Local auto parts makers urge government to adopt investor-friendly policies

Local parts makers comprising the Motor Vehicle Parts Manufacturers Association of the Philippines (MVPMAP) yesterday urged the government to immediately adopt policies to encourage foreign investors that may be looking for an alternative site from Thailand which is currently experiencing political uncertainty.

MVPMAP director Ferdie Raquelsantos said that if conditions do not normalize very soon in Thailand, the Philippine auto industry may benefit from foreign investors deciding to relocate their regional manufacturing hubs elsewhere.

"It is thus imperative for the government to immediately respond to this opportunity by creating an incentive program for foreign and local investors, and in the process, uplift the local parts manufacturers who will benefit from the fresh capitalization and the transfer of technology," the MVPMAP said.

Some MVPMAP member companies relate that in their regional headquarters in Thailand, during the first few days of the coup, no locals showed up for work with only the expats working.

The MVPMAP member companies add that although most Thais believe that after a few days it would be "business as usual," there are still some glitches when doing transactions with Thai government offices.

In Thailand , the automotive industry is the number one manufacturing industry, followed closely by hard disk drives.

Thailand is now the biggest auto market in the ASEAN region.

For local parts makers, the MVPMAP said, "this should pose as a challenge for us to show that we can produce export quality products and fill in the vacuum. It would also help if the government relaunches a Buy Pinoy Movement."

MVPMAP chairman Feliciano Torres said that government policies must be benchmarked on what Asean neighbors, particularly Thailand, Malaysia and Indonesia, are doing.

"Let us not waste this opportunity, now is the right time for the government to formulate policies favorable to local auto parts suppliers and help our auto industry and all its upstream and downstream industries to catch up with our Asean neighbors," Torres said.

The MVPMAP notes that in 1979, the Philippines was ahead of Thailand until the Thai government decided to impose a five-year moratorium on labor strikes and other forms of labor unrests.

This attracted a lot of foreign investors to locate their regional manufacturing bases in Thailand.

Bong Cruz , executive of MD Juan Enterprises and a member of MVPMAP’s Technical Working Group, noted that prior to and after the Asian financial crisis in 1997, the Philippines and Thailand were on almost even ground, with one Thai baht equivalent to about one Philippine peso.

However, Thailand’s economic recovery program outpaced that of the Philippines with the Thai baht now equivalent to P1.34 to the dollar.