Philippine vehicle parts manufacturers continue to feel the impact of Ford’s 2012 decision to halt assembly in the country, the Philippine Parts Makers Association (PPMA) said Tuesday.
“The exit marked a significant setback for the Philippine automotive industry, dealing a blow to local suppliers, workers and the broader economy,” the PPMA said in a statement.
PPMA president Ferdi Raquelsantos said more than a decade later, the group still laments the lost opportunity and warned that without government intervention, the country risks further decline in the global auto manufacturing sector.
Ford’s closure of its Sta. Rosa, Laguna assembly plant resulted in job losses and severely affected local auto parts suppliers, including those providing batteries, wiring harnesses, metal parts and plastic trims.
“The closure was a huge setback. Ford was one of the few carmakers assembling vehicles here, and when they left, it weakened the entire supply chain,” Raquelsantos said. “It discouraged other manufacturers from considering the Philippines as a viable production hub.”
Ford cited a lack of economies of scale and high logistics costs for the shutdown, shifting focus to Thailand, where government incentives and infrastructure made manufacturing more competitive.
Industry experts said stronger government support and incentives could have prevented Ford’s departure, noting that neighboring countries like Thailand and Indonesia actively courted automakers with tax breaks and infrastructure development.
“We were simply not competitive. Our auto policies at the time were not designed to keep manufacturers here. We didn’t have the kind of tax incentives and industry support that Thailand was offering,” said Raquelsantos.
The PPMA is advocating for stronger policies to revive local automotive manufacturing, including enhanced incentives under the Comprehensive Automotive Resurgence Strategy (CARS) program and tariff protection against imported vehicles.
“We need to rethink our approach. We should focus on policies that make it attractive for car manufacturers to set up production here,” Raquelsantos said.
“The government must provide long-term stability, infrastructure investment, and incentives that will encourage local assembly instead of relying on imports,” he said.
The PPMA believes the Philippines can regain its position as an automotive manufacturing hub, particularly in the electric vehicle (EV) sector, with the right policies and investments.
“We lost Ford, but we don’t have to lose the future. If we act now, we can position the Philippines as a key player in the EV industry and prevent another exodus of manufacturers,” Raquelsantos said.