Trade Secretary Ramon Lopez said Wednesday the government will be amiss if it will disregard the need for safeguard measures on imported vehicles after investigations showed pure imports were causing severe injury to the local automotive manufacturing industry.
Lopez, responding to comments from industry players, said the safeguard duties were meant to help and boost local manufacturing revival efforts and protect local jobs in the manufacturing of cars and light commercial vehicles.”
Lopez was referring to a statement by the Chamber of Automotive Manufacturers of the Philippines Inc., which claimed the recent imposition of provisional safeguard tariffs on imported vehicles would cause “reduction in employment.”
“The position of CAMPI just shows they import more than [what they] manufacture locally. Again, imported vehicles are not banned. Consumers have the option, and the dealers can now sell more of the locally-made vehicles such as Toyota Vios and Innova and Mitsubishi Mirage and L300, the prices of which are not changing and therefore will be more attractive,” he said.
He said dealers would continue to have their businesses as the situation was about “maintaining a balance and safeguard measures are in keeping with the law.”
“If we don’t impose this safeguard, after finding Injury to local industry, then we are risking the remaining jobs of the Filipino workers,” he said.
He reminded automotive players that the safeguard measures were the government’s response to the petition of the Philippine Metalworkers Alliance, a workers’ group in the car industry.
Lopez said the group expressed concern over the declining opportunities to workers in car assembly facilities amid surging imports.
Data showed from close to 100,000 workers in the past years, employment in the sector declined to about 86,000 jobs in local vehicle manufacturing and production of auto parts, metal works, plastics, wiring harness and others. These jobs were affected adversely by the increasing vehicle imports, he said.
Imported completely built units jumped from 88,013 units in 2010 to 274,847 units in 2019.
Several groups including the Philippine (Auto) Parts Maker Association and Sentro—an alliance of various workers groups, supported the DTI’s decision on safeguard issues.
The PMMA said that back in 1997, only 20 percent of vehicle sales were CBUs while the rest were all locally-assembled completely knocked-down or CKD vehicles.
CBU sales accounted for about 88 percent of the market in 2019, while CKD sales went down to 12 percent.
The PMMA said that membership subsequently declined from 128 firms in 2015 to 49 by end of 2020.
“However, some of these remaining companies have not been operating due to ‘no production’ requirements by our clients,” the group said.
“We need to sustain our local manufacturing and re-create jobs for our workers, whether in the vehicle assembly plant or in part-maker’s side,” the PMMA said.
Sentro said that the number of workers directly and indirectly employed by the industry was about 340,000 formal and informal workers.
“In 2019 alone, more than 1,000 automotive workers have been laid off by car manufacturers and their supply chains. Considering that due to the COVID-19 pandemic, the Philippine economy is the worst hit in Asia if not the world, the protection of Filipino jobs is vital,” it said.