Earlier, the President asked the Department of Finance (DOF) and the Board of Investments (BOI) to come up with a fiscal incentive policy aimed at attracting more investments for the local manufacturing sector, particularly small and medium enterprises (SMEs).
She said this is in line with the administration’s earlier declaration to refocus its economic policy to support and sustain the recovery of the manufacturing sector, particularly the small and medium scale firms through credit support facility.
"We must try to expand our domestic market. To expand our own market, we will follow a model which economists call a domestic-based, managed asset reflation," Mrs. Arroyo said during the launching of the Ford Motor Export Program held yesterday at the Ford Motor Philippines plant in Sta. Rosa Laguna.
"This economic model is focused on domestic consumption and complements multinational export as a source of growth. Managed-asset reflation amounts to prudent monetary policy, a gradual reduction in public sector debt, and a balanced budget in four years," the President explained.
"We want to develop new sources of domestic demand, notably capital efficient SMEs. By helping SME entrepreneurs, they may be able to afford to buy either a third car or an additional car. We want to ensure that Ford and other manufacturers have a good domestic market to sell their products to ," she added.
Ford Motor Philippines announced yesterday that it is exporting its locally-assembled Ford Escape and Lynx models to Thailand and Indonesia.
"I intend to use fiscal policy to encourage Ford and the rest of the manufacturing sector to bring in this extra new $100-million additional investments in the next two to three years," President Arroyo said, adding that the "BOI is working together with the finance department to have pay-when-made incentive for the automobile industry."
The President, accompanied by US Ambassador to the Philippines, Francis J. Ricciardone and Ford Asia executive director John Parker, also inspected the newly expanded Ford manufacturing plant in Sta. Rosa, Laguna which she described as "one of the fruits" of her visit to the US last year.
The President, however, noted with concern that Ford’s mother company in the US has invested $300 million in China and another $300 million in India.
"So we have $200 million. And I was telling Mr. Parker that I am looking forward to your next $100 million for the Philippines," she said.
Pending the implementation of the government’s new fiscal incentive policy, the President said she directed the DTI to work with Ford to look for a deserving SME supplier which will be granted a P1-million credit loan facility.
The President gave her assurance that the government’s project of "one-town, one project-P1-million loan" facility will also be made available to other small and medium manufacturing and export industries.