BOI reviews MVDP to boost vehicle assembly in Philippines

MANILA, Philippines — The Board of Investments (BOI) is undertaking a review of investment requirements under the Motor Vehicle Development Program (MVDP) as part of efforts to encourage more companies to invest in vehicle assembly operations in the country.

BOI executive director Corazon Dichosa said that as part of the review of the MVDP, the agency is looking at investment requirements under the program.

“What we are checking now is, to ensure that you will be able to do the assembly you promised, what would be the reasonable investment requirement for that?” Dichosa said.

Under the MVDP which covers manufacture and assembly of motors vehicles, a participant would have to invest $10 million for assembly of passenger cars or  $8 million for commercial vehicles or $2 million for motorcycles.

As a privilege, the MVDP participant can import completely knocked down units at a tariff of just one percent.

Dichosa said the review is intended to allow the country to get more vehicle models assembled in the country.

“It’s really to enhance the program because if you will look at number of models being done in the Philippines, they are not increasing so we are trying to enhance it in a way we can attract more models to be done in the Philippines,” she said.

According to Dichosa the MVDP would be different from the Comprehensive Automotive Resurgence Strategy (CARS) Program, which is also being implemented by the agency.

Under the CARS, fiscal and non-fiscal support are given to participating firms to encourage investments in vehicle manufacturing.

“The MVDP does not have fiscal support. It will be like MVDP, but there will be liberalization in some of the processes,” she said.

Earlier, Trade Secretary Ramon Lopez said the government wants to encourage more vehicle manufacturing operations in the Philippines.

As the MVDP review is being undertaken, the Department of Trade and Industry (DTI) is evaluating a petition filed by the Philippine Metalworkers Alliance to impose safeguard duty on vehicles from other countries amid increasing imports.

In addition, the DTI is also considering slapping tariff on automobiles from Thailand to induce compliance to a World Trade Organization order which favored the Philippines on a cigarette tax case.