Auto industry seeks incentives to boost exports

MANILA, Philippines - The auto industry is asking the government to provide incentive packages to promote exports of vehicles, a move expected to boost local manufacturing and encourage more investments, the Chamber of Automobile Manufacturers of the Philippines Inc. (CAMPI) said.

In a letter to Board of Investments (BOI) managing head Elmer C. Hernandez, CAMPI president Elizabeth H. Lee said that the government can promote exporting activity by means of incentive packages such as automated export processing, single window system, elimination of export fees, provision for gestation period for start-up export program, among others.

However, in an interview over the weekend, Hernandez said that they cannot give what the private sector is asking for because they cannot put specific provisions regarding the excise tax because it is not within their powers.

Hernandez explained that only Congress can provide a more concrete tax exemption scheme for the automotive industry. “We can’t do that. We can’t set the excise tax.”

The government is revising its Motor Vehicles Development Plan (MVDP) to help the automotive industry expand in the country and be at par with our ASEAN neighbors like Thailand which has a thriving automotive industry.

The BOI is accepting position papers from various industry players. In the letter CAMPI wrote, they also asked the government to expand the completely knocked down (CKD) production and its market.

CAMPI said that this must be initiated through concrete measures to attract investments to include the lowering of the cost of doing business such as removal of administrative costs, process improvement and restructuring of excise tax to support the CKD segment. Support measures should be implemented to ensure the development of the competitiveness and capacity utilization of the parts manufacturing and auto support industries.

CAMPI also asked for the strengthening of the prohibition on used vehicles parts and components by expanding the coverage of the prohibition, prohibiting advertisements, and with BOI coordinating with other government agencies to harmonize existing policies and programs.

The prohibition must specifically cover locally produced vehicles and those not covered by the prohibition must be regulated. All allowable used importations must also comply with type approval emission and safety standards with certifications from the country of origin. The prohibition should likewise require the government not to purchase or accept donations of prohibited used vehicles, parts and components.

Also CAMPI said there must be a program for emerging technology and its support infrastructure such as electric, hybrid, CNG and other alternative-fuelled vehicles including recharging or refilling stations and testing facilities. It should also include the development of road infrastructure.