Dti May Impose Safeguard Measures Against Cbu Vehicles

The sudden proclamation of Honda Cars Philippines’s determination to shutter its local assembly effective March of this twelvemonth underscores the frailty of the Philippine automotive industry; then much then that a worker’s group, made of employees from diverse automakers, has petitioned the Department of Trade in addition to Industry (DTI) to reconsider the country’s set nether the Association of Southeast Asian Nations Free Trade Agreement or AFTA.

The Philippine Metalworkers’ Alliance or PMA, which has members encompassing Toyota, Mitsubishi, in addition to Isuzu amidst others (Honda isn’t included) is seeking protection nether Republic Act 8800 or the “Safeguard Measures Act.”

According to the law:

The State shall promote the competitiveness of domestic industries in addition to producer based on audio industrial in addition to agricultural evolution policies, in addition to technical resources. In pursuit of this destination in addition to inward the populace involvement the State shall furnish safeguard measures to protect domestic industries in addition to producers from increased imports, which caused or threaten to drive serious injury to those domestic industries in addition to producers.

As a duly recognized entity alongside the Department of Labor in addition to Employment (DOLE), the PMA is seeking remedy nether the guise that local automotive assembly is nether threat from increased dependency yesteryear carmakers towards Completely Built-up Units (CBU) from Association of Southeast Asian Nations in addition to elsewhere.

Data gathered yesteryear the DTI revealed that over the course of didactics of the last v years, vehicle imports bespeak maintain risen 35 pct from 153,531 units to 207,248 units, piece local vehicle production cruel to its lowest betoken inward v years—some 33 pct lower.

Digging into the details, the top v source countries for the Philippine auto marketplace are Thailand, Indonesia, South Korea, Japan, in addition to Republic of Republic of India from 2014-2018. Even to a greater extent than interesting is that since the implementation of a costless merchandise understanding alongside China, imports from at that spot rose from 800 units annually to to a greater extent than than 6,000 inward 2018.

By 2019, Indonesia climbed upwards every bit the Philippines’s leading source of imported vehicles (57 percent) followed yesteryear Thailand (17 percent), in addition to surprisingly, Red People's Republic of China (12 percent). Nippon accounts for simply half dozen percent, piece Republic of Korea is downwards to simply iii percent.

Through its research, the DTI establish that when comparison imported vehicles (landed cost) versus their domestically produced counterparts, they’ve establish that Thai produced vehicles undercut Philippine made ones yesteryear xviii percent, Republic of Indonesia yesteryear 24 percent, in addition to South Korea, 24 percent. The overall average? Cars produced exterior the dry reason are 21.75 pct cheaper.

Based on these findings, the DTI finds merits inward the PMA’s stance, in addition to accepted the petition to initiate a to a greater extent than thorough investigation on whether the Philippines should initiate safeguard measures against CBU vehicles. While DTI did non outline what kind of activity they tin post away convey to safeguard local assembly, they tin post away recommend to Congress to enact laws or improve existing laws, peculiarly those dealing alongside the importation of CBU vehicles.