DTI to limit incentives to a few auto firms

MANILA, Philippines - The government may limit slots for automotive firms that could enjoy incentives under the automotive industry road map, the Department of Trade and Industry (DTI) said.

Trade Secretary Gregory Domingo told reporters on the sidelines of the Asean Business Awards Philippines 2014 held Tuesday night, the government intends to set a limit on the number of firms that could qualify for incentives offered under the planned automotive program.

“You have to be registered as a participant. There is limited number of slots,” he said.

He declined to say how many slots would be set as the government is still finalizing the details of the automotive industry road map.

The government is currently crafting details of the mechanism for the grant of incentives to firms that qualify for the program.

Domingo said that under the proposed automotive industry roadmap, the government wants to provide incentives to firms which are able to meet certain production levels, as well as assemble vehicles for exports in support of the government’s ambition to make the country a manufacturing hub.

Based on the proposal, he said the government intends to provide incentives to firms which are able to produce a total of 200,000 units of a particular vehicle model over a period of five years.

Firms which meet the production level requirement would be given a corresponding amount for every unit assembled as an incentive.

The incentive is intended to help automotive firms close the gap between a locally-assembled vehicle and imported unit amounting to $2,000.

Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) president Rommel Gutierrez told reporters earlier the group wants the executive order for the automotive industry roadmap to be released within the year.

“We hope PNoy (President Aquino) will prioritize it this year,” he said.

Given the expected higher demand for cars in the country and upcoming Association of Southeast Asian Nations (Asean) economic integration, the CAMPI has said the local automotive industry would need government support.

Asked when the automotive industry roadmap would be issued, Domingo said it would be difficult to give a target date.

The country has lagged behind its peers in the Southeast Asian region in terms of vehicle assembly with its production output reaching 79,169 units in 2013 based on data from the Asean Automotive Federation (AAF).

For the same period, AAF data showed Thailand assembled a total of 2.457 million units, while Indonesia produced 1.208 million units, Malaysia manufactured 601,407 units and Vietnam made 93,630 units.