Partsmakers and automotive workers call for the full implementation of the Comprehensive Automotive Resurgence Strategy (CARS) to sustain local assembly and save jobs following the rejection of the imposition of additional duties on vehicles imported as completely built-up (CBU).
Ferdi Raquelsantos, president of the Philippine Parts Makers Association (PPMA) said if the government failed to help the local assembly and the parts industries through tariff protection, CARS would provide a relief for the industry.
Raquelsantos said PPMA is batting for the extension of CARS beyond 2024 to meet the 200,000 units set by the program, ensuring the sustained assembly of at least two models, the Toyota Vios and the Mitsubishi Lancer for a few more years.
The Board of Investments has earlier indicated a three-year extension.
But Raquelsantos said key to meeting the hurdle is the economic recovery that would restore consumer confidence and buoy demand for vehicles.
He also noted the BOI should make the third slot open of CARS to new participants or pursue an earlier plan to reallocate the P9-billion incentive package of the program to the Eco-PUV (public utility vehicle) Program.
Raquelsantos said either way, local assembly will continue
“We were happy for the last seven months because of sustained CKD (completely knocked-down) production because sales were increasing despite the pandemic,” Raquelsantos said.
The additional duties of P70,000 per unit for CBU passenger cars and P110,000 of imported CBU light commercial vehicles (LCVs) took effect in February.
According to Raquelsantos, a higher local content on models under CARS would also be a big boost to local parts sourcing.
“The DTI (Department of Trade and Industry) is doing (everything to) support MSMEs (micro, small and medium enterprises) and manufacturing. In the CARS program, a 60-percent local content is favorable,” he said.
CARS models currently have 41 percent local content.
Saying there was no surge in CBU imports, the Tariff Commission (TC) in a July 22, 2021 report has recommended that no definitive safeguards should be imposed on CBU passenger cars and CBU LCVs. The TC also terminated its investigation on the imposition of the tariffs by DTI Secretary Ramon Lopez.
According to Luis Catibayan, director of the Bureau of Import Services, the TC decision stands although the petitioners, the Philippine Metalworkers Association (PMA), may go to the Court of Tax Appeals as a recourse.
Lopez will have to issue a decision based on the TC’s findings/ recommendations within 15 days from receipt of the report.
Catibayan said tthe Bureau of Customs has to return the cash bonds posted by importers and will issue an order to stop the collection of the provisional safeguard duty upon receipt of instructions from the Department of Finance.
The importers will then refund customers for the bonds paid for their purchases of models covered. – Irma Isip
