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Big news for the local auto industry starting in 2021: The Department of Commerce and Industry (DTI) has announced that it will impose certain cash bonuses on imported vehicles as interim safeguard duties.
This decision comes in response to a request from the Philippine Metalworkers Alliance to protect the local automotive industry amid the influx of imported vehicles in recent years. With this new measure, a cash bond of P70,000 for united for imported cars and P110,000 per unit for imported light commercial vehicles.
“The Philippines has one of the most open markets relative to our ASEAN neighbors. While we generally do not restrict the products entering the market, we must also ensure a level playing field for our local industry, ”said the DTI secretary. Ramon Lopez.
Once a verified petition has been filed with the DTI, the agency, under the Republic Law No. 8800 or the Safeguard Measures Law, must take actions to remedy any serious damage to the national industry caused by the increase in imports of a similar or directly substitutable product. .
In this case, the DTI has determined that any delay in imposing safeguard measures will cause damage to the local manufacturing industry that will be “difficult to repair.”
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“The provisional safeguard measures will provide a respite to the national industry that has been facing an increase in the import of competing brands. To clarify, importing is not prohibited and consumers will still have options to choose from, but imported vehicle models covered by the rule will have safeguard import duties, ”added López. “That said, it will also facilitate the structural adjustment of local industry to make it more profitable and technologically advanced.”
The DTI findings also show that the amount of which passenger car imports exceeded domestic production increased from 295% in 2014 to 349% in 2018. In the same investigation period, imports of light commercial vehicles (including vans ) in relation to local production also increased from 645% to 1364%.
This increase in imports was reflected in terms of real market share. Imported passenger cars and light commercial vehicles accounted for more than 70% and 93% of the market share, respectively, in 2018.
“Safeguards are imposed to protect local manufacturers and producers and to prevent other companies from leaving the country,” López continued. “If we recall, the discontinuation of Isuzu D-Max production in July 2019 and the closure of the Honda Cars Philippines assembly plant in the first quarter of 2020 affected local jobs and the Philippine economy. It can also attract vehicle manufacturers to operate in the country and create more jobs. “
The safeguard measures will take effect 15 days from today, January 5, 2021. Initially, they will be in effect for 200 days. During this period, the Rate Commission is expected to conduct a formal investigation that will include public hearings in the coming weeks before further action is taken.
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