacturing firms to go into CBU production for export.

At present only one firm, Ford Motor Philippines is engaged in CBU exports. Ford currently manufactures the sport utility vehicle Escape for export to Thailand.

The American car firm had indicated that it is prepared to go into the export of another model depending on the export incentives program that the BOI is still drawing up.

Two Japanese car firms have likewise indicated their plan to go into CBU production for export.

Mitsubishi Motors and Honda Motor Co. had revealed their plans to Trade and Industry Secretary Manuel Roxas II during President Arroyo’s working visit to Japan earlier this month.

However, the CBU plans of Mitsubishi and Honda would depend on the export incentives program that the BOI is working on.