AUTO INDUSTRY NEWS

Solon seeks to establish Comprehensive Motor Vehicle Development Program with House Bill 5279

Solon seeks to establish Comprehensive Motor Vehicle Development Program with House Bill 5279 image

Text: / Photos: Tito Hermoso | posted September 29, 2011 16:43

Rep Lorenzo Tanada aims to assist local automotive industry for future growth

The Deputy Speaker of the House, Rep. Lorenzo Tañada III (4th District, Quezon) filed House Bill 5279, which aims to assist the local automotive industry for future growth.

Called the "Comprehensive Motor Vehicle Development Act", the bill proposes a revision to the Philippine Auto Industry Development Program, taking into account the ASEAN region and, increase production capacity and make the country a hub for the manufacture of automotive parts.

"The automotive industry is strategic as this has been proven by the experiences of Japan, South Korea, China and Malaysia to name a few," Tañada said. "A progressive local car manufacturing program in the 1970s was reduced to a mere import liberalization program in the 1990s when tariffs for completely-built-up units (CBUs) were drastically reduced to a single digit while Thailand, Malaysia and Indonesia have managed to keep their motor vehicle tariffs at double digits and installed other non-tariff barriers to protect their local auto industry."

In the bill, it is proposed that the government shall anchor the auto industry's future development on a pro-Filipino, balanced and coherent framework that emphasizes capacity building in the domestic front, address smuggling concerns to help the motor vehicle industry achieve economies of scale.

The bill further states that the government will formulate measures to lower the cost of doing business in the automotive sector such as the reduction or removal, as the case may be, of regulatory costs as well as improve the processes, promote the development of new technologies and its infrastructure research and development, as well as possibly identify a niche model to be developed and be manufactured in the Philippines both for local and international sale and distribution.

The Motor Vehicle Development Program (MVDP) covers the manufacture and assembly of Classifications I, II, III and IV motor vehicles. The production and/or assembly of motor vehicles and other vehicle assemblies covered under the MVDP shall be in Knocked-Down (KD) condition only.

Also, companies engaged in the manufacture of motor vehicles duly registered with the Board of Investments (BOI) as participant under the MVDP shall be entitled to incentives.

SOURCE: House of Representatives, Republic of the Philippines