The Department of Trade and Industry (DTI) is looking to revise its motor vehicle development program (MVDP) in a bid to encourage automotive companies to assemble more models locally.
The MVDP, which aims to develop the local automotive manufacturing industry, has been in place for more than two decades.
It allows domestic players to import completely knocked down vehicles at a reduced tariff rate, so that the units could then be assembled here in the Philippines.
Corazon Dichosa, executive director of the Board of Investments’ (BOI) industry development services, told reporters last week the program was under review as fewer automotive models were being made here in the Philippines.
“It’s really to enhance the program. If you will look at the number of models being done in the Philippines, they are not increasing. We are trying to enhance it in a way we can attract more models to be done in the Philippines,” she said.
At the same time, the government is exploring ways to make it more difficult to bring in imported vehicles.
One measure being considered is a safeguard duty on imported vehicles, after labor group Philippine Metalworkers Alliance claimed that local jobs were harmed because of too many imports in the past few years.
The DTI is likewise considering slapping tariffs on auto exports from Thailand, a center of automotive manufacturing in the region, to the Philippines as an act of retaliation.
This is related to a longstanding trade dispute wherein Thailand has been accused of unfairly treating imports from cigarette maker Philip Morris Philippines Manufacturing Inc.
At the same time, the DTI is looking to give perks to automotive manufacturers for certain stages of local production.
One of the measures that the BOI is studying is to apply the program to certain stages of assembly, so that companies can take the time for “market development and testing.”