No tariff hike for imported vehicles, says BOI

MANILA, Philippines - The Board of Investments (BOI) has assured auto importers that their fears of a higher tariff once the Comprehensive Motor Vehicle Development Program (CMVDP) is implemented are unfounded.

In an interview over the weekend, BOI Executive Director Efren Leano said that the Alliance of Vehicle Importers and Distributors (AVID) have written the government saying that the CMVDP might make the auto industry unfair to importers.

Leano said that AVID has been assured by both BOI Managing Head Cristino L. Panlilio and Trade Secretary Gregory L. Domingo that there are no plans to increase the 20 percent to 30 percent tariff on imported vehicles. “We have pointed out to them before that we have no plans to increase the tariff.”

Leano said AVID has been repeating the same complaint over and over again and the BOI has been giving them the same answer.

Leano said that there is nothing stopping the BOI from raising the tariff on imported vehicles because the tariff is unbounded and any upward movement will not violate any World Trade Organization (WTO) agreements. He said BOI can move the tariff any time but right now there are no plans of doing so. “Since it is unbound we will not violate the WTO if we increase the tariff.”

At the same time, Leano noted that they will not increase the tariff because even the local auto assemblers sell imported cars. “Even if you combined the imports of all AVID members, the imports of auto assemblers are larger so increasing the tariff will also be harmful to them. We want to look after the industry,” Leano stressed.

Further, Leano said that with regards to imports from Korea like Hyundai, the 20 percent to 30 percent tariff will go down come 2012 given the ASEAN-Korea Free Trade Agreement (FTA). Hyundai Asia Resources is one of the leading importers of vehicles given the success of its Tucson.

However, the tariff on imported vehicles from Europe is expected to remain at 30 percent because there is no FTA with Europe.

On the issue of AVID wanting a seat in the eleven man automotive council, Leano said that there are only four seats available for the private sector. As it is, there are already seven organizations of auto assemblers and parts manufacturers.

Leano said that it is up to Malacanang to choose who the four private sector representatives will be but he stressed that the CMVDP was crafted for vehicle manufacturers in order to encourage assembly in the Philippines and to revive the industry.

“The intention of the MVDP is for assemblers and parts manufacturers,” Leano said.