MANILA, Philippines — There is nothing new in the new automotive study conducted by a private think tank from the Executive Order 877-A or the Motor Vehicle Development Program (MVDP), an industry official said.
This developed as the University of Asia and the Pacific (UA&P) already submitted to Trade and Industry Secretary Gregory L. Domingo its study on the automotive sector.
“EO 877-A is an output of the automotive industry and the UA&P study is also an output of the same industry, so there is nothing new,” an official said.
According to the official, the study has interviewed members of the Philippine Automotive Competitiveness Council Inc., which is composed of motor vehicle assemblers and importers and the Chamber of Automotive Manufacturers of the Philippines Inc., which is an expanded membership to include trucks and buses, importers and assemblers.
The study also interviewed individual players of the industry just like what the EO 877-A.
In fact, the official pointed out, EO 877-A has a wider participation because the Board of Investments conducted several consultations and public hearings. It was preceded by three studies conducted by Deloitte Consulting Inc. funded by CAMPI and two other studies, one automotive study by Dr. Max Maquito of the University of Tokyo in coordination with the UA&P entitled, “Shared Growth Study Milestone: May 2009 Note of the Shared Growth Roadmap“.
It took almost two years to finally come up with the EO 877-A as BoI has to consider all the interests of the various industry players including the auto parts manufacturing sector, importation of used motor vehicles and the creation of an industry council.
“We even have taskforce with private sector to come up with the IRR of EO 877-A so whatever was the output is the same,” the official said.
The new UA&P study, however, was primarily spearheaded by former Thomas G. Aquino, former DTI undersecretary for international trade.
Earlier, Domingo said he got a copy of the UA&P study but said he still has to read it.
“Give me six months,” he said in jest.
EO 877-A was among the last EOs signed by then President Gloria Arroyo before she stepped down from power.
The new officials of the DTI/BoI proceeded with the formulation of an IRR for the expected implementation of the EO 877-A but Domingo was half-hearted over the implementation of EO.
Domingo’s main contention in the EO 877-A was that it does not offer anything new in terms of making the industry become an exporter of completely built-up vehicles.
Domingo has been searching for some “out-of-the-box solutions” to push for the development and competitiveness of the auto industry and make it export CBU packs.
He believes that large scale exports of completely built-up vehicles, not domestic market, is the ultimate measure of competitiveness of this domestic industry. Industry players, however, do not seem to agree with CBU exports saying the domestic market has yet to be developed to support CBU exports.
Instead, the industry has been pushing for the development of parts manufacturing because that would help make locally assembled cars less expensive that would enable Filipinos to afford a car.
But Domingo pressed that, “Export is the ultimate measurement of your competitiveness. If you cannot export, you are not competitive.”
Domingo admitted that DTI is still trying to feel its way with no clear strategy in sight for the auto industry.
“For the auto we’re trying to feel our way there. It’s still not clear what the strategy is for Auto, we are in discussions now with auto manufacturers both in Japan and China to see if there is a niche that the Philippines can compete in on a regional basis,” he said.
Based on the DTI perspective, Domingo said that to have a serious auto manufacturing capability, the locally assembled vehicles must be exported.
“If we are unable to export and just serve the domestic market, then that means our industry is not competitive. So, our ambition for the auto industry is to be able to export complete vehicles,” he said.
But right now, he said, only one company is exporting, which is Ford Philippines and of minimal quantities.
“We really want to find that niche that will allow us to export initially to the ASEAN region,” he added.
He noted though of the country’s huge auto parts exports, particularly wiring harness and manual transmissions that are supplied to the world.
Domingo said the automotive sector among the certain sectors that are not yet ripe for the picking.
“It requires some additional work and some strategy in terms of pursuing it,” he said.
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By: Bernie Cahiles-Magkilat
Source: Manila Bulletin, Nov. 9, 2011
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