The Board of Investments plans to require new applicants to the Motor Vehicle Development Program to put up investments that will support a more liberalized approach to vehicle assembly.
BOI said the Industry Development Group was coming up with a second draft of MVDP in an effort to reach out to assemblers and parts manufacturers to sustain vehicle production in the Philippines.
It said while the group was not seeking additional financial requirements other than $10 million for passenger car assembly and $8 million for commercial vehicles, it would still review the amount needed to operate “by-stages completely-knocked down” assembly of vehicles.
“We’re trying to enhance the program, so we can attract more models for assembly here. If you look at the models being done in the Philippines, they’re not increasing,” said BOI Industry Development Group head Corazon Dichosa.
The group is currently gathering comments from the automotive and motor vehicle players for the second draft.
The agency said that for existing MVDP members, it would not subject these companies to register again. Instead, they will be asked to submit a letter of intent to maintain their accreditation.
New applicants and existing members will be required to put up CKD operations by stages without any fiscal support from the government.
The only assistance the government can give the players is the existing tariff support, subjecting all imported parts and components to a tariff reduction of 1 percent.
Figures gathered by the BOI showed there were five passenger cars assemblers, 22 commercial vehicle assemblers and 24 motorcycle assemblers in the country as of May 2017.
The local automotive industry is composed of members of the Chamber of Automotive Manufacturers of the Philippines Inc. and Trucks Manufacturers Association.
The motorcycle industry is dominated by Japanese manufacturers Honda Phils. Inc., Kawasaki Motor Phils. Corp., Suzuki Phils. Inc. and Yamaha Motor Phils. Inc. Other motorcycle assemblers are carrying Chinese brands such as Sinski, Lifan, Skygo, Shineray, Loncin, Zongshen and others,
Others participating motorcycle brands are Taiwan’s SYM and Kymco, Thailand’s Tiger, Malaysia’s Demak and India’s Granstar.
For parts and components, there were 256 companies that form the Philippine automotive supply base producing over 330 parts and components made of metals, plastic, rubber and composite materials for both the original equipment manufacturer and replacement market.