MANILA, Philippines - The Board of Investments (BOI) said yesterday that there will be a new Motor Vehicle Development Plan (MVDP) dubbed as the MVDP II specifically for vehicle exporters in order to encourage the sale of locally made automobiles overseas.
“The government must improve the incentive in order to increase the local manufacturing. There will be bigger tax incentives for exporters,” BOI managing head Cristino L. Panlilio told reporters in an interview.
Panlilio said that there will be two MVDPs. The first one is the general one which was already signed into law by former President Arroyo under Executive Order 877-A. The BOI is already in the process of crafting the implementing rules and regulations (IRR) which is expected to be completed before the end of the month.
The second one will focus on the export of vehicles. MVDP II will have greater incentives but will take a longer time to complete.
The clarification was made in light of complaints made by the Chamber of Automotive Manufacturers of the Philippines Inc (CAMPI) and the Philippine Automotive Competitiveness Council Inc (PACCI) that the reengineering of the MVDP will delay the implementation and will have a negative impact on the industry.
“The industry should not close down their doors on new opportunities because it may be better than the existing one,” Panlilio said.
This means that contrary to fears of auto players, the BOI will be able to meet their Aug. 31 deadline for the IRR. “I already have the first draft of the IRR,” he said.
According to Panlilio, the local industry cannot rely solely on the domestic market because it is too small especially when compared to our neighbors like Thailand and Indonesia. Currently, only Ford Motor Philippines exports completely build up (CBU).
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Panlilio said they are willing to give additional incentives for car manufacturers who will be selling locally made vehicles overseas. “We need to go to Congress to get additional tax perks.”
Panlilio, who is also an undersecretary of the Department of Trade and Industry (DTI) said that the current MVDP does not talk about exports. He said exporting will widen the base of the industry, increase the demand for vehicles and create more jobs.