More support for autoparts, components industry urged

MANILA, Philippines - Government should focus on providing support to the local automotive parts and components sector to be able to integrate into the Association of Southeast Asian Nations (ASEAN) production network and take advantage of the region’s huge market, an economist said.

University of Asia and the Pacific (UAP) economist Bernardo Villegas told reporters that in order for the country to take advantage of the opportunity in the region with the upcoming economic integration, the government needs to support the local automotive parts and components sector.

“Some components parts will continue receiving incentives, especially if they locate inside the PEZA (Philippine Economic Zone Authority) zones. I think continuing just what they have been doing before, but now really talking to these car companies to look at advantages of integrating their operation in all of the ASEAN (will be needed),” he said. 

Villegas said putting more focus on developing the local parts and components sector over vehicle assembly would not necessarily mean the country would be left out in the region.

“Even if assembly is not here, (production of) car parts is labor-intensive,” he said.  

“Right now, we are sending all sorts of car parts to China and then China puts them up together. That, in the future, can be done by ourselves,” he added.

The ASEAN Economic Community, to be established by the end of next year, aims to create a single market and production base for member states to promote free movement of goods, services, investment and skilled labor across the region.

It seeks to create a highly competitive economic region that would be fully integrated into the global economy. 

Earlier, Trade assistant secretary Rafaelita Aldaba said the government aims to promote the growth of the local automotive industry given its large multiplier effects.

She said the vision is to make the Philippines a competitive manufacturing base of motor vehicles, as well as parts and components, that would serve both the domestic and export markets. 

She also said the government wants to make the Philippines a hub for automotive human resource development, process and outsourcing.

To realize the vision, the government wants to implement a program that would deepen the participation of local firms in global value chains and strengthen the manufacturing base.

The government is looking at three stages to achieve the vision for the local automotive industry with the first stage (2013 to 2014) to involve the formulation and approval of the program for the automotive industry, the second stage (2015 to 2016) to cover making investments and capacity-building to expand the local market, and the final stage (2017 to 2022) to have the Philippines fully integrated into the ASEAN production and sales network and a hub for certain types of models.