Toyota seeks clarification on incentives given to auto sector under IPP

MANILA, Philippines - Toyota Motor Philippines (TMP) is asking the government to clarify the incentives given to the auto industry under the Investment Priorities Plan (IPP).

In an interview with reporters, TMP vice president Rommel T. Gutierrez said that they have asked the Board of Investments (BOI) for clarification on the amount of investments necessary to receive income tax holiday (ITH).

Gutierrez said that under the IPP, the auto sector was included in the strategic investments. Normally, strategic investments are large scale investments. “We just wanted clarification on the matter,” Gutierrez said.

In a separate interview, BOI managing head Cristino L. Panlilio said that auto firms need not infuse large amounts in order to gain ITH under the IPP.

Panlilio said that they will still follow the Motor Vehicle Development Plan (MVDP) which says that auto investments worth $8 million will receive ITH. “Strategic investments can be small or medium scale,” Panlilio noted.

Panlilio said that they did not give a separate subsector for auto investments because the 2011 IPP focuses on industries that are considered agitators or prime movers of the economy. Panlilio explained that incentives are for industries that will result in more investments.

Panlilio, who is also an undersecretary of the Department of Trade and Industry (DTI), said that manufacturing is a secondary sector that react only to progress in the economy.

Panlilio said that they will maintain incentives for the auto sector because it contributes to the gross domestic product (GDP). “We want the auto sector to react fast to the economic changes that is why we want to provide them incentives.”

In a related development, the local forestry sector is asking the government to give incentives to the industry in order to encourage investments and further development.

In a statement, Former Environment Secretary Ricardo M. Umali, past president of the Society of Filipino Foresters Inc. (SFFI) said that forest developments like plantations must be included in the IPP.

He said promoting private sector investments in forestry plantations and developments will help in the revival of the country’s forests while allowing the different industries that rely on forestry resources to thrive in a sustainable manner.