Automotive manufacturers have the option to register with the Motor Vehicle Development Program to obtain fiscal incentives that will not be granted under the newly-drafted rules of the Comprehensive Automotive Resurgence Strategy program.
Newly-appointed Board of Investments governor Henry Co said the MVDP was still open and available for automotive stakeholders excluded from the CARS program.
“It [MVDP] is still there and remains operational, companies can still register. But unlike the CARS program that is like a college degree, while MVDP is more like going through high school compared to CARS,” he said.
He added incentives in CARS were significantly better and of more value compared with the benefits in the MVDP.
Co declined to confirm reports MVDP would be scrapped once the CARS program was fully implemented as hinted by the Trade Department earlier.
Co was part of the planning for the CARS program as a private sector representative from the time it was conceptualized to the drafting of the implementing rules and regulations of the new automotive program.
Co, who once headed Ford Motor Philippines as president, said the government expects car companies to register with the CARS program as soon as the regulations are released.
Ford was the only car company exporting completely built-up units when the MVDP was implemented.
The Philippine government approved EO 877-A, or the MVDP, in June 3, 2010 to give a boost to car companies and parts manufacturers and make make local vehicle assembly an attractive opportunity.
Fiscal incentives under the MVDP are limited to tax rebates and income tax holiday compared with those in the CARS program.
CARS offers P27 billion worth of time-bound and performance based fiscal and non-fiscal incentives to support new investments in fixed capital expenditures in new parts making capability and to encourage large scale production in vehicle assembly.
The CARS program will give three car manufacturers the proper set of incentives to help increase vehicle production in the country.
Each company will be required to produce at least 200,000 units within six years, with incentives kicking in as soon as the company produced its 101,000th unit.
President Benigno Aquino III approved the CARS in May that will provide incentives to the local production of vehicles and attract more than P27 billion in new parts manufacturing investments.
The program aims to locally produce at least 600,000 vehicles and generate a total economic activity estimated to be worth P300 billion over a six-year period.
It calls for fiscal and non-fiscal incentives to jumpstart the revitalization of the country’s automotive industry, improve its competitiveness and elevate the country into an auto manufacturing hub in the region.