Separate perks sought for car, parts makers

MANILA, Philippines - The Board of Investments (BOI) has agreed to create a separate listing for motor vehicle manufacturing and auto parts and components manufacturing in the 2011 Investment Priorities Plan (IPP).

“BOI wants to promote parts manufacturing because they do not receive incentives unless they export,” BOI Executive Director Efren V. Leano told reporters.

“We want to improve local content and lower prices and become competitive in the export market, that is the thrust of the program,” he added. “They cannot be competitive that is why we need to support them.”

The motor vehicle and parts component will be the 11th category in the IPP priority list. Tourism was removed from the priority list after the Tourism Department requested that it be moved to the mandatory list.

In the draft 2011 IPP presented during the public hearing last month, investments in motor vehicles and parts were under the strategic investment.

Earlier, Toyota Motors Philippines (TMP) vice president Rommel T. Gutierrez said that they have asked the BOI for clarification on the amount of investments necessary to receive income tax holiday (ITH).

Gutierrez said that under the IPP, the auto was included in the strategic investments. Normally, strategic investments are large scale investments. “We just wanted clarification on the matter,” Gutierrez said.

In a separate interview, BOI managing head Cristino L. Panlilio said that auto firms need not infuse large amounts in order to gain ITH under the IPP.

Panlilio said that they will still follow the Motor Vehicle Development Plan (MVDP) which says that auto investments worth $8 million will receive ITH. “Strategic investments can be small or medium scale,” Panlilio noted.

Panlilio said that they will maintain incentives for the auto sector because it contributes to the gross domestic product (GDP). “We want the auto sector to react fast to the economic changes that is why we want to provide them incentives.”