Top automotive executives are urging the Philippine government to review the Japan-Philippines Economic Partnership Agreement (JPEPA), particularly its outdated tariff provisions, following Manila’s tariff-free deal on vehicle imports from the United States.
“We need to update the JPEPA,” Alfred Ty, chairman of Toyota Motor Philippines Corp. (TMP), said in an interview during the Toyota Motor Philippines Foundation’s anniversary celebration in Taguig City over the weekend.
Ty said the goal is not only to level the playing field between Japanese and American car brands, but also to address competitive imbalances with Korean, Chinese, and other Asean carmakers, all of which benefit from various free trade agreements (FTAs) with the Philippines.
He emphasized that any review of JPEPA should go beyond tariffs and also consider advances in automotive technology — particularly the rise of hybrid and electric vehicles.
Undersecretary Ceferino Rodolfo of the Department of Trade and Industry (DTI) said in a text message that JPEPA currently applies a 20 percent tariff on vehicles with engine displacements of 3.0 liters or below, while larger vehicles are exempt.
In contrast, US-made vehicles — previously subject to a 30 percent tariff — will now enjoy zero duties following a trade deal finalized last week between Washington and Manila.
South Korean vehicles have also benefited from zero tariffs under the PH-Korea FTA, which took effect on December 31, 2024.
“Toyota cars already enjoy zero tariffs within Asean. Korean cars also benefit. So why not extend that to US cars as well? We really need to revisit JPEPA,” Ty said.
He acknowledged the review process would require negotiation, but emphasized the auto industry must be part of the discussion.
“JPEPA capped the zero tariff benefit on cars with over 3-liter engines. But that’s outdated. With today’s hybrids, you don’t need that kind of engine size. The agreement doesn’t reflect current technology,” he said.
Ty stressed that future trade rules should consider technological relevance, not just engine displacement. “Consumers will dictate the market. That’s the impact of this new US tariff deal,” he said.
Rommel Gutierrez, president of the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI), echoed Ty’s position, calling for a review that removes the current engine-size distinctions — as was done under the PH-Korea FTA, where all completely built-up units (CBUs) are duty-free.
While JPEPA has been in effect since 2008, no new concessions have been secured. The deal originally called for a review in 2011, but negotiations have since stalled.
