PH remains heavily reliant on imported vehicles

Evariste M. Cagatan, Director of the Board of Investment’s manufacturing industries service | PHOTOS: BOI, STOCK

Seven in every 10 automotive vehicles sold in the Philippines today are still imported, highlighting the need to improve the capacity of local manufacturers to bring down the prices of automobiles in the country, according to a trade official.

Evariste Cagatan, the director of the Board of Investment’s (BOI) manufacturing industries service, on Tuesday said that vehicle imports accounted for 71 percent of the total sales for the period covering 2015 to 2023.

“Imagine the foreign exchange savings that we could have had, if only we are able to produce more of what the people buy locally,” Cagatan said during her speech at the Automotive Reverse Trade Fair held at the Philippine International Convention Center (PICC) Complex in Pasay.

READ: PH vehicle production hit peak 2024 growth in August

She said that the Philippine market is big enough to support the local automotive industry, given that 63 percent of its 116 million population belongs to the working sector.

“Unfortunately, our market is served by a big portion of imports coming from our neighboring countries, both CBU (completely built units) and CKD (completely knocked down units),” she added.

Cagatan also said that the local supply chain remains limited and that regulatory challenges persist, which make it easier to import CBUs rather than building the vehicles locally.

To address the issue, Cagatan said that the BOI aims to strengthen the network between local parts manufacturers and the automotive assemblers and manufacturers.

The latest data from the Asean Automotive Federation (AAF) show that the Philippines’ produced 10,554 units of vehicles last September, marking a 27.1 percent growth from the 8,303 vehicle units manufactured during the same month in 2023.

From January to September, local vehicle makers produced 97,139 units, indicating a growth rate of 18.3 percent from the 82,092 units tallied in the same period a year ago.

In terms of production growth during the nine months, the Philippines was second among its peers in the Association of Southeast Asian Nations (Asean), second only to the 136 percent of Myanmar — a country which had a relatively small output volume of 812 units.

Thailand, the biggest producer, had an output 1,128,026, but suffered an 18.6 percent decline.

Indonesia’s output dropped by 17.1 percent to 881,574 while Malaysia saw its own grow by 4.7 percent to 593,050.

Meanwhile, Vietnam recorded a contraction of 6.2 percent as output settled at 116,077 units.