Gov’t to extend incentive package for CBU exports

The Philippines is ready to extend an incentive package for the export of completely built-up (CBU) units, Trade and Industry Secretary Manuel Roxas II said yesterday.

However, Board of Investments (BOI) managing director Gregory Domingo said the government is still determining in what form the export incentive would be.

"So far, there is agreement that an export credit of $400 per CBU would be extended with a required minimum export volume," Domingo said.

The government still has to determine if the export credit would be in the form of a tax credit or a tariff offsetting.

Domingo admitted that it would require legislation if the export credit is in the form of a tax credit.

On the other hand, if the export credit would be used to offset tariff imposition on the automotive firm’s other imports, it would need a mere executive order.

The automotive export credit would be used to pay or offset the tariff duty due on other CBU imports of the firm.

Expected to initially benefit from the CBU export credit is American car maker Ford Motor Co. which currently is the only exporter of CBUs, specifically the Ford Escape model to Thailand.

Domingo said that the BOI has decided for now to separate the issue of similar export incentives for automotive parts.