Perks for car exporters delayed till April

MANILA, Philippines - The incentive program that was supposed to be enjoyed by local car manufacturers will be delayed until April after the government failed to release the executive order (EO) implementing the Auto Export Program (AEP).

“The draft is still with me. There are still details that we need to sort out,” Trade Secretary Gregory L. Domingo said in a chance interview yesterday. The EO was supposed to be signed by President Aquino before the Congress starts its session. The session resumed yesterday.

When asked what were the provisions that caused the delay, Domingo said that they needed to discuss the matter further to ensure that the EO will really help auto manufacturers export their product. Auto firms have already said that it will be difficult for them to export and they need more government support.

In a separate interview, BOI managing head Cristino L. Panlilio said that the government will cut in half the export requirement in the AEP in an attempt to encourage more local manufacturers to sell completely build up (CBU) units overseas.

“We are looking at cutting in half the quota in the export plan,” Panlilio told reporters. Firms must be able to export 10,000 units in order to avail of the incentives.

Currently, only one auto manufacturer is exporting CBUs. Ford Group Philippines is the lone exporter. However, for this year, Ford will be unable to meet the state-imposed 10,000 quota.

“It is harder to export because of the conditions and the agreements (free trade agreements) that the government is entering,” Panlilio said. “We are still studying the possible solution to this problem.” He said that even with incentives it has been difficult to export vehicles.

“What is the point of coming out with the export program if no one will avail. We have to think out of the box now,” Panlilio added.

DTI called on the automotive sector to present a “credible strategy” that will reverse the declining domestic production of vehicles before asking for government support like higher tariff on imported vehicles.