Under Memorandum Order (MO) No. 73 dated Sept. 12, a copy of which was obtained by The STAR yesterday, the President ordered the amendment of the guidelines under the Car Development Program (CDP); the Commercial Vehicle Development Program (CVDP); and the Motorcycle Development Program (MDP).
"The Philippines, as a member of the World Trade Organization, has committed to eliminate all laws, provisions, rules, regulations, and guidelines that may run counter to the Trade-Related Investment Measures (TRIMS) and other trade agreements under the auspices of the WTO to which the country is one of the signatories," the MO said.
Government sources said the changes in the MVDP will lead to the production of cheaper passenger cars as well as commercial vehicles.
The President issued the MO following a study for a possible revision of the government’s tariff policies to help local car assemblers and parts makers against the negative impact of globalization ushered in by the country’s statutory obligations with various international trade agreements.
The revision on the MVDP is also in time for the phasing out of the three and a half years extension of the country’s local content requirement by July 2003.
It well be recalled that the Council for Trade in Goods of the WTO allowed the Philippines to extend for three and a half years the implementation of local content and requirement as part of a compromise with the US.
Under the new MO, the President ordered the participants of the Motor Vehicle Development Program to follow the new prescribed period within which they should comply with the local content requirement.
Also in the same MO, the President provided that the MVDP participants "will still be required to earn foreign exchange credits through the export of automotive products to be able to import CKDs."