PH car parts makers seeking duty protection

Car parts makers called on the government to strengthen the Comprehensive Automotive Resurgence Strategy program to protect local producers, as the Tariff Commission halted investigations on the alleged import surge that may lead to the lifting of provisional safeguard duties on foreign-made vehicles.

The Philippine Parts Makers Association said the government should protect parts manufacturers with the strengthening of the local industry. The Tariff Commission earlier said it found no dramatic increase in the volume of imported vehicles from 2014 to 2019.

PPMA president Ferdinand Racquelsantos said industry data covered by the period of investigation yielded no significant increase in the volume of imported vehicles and even showed that imports were steadily declining.

“In fact, recent sales have been declining due to the provisional safeguard duties imposed on foreign-made completely built-up units. But sales of CKD [completely knocked-down] vehicles were sustained coming from last year,” Racquelsantos said Monday.

The TC subjected vehicle imports to provisional safeguard duties of P70,000 per unit of imported passenger cars and P110,000 per unit of light commercial vehicles since February 2021.

Data submitted to the TC showed that imports of CBU motor vehicles were on an increasing trend from 2014 until 2017 but started to decline from 2018 to 2020. Total imports of CBU motor vehicles peaked in 2017 with 306,819 units, with 78 percent imported by the domestic industry and 22 percent by traders.

The high importation in 2017 was attributed to the anticipation of the market to the implementation of Republic Act No. 10963 or Tax Reform for Acceleration and Inclusion law which took effect on Jan. 1, 2018 and the stricter implementation of Euro 4 emission standards.

Imports of CBU motor vehicles went down to 233,346 units in 2018 from a high import level in 2017 and further declined to 108,770 units in 2020 amid the adverse economic effect of the COVID-19 pandemic.

Racquelsantos said the Department of Trade and Industry would likely to follow the recommendation of the TC as the “big boys [car companies] were able to lobby very well.”

“The government needs to extend the CARS program. One reason is because participants will not be able to hit the required production volume and second is that the industry needs the support of the government to rise from the pandemic,” he said.

Petitioner Philippine Metalworkers Association plans to file an appeal with the Court of Tax Appeals and the Bureau of Customs if the TC and the Department of Trade and Industry ordered the refund of the provisional duties collected from importers.

“The BOC has to issue an order to stop the collection of provisional safeguard duty upon receipt of instructions from Department of Finance,” the group said in anticipation of the decision of the DTI.

Topics: Comprehensive Automotive Resurgence Strategy program , Philippine Parts Makers Association , Ferdinand Racquelsantos
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