CARS on the table

Once more with feelings: Let the good times roll again and again for the “local” automotive sector which, actually, has always been only foreign car companies.

The Aquino (Part II) administration just granted foreign car firms the first priority—meaning, ahead of any other key economic sector—in getting tens of billions of pesos in government largess called “investment incentives.”

The administration said it was ready to give away those incentives to foreign car companies under a new program called CARS.

That should be the “comprehensive automotive resurgence strategy,” created by Executive Order No. 182, issued in 2015 by our leader, Benigno Simeon, aka BS.

Just before Christmas Day, the Department of Trade and Industry hurriedly published what news media termed as the “long awaited” rules on CARS.
It took the DTI only less than six months to come up with the rules, which should be a record breaking feat of sorts in this foot-dragging administration.

According to reports, the Aquino (Part II) administration would be ready, willing and able to give away—in no time at all—those tens of billions of pesos in benefits to the “local” automotive sector—i.e. foreign car companies.

To think, the administration started the program even with less than six months remaining in the term of our leader BS. Hah—talk of last minute!
In fact, just a few days after the publication, based on the betting trend in business circles, word went around that two Japanese companies would be outright shoo-ins for this CARS bonanza.

They should be none other than Toyota and Mitsubishi, two of the original partakers of the various but continuous automotive programs of the Philippine government in the past 50 years or so.

How come nobody was surprised, even if Mitsubishi was the car firm whose little affair our leader BS had to attend in January last year, thereby forsaking the SAF 44?

Based on the 2016 budget, as the Aquino administration gasped for its last breath in Malacañang, it was still in the mood to give away more incentives.
It would reportedly bestow upon big business almost P290 billion in incentives this year, a jump of 36 percent from P239 billion in 2015.

Thus, the boys of our leader BS proudly announced that the administration should now be ready to handpick five more sectors that would get those additional billions of pesos in incentives.

Guess what—the first priority in the new package of incentives should be foreign car companies, as determined by the Aquino (Part II) administration.
Reports quoting the boys of our leader, BS, said that in the next six years of CARS, the government would give away P27 billion in benefits to the “local” automotive sector—okay, foreign car firms.

The estimate could very well have been plucked from the air; CARS actually provided no ceiling on the amount of benefits for foreign car companies.
On the other hand, the economic returns, resulting from such benevolence of the Aquino (Part II) administration, could be open to millions of questions.

Why for example should this administration give “first priority” to foreign car companies in its desire to hand out hundreds of billions of incentives?

To justify its fondness for bequeathing tens of billions of pesos to business, this administration said the incentives aimed to “sustain the resurgence of the manufacturing sector.”

Really, boss, there was the “resurgence?” Since when?

Just by looking around us, we could see the flood of imported items in the grocery stores, department stores, sidewalks, bazaars or tiangge—from toys to clothing to canned goods to home appliances to cars?

Even labels claiming to be “locals” decided it would be wise, in terms of business strategy, to have their goods made abroad—preferably in China.
Think tanks in business and the academe have argued time and again that, instead of giving away “incentives” by the hundreds of billions of pesos to spur investments, the government could try improving our infrastructure, for instance.

Or maybe it should do something about the high power rates! Okay, include the cutting of bureaucratic red tape. After all, incentives would almost always merely go to a favored few!

In the so-called local automotive industry, the government has already given away billions of pesos worth of incentives to foreign car firms in the past 50 years.

Let us remember that the pre-martial rule Congress passed the first investment incentives law in this country in 1967.
And what have we got for it—the “168 Mall?”

Surprise—even after all those years of government pampering, after almost 50 years of getting all sorts of incentives, the same “local” automotive sector would still be back to square one.

I searched high and low for any government study on the amount of incentives that foreign car companies have enjoyed here in the past 50 years. No dice!

We never even evaluated perhaps all the past automotive programs that we created in this country just so foreign car companies could rake in their profits.

Like it or not, the benefits that our government gave to foreign car firms would be unquantifiable by now.

Still, foreign car firms could not have enough of government largesse and benefits, under the guise of “investment” incentives.

What the “local” automotive sector achieved in those past 50 years of continuous incentives was … well, they just enjoyed the booming local automotive market.
In serving CARS on the economic table, the Aquino (Part II) administration had to invent some rosy projections.

The boys of our leaders claimed that the CARS, would generate untold billions of dollars in fresh investments. Really —just like the billions of dollars in spanking new investments promised under the previous car programs that never came?

They also trumpeted that, by some miracle of physics, the same CARS would end up with the manufacture of some 600,000 vehicles locally.

Really—just like the “local contents” of automotive parts under the previous car programs of the government that were also never really followed, since—as we see today—foreign car firms merely import fully made cars from their plants abroad?

The boys of our leader, BS, also boasted that CARS would add some P300 billion worth of economic activities to the GDP, and it would create at least 200,000 jobs.

Wow—we would become rich soon! Those were splendid goals! Good luck to us!

We will have more on this issue in the next column. Abangan.