If figures don’t lie, then the Philippine government’s tax reform program has indeed backfired on automakers and importers.
Philippines’ auto sales and production haveslowed down since the tax reform law (TRAIN) took effect in January this year, according to data from the Asean Automotive Federation.
Car output declined by 39.9 percent while flat sales were recorded.
The downtrend in the Philippines showed a marked contrast from that among other Asean car -producing members.
Vehicles sold within the ASEAN increased by 4.3 percent to 529,176 units during the first two months of 2018 from 507,504 units in the same months in 2017.
Year-to-date sales in February 2018 was more than twice the rate of production in the whole of ASEAN wherein all six manufacturing countries shared in the combined 714,058 units produce in January and February 2018.
ASEAN vehicle production during two months was 9.6 percent higher compared to 2017’s 651,285 units in the same months.
Among ASEAN members, Brunei, Malaysia and Singapore reported slower sales. Singapore posted the biggest drop in sales of 27.5 percent.
The Philippines growth was tempered by the effect of the tax reform program that increased the excise tax imposed on certain vehicle models.
It was the only country among six manufacturing countries that posted slower production.
Meanwhile, data also showed that sales of motorcycles and scooters also dropped by 12.9 percent to 1.29 million from 1.48 million while production was also behind by 27.4 percent.
Based on the Federation’s data, production was down to 434,448 units in January to February 2018 from 598,627 units in the same months in 2017, since the Philippines has not yet submitted its motorcycle and scooter sales and production data to the group.
The ASEAN Automotive Federation aims to promote automotive market integration and growth, cooperation and investments in the ASEAN region.