DTI: Auto roadmap to offer perks, not subsidies

Trade Secretary Gregory L. Domingo: Incentives, not subsidies. INQUIRER FILE PHOTO

MANILA, Philippines–The Department of Trade and Industry is set to wind up discussions over the proposed automotive manufacturing roadmap, which will provide highly attractive fiscal incentives to a limited number of participants, and only for certain vehicle models.

On the sidelines of the Asean Business Awards Philippines 2014, Trade Secretary Gregory L. Domingo said the process was nearly complete, with an executive order already drafted.

The conditions to avail of the incentives remain the same as that previously reported despite the concerns expressed by some local companies. For instance, to avail of the incentives, automotive firms must be able to produce 40,000 units of a particular model each year, and invest at least $60 million for facilities that can produce large car components in the country, such as body stamp panels, large plastic parts like bumpers and dashboards.

Incentives, meanwhile, will include, among others, financial support meant to partly close the $2,000 per unit gap in the cost of producing a vehicle each year against the much lower cost of importing a car.

What the government is now ironing out are the mechanisms to roll out these incentives and implement the conditions set under the proposed automotive roadmap, Domingo said.

“These are not subsidies but incentives,” he explained.–Amy R. Remo