DTI holds off publication of EO removing tariff on CBU automobiles

The Department of Trade and Industry (DTI) has decided to hold off the publication of a signed Executive Order (EO) removing the tariff on completely build up (CBU) motor vehicle at the behest of local car manufacturers.

“I have requested to hold the publication of the executive order until we have clarified the matter,” Trade Secretary Peter B. Favila told reporters.

An EO takes effect after it has been published in a newspaper of general circulation.

In an interview over the weekend, Favila said his office decided to grant the request of the association of local car manufacturers to defer the publication of EO 617.

The Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) wrote a letter to Favila questioning the removal of tariffs on CBUs.

CAMPI is urgently requesting that the publication of EO 167 be held in abeyance pending a full review of the said chapter in order to determine the necessary corrective measure to address the industry concern,” the July 10 letter stated.

Despite the order, Trade Undersecretary Elmer C. Hernandez clarified that there is nothing wrong with the EO.

Hernandez underscored that there is only a need to issue clarification. “There has to be a footnote to indicate that the EO does not include those that are prohibited under the law such as the importation of used motor vehicles.”

Under an earlier order, EO 156, motor vehicles were listed as a prohibited item given that the motor vehicle industry is a significant contributor to the country’s economic output, employment, investments and exports.

“We will defer the publication until proper amendments are put in place,” he stressed.

An industry player who spoke under the condition of anonymity said the reduction of tariff for used CBU is against the law and should not be allowed.

With regards to the importation of parts and components, the source said that when the agreement was originally signed in 2004, local car manufacturers were not producing the questioned items.

“Now that we are producing it, the best thing to do is to go back to another public consultation,” the source said.