DTI vows fair process in safeguard measure on motor vehicles

MANILA, Philippines — The Department of Trade and Industry (DTI) has committed a fair and balanced process for automotive firms in its probe to determine if imposing safeguard duty on vehicles is warranted, even as it stressed the need to strengthen local manufacturing.

“We informed all concerned we will be doing an investigation. It will go through the process, see if there’s a reason to impose. We assured the car companies that it will be a balanced ruling, taking into  consideration all the stakeholders’ position,” Trade Secretary Ramon Lopez told reporters.

“But with that, we impressed upon them that it’s high time we give importance to the local manufacturing industry,” he said.

He said the government would want to achieve a balance by supporting local manufacturers and encouraging new players in the country.

Earlier this month, the DTI launched a preliminary investigation on the possible application of safeguard measure on vehicles based on a petition filed by workers’ group Philippine Metalworkers’ Alliance amid rising imports.

Republic Act 8800 allows the country to impose safeguard measure or higher duties on imports as a form of relief to local players when increased imports pose threat or cause injury to the domestic industry.

Toyota Motor Philippines Corp. (TMPC) first vice president and Chamber of Automotive Manufacturers of the Philippines Inc. president Rommel Gutierrez said they have been notified by the DTI of the move to initiate preliminary investigation and a reply would be given based on the questionnaires received.

“It should be studied thoroughly by DTI. They should look at it seriously because it may also have negative impact,” he said.

Lopez said he has a positive outlook on the automotive industry for this year as it posted higher sales last year following a challenging year in 2018 when higher taxes on vehicles took effect and dampened demand for cars.

Sales of the Philippine automotive industry breached the 410,000 units target in 2019.

While the outlook for the automotive industry’s sales performance is positive, he said production may be affected due to challenge in the supply chain amid factory shutdowns due to the COVID-19.

Given recent events, he said manufacturers including automotive firms should consider diversifying sourcing of parts and finding local sources.

Asked if the COVID-19 has affected operations of TMPC’s plant in Laguna which assembles the Vios and Innova, Gutierrez said the firm still has enough stocks of parts for now.

He said efforts to continue to increase localization of parts being used is always part of the firm’s plan.

When it comes to the sales performance for this year, he said Taal Volcano’s eruption is expected to have an impact, with sales last month likely lower than expected.

Still, he said the firm expects to post higher total sales this year from last year.

TMPC president Atshuhiro Okamoto said the goal for this year is to continue to grow sales.

“New car business is already strong, the demand…but still, there is some room for growth, not only new car business, but also more driver here, improving value chain and mobility business,” he said.

Last year, TMPC had a 39.5 percent market share as it sold 162,011 units, up 5.9 percent from the 153,004 units sold in 2018.