The zero tariff concessions granted by the Philippines to the United States will not affect locally produced vehicles by domestic automotive assemblers, according to Ceferino Rodolfo, Undersecretary of the Department of Trade and Industry and Managing Head of the Board of Investments.
Rodolfo told Malaya Business Insight that the US no longer manufactures small vehicles, some of which are currently produced in the Philippines.
“We are talking about high-value, big-engine vehicles of 3 liters and above. The Philippines does not produce these,” Rodolfo said.
He added that US carmakers have shifted production of most small-engine vehicles to Asean, which already enjoys zero tariffs under the Asean Free Trade Agreement.
Currently, vehicles imported from the US carry a 30 percent duty.
The two local assemblers—Toyota Motor Philippines Corporation and Mitsubishi Motors Philippines Corporation—manufacture models with engines of less than 3 liters. Toyota assembles the Vios passenger car, the Innova, and the Tamaraw multipurpose vehicle; Mitsubishi produces the Mirage sedan and the L300 cab and chassis.
Rodolfo noted the only US-branded competitor, if any, is the Ford Territory, a mini sport utility vehicle. However, this model is manufactured in China and enters the Philippines duty-free under the Asean–China Free Trade Agreement.
“It’s not competitive for the US to produce smaller vehicles because it’s more expensive to manufacture and involves higher logistics costs,” Rodolfo said.
The actual competitors to US brands in the high-value, large-engine category are Japanese models still being built in their home country, he added.
