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The Department of Commerce and Industry (DTI) said it will impose a provisional safeguard duty in the form of a cash bond amounting to P70,000 per unit for imported passenger cars and P110,000 per imported unit for light commercial vehicles.
In a statement on Monday, the DTI said that the preliminary determination on the request for safeguard measures submitted by the Philippine Metalworkers Alliance found that the increased importation of passenger cars and light commercial vehicles is a substantial cause of serious damage to the national motor vehicle manufacturing industry.
DTI’s preliminary determination also found that there are critical circumstances in which a delay in imposing a measure would cause damage to the industry, which would be difficult to repair.
“The Philippines has one of the most open markets relative to our ASEAN neighbors. While we generally do not restrict the products that enter the market, we must also guarantee a level playing field for our local industry, ”said Commerce Secretary Ramón López. Asean is the Association of Southeast Asian Nations.
The provisional safeguard measures enter into force for 200 days from the issuance of an order by the Customs Commissioner and while the case is under formal investigation by the Tariff Commission.
“The provisional safeguard measures will provide a respite to the national industry, which has been facing an increase in the import of competing brands. To clarify, import 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, ”said López.
“That said, it will also facilitate the structural adjustment of local industry to make it more profitable and technologically advanced,” he added.
By virtue of the Republic Law 8800, or the “Safeguard Measures Law”, any person, natural or legal, that belongs to or represents a national industry may present a verified petition to the Secretary of Commerce and Industry requesting that take steps to repair the serious damage. to the domestic industry caused by increased imports of a like or directly substitutable product.
DTI said that based on its findings, passenger car imports increased by an average of 35 percent during the period of investigation (POI) from 2014 to 2018, while the share of imports relative to production showed that the Imports exceeded national production from 295 percent in 2014 to 349 percent in 2018.
Imports of light commercial vehicles, which include pickups, on the other hand, increased significantly during the PDI from 17,273 units in 2014 to 51,969 units in 2018.
DTI said that the share of imports relative to domestic production also increased significantly from 645 percent in 2015 to 1,364 percent in 2018.
Despite the efforts of the domestic automotive industry to defend its market share and compete with foreign suppliers of motor vehicles by increasing its domestic production and sales, DTI said it was unable to take full advantage of the domestic market growth that occurred during the year. period.
According to DTI, the market share of domestic passenger car sales contracted to a range of 22 to 25 percent, while the share of imports captured more than 70 percent of the market.
Meanwhile, the share of light commercial vehicles fell from 18 percent in 2014 to 7 percent in 2018, while imports accounted for a growing share by around 82 percent (2014) to 93 percent (2018) of the Philippine market.
DTI said that the domestic industry lost sales even as the market grew.
He further said that data from the Philippine Statistics Authority shows that employment in the motor vehicle manufacturing sector, which includes manufacturing of motor vehicles, car bodies, parts and accessories, decreased by 8 percent in 2018 in compared to the 2017 level of 90,275 employees.
“Safeguards are in place to protect local manufacturers and producers and to prevent other companies from leaving the country. If we recall, the Isuzu D-Max production halt in July 2019 and the Honda Motors Philippines assembly plant closure 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, ”said López.
The records of the case will be sent to the Tariff Commission, which will conduct a formal investigation that will include public hearings in the coming weeks, after which it will present its findings and recommendations to the Secretary of Commerce and Industry.
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