Toyota seeks duty-free import of 3-L vehicles

MANILA, Philippines - Toyota Motor Philippines (TMP) will ask the Japanese government to carefully consider the duty-free imports of three-liter vehicles during the renegotiation of the Japan Philippine Economic Partnership Agreement (JPEPA).

TMP president Michinobu Sugata told reporters the duty-free entry is a difficult matter. “We are asking the Japanese government to carefully discuss this.”

TMP is currently producing the Vios and Innova models in its in Sta. Rosa, Laguna plant.

An industry insider said the Philippines is not keen on negotiating the removal of tariff for 3-L vehicles and below.

The insider said that although the JPEPA is clear that the two governments must discuss the tariff on these vehicles, the agreement does not specifically say when the negotiations should be. “There is no deadline for this,” the insider said.

“The Philippines is avoiding this because we do not want to lower the tariff because it will be bad for our local manufacturers,” the source added.

Currently, the vehicles produced here are 3-L and below. Once the tariff is lowered or even removed, imported counterparts may come in cheaper, thus killing the local auto manufacturing industry. “We cannot afford to allow all small cars to enter without tariff.”

In an earlier interview, Assistant Trade Secretary and director of the Bureau of International Trade Relation Ramon Vicente Kabigting said the Philippines is asking for some help from the Asian Development Bank to come up with a study on JPEPA so that the government could be guided during the review. 

Kabigting explained that the five-year prescriptive review period started in September 2006 when then President Arroyo and then Japan Prime Minister Junichiro Koizumi signed in Helsinki, Finland the agreement, and not in December 2008 when JPEPA became effective following the ratification of the Philippine Senate.

However, he cleared that the review will not lead to the Philippines’ abrogation of the treaty. Kabigting explained that the review is not a re-opening of the JPEPA but a scheduled review.