Toyota and Mitsubishi accepted to the CARS Program

The Philippine Board of Investments (BOI) announced the approval of Mitsubishi Motors Philippines Corporation and Toyota Motors Philippines Corporation as participating car makers of the country’s Comprehensive Automotive Resurgence Strategy (CARS) Program.

Trade Assistant Secretary Rafaelita Aldaba said that the CARS Program aims to raise local vehicle manufacturing to expand the country’s auto parts making capabilities.  CARS is expected to attract PHP 27 Billion in fresh investments, manufacture 600,000 more vehicles, and add PHP 300 Billion to the domestic economy (equivalent to 1.7 percent of gross domestic product).

Mitsubishi applied to produce 200,000 units of the Mirage/Mirage G4 while Toyota applied for the production of 230,000 units of an all new (full model change) Vios. As participating carmakers, they are required to localize the production of body shell and large plastic parts and components.

Toyota and Mitsubishi’s initial investments totaling P8 billion will create some 14,000 new jobs, salaries and wages of which will also amount to Php8 billion over a six year period.  Parts makers who will be working with Toyota and Mitsubishi are expected to  generate over Php18 billion fresh investments for the country.

The CARS Program also expects total government revenues to amount  PHP408 billion in import duties, VAT, excise tax, income tax, withholding taxes. Direct purchases of raw materials for parts making will amount to Php63 billion.

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GVC analysis on 5 key sectors conducted

Global value chain (GVC) studies on the aerospace, automotive and auto parts, chemicals, electronics and electrical machinery, and paper industries will be presented to various stakeholders through a public forum on  June 2, 2016 at the Makati Diamond Residences.

Conducted by the Duke University Center on Globalization, Governance, & Competitiveness (Duke CGGC), the five studies were commissioned under the Science, Technology, Research, and Innovation for Development (STRIDE) Program and the Advancing Philippine Competitiveness (COMPETE) Project of the United States Agency for International Development (USAID) for the Philippine Board of Invetments (BOI), the industry development and investments promotion arm of the Department of Trade & Industry (DTI). The GVC studies are intended to assist the BOI in its efforts to further develop its framework and strategies in promoting industries built on best practices.

“The findings of the studies carried out by the Duke CGGC are important in formulating policies and programs on how firms, SMEs in particular, can participate in GVCs and, for those that are already participating, how to upgrade and move up the value chain. The research studies provide evidence  which serve as basis to improve our industry development strategies towards a more globally competitive Philippine manufacturing industry,” said DTI Assistant Secretary for Industry Development Rafaelita Aldaba.

The Philippine new industrial policy as contained in the Comprehensive National Industrial Strategy (CNIS), the country’s blueprint for linking the manufacturing, agriculture, and services sectors, aims to improve the country’s competitiveness by upgrading the productivity of its industries and removing the binding constraints to their development.

Under this policy, the government acts as enabler of the private sector, which is the proximate engine of growth, and serves as facilitator of initiatives that will create the proper environment for private sector development. The new industrial policy is cluster-based and GVC-focused and intends to build strong regional economies in the country and focus government efforts in integrating local industries into regional production networks and enabling SMEs to move up their GVCs.

The GVC studies particularly focus on how the mentioned industries can reinforce forward and backward linkages. The analyses cover the structure of each industry’s value chain—from inputs, technologies, processes through distribution and marketing—at the global level, and indicates where the Philippines currently fits within these GVCs. It explores the global competitive environment for these value chains, and how the Philippines compares relative to its competitors.

The GVC studies also analyze the most binding contraints preventing Philippine firms from moving up the industry GVCs, and recommend strategies for value chain upgrading and improving competitiveness, as well as the needed investments, human resource requirements, and the roles of government and industry stakeholders in implementing these.

PHL hosts 24th APEC AD

The Philippines, through the Board of Investments (BOI), is hosting the 24th Asia-Pacific Economic Cooperation Automotive Dialogue (APEC AD) starting today, May 25 until May 27, 2016 at the Makati Diamond Residences where discussions are expected to center on the current status of the Automotive Industry in the Asia Pacific Region and the ongoing initiatives of the working group.

The APEC AD serves as a forum for APEC member economy officials and senior industry representatives to work together to map-out strategies for increasing the integration and development of the automotive sector within the region. It is one of the Industry Dialogues under the APEC Committee on Trade and Investments along with the Chemicals Dialogue and Life Sciences Innovation Forum.

At the 22nd and 23rd APEC AD also chaired by the Philippines through BOI, the vital role of SMEs in the automotive manufacturing industry and their integration into the regional and global markets where two workshops on the experiences and best practices of some SMEs in their participation in the GVCs were highlighted. The meeting also hosted various initiatives focusing on SMEs and their needs to better participate in GVCs including the study on the GVC-SME Automotive Sector (GSAS) conducted by Malaysia and Philippines with the aim of gathering information on automotive industry SMEs in the Asia-Pacific region, particularly the barriers they encounter in their endeavor to penetrate the international trading system.

“As a follow through, the APEC AD hopes to identify and develop a capacity building action plan for SMEs based on the findings of the study,” said BOI Executive Director for Industry Development Services Ma. Corazon Dichosa, also the APEC AD chair. “A compendia on motor-vehicle related taxes as well as automotive business regimes were also initiated to provide member economies with up-to-date vital information on the automotive sectors in the region. These aims to provide the auto industry, particularly SMEs with information to aid them in penetrating the GVC, e.g. market size of the economies, business regulations,” she said.

At the 24th APEC AD, the working group will discuss updates on APEC Developments, as well as the AD’s workplan until 2017.

BOI now accepts applications for CARS Program

The BOI now accepts applications for the Comprehensive Automotive Resurgence Strategy (CARS) Program.

Car and car parts manufacturers eligible for the program have sixty (60) days upon publication of the CARS memorandum circular to submit their applications. The memorandum circular announcing the opening of applications is scheduled to be published on Friday, January 15, 2016.

An inter-agency committee, composed of representatives from the Departments of Finance, Transportation and Communication, Science & Technology; Technical Education and Skills Development Authority; the Industry Development Council; and the National Competitiveness Council, will evaluate the applications within the prescribed one-month period. Board decisions are expected to be announced before June 2016.
The CARS Program (Executive Order No. 182), signed into law by President Benigno S. Aquino in May last year, provides fiscal support for investments in the manufacture of whole body large plastic parts, other strategic parts that are not currently produced locally, and provides variable incentives to induce both volume production and logistics efficiency.
The CARS program targets to generate 200,000 new jobs, bring in fresh investments worth US$1.2 billion, stimulate local demand by increasing vehicle sales to US$9.2 billion, and effectively implement industry regulations that will revitalize the Philippine automotive industry. The program is anchored on the resurgence of the automotive manufacturing industry and in priming the country as a regional automotive manufacturing hub.