The government is studying another incentive program to encourage automotive players to assemble at least one model per company in the country.
Trade Secretary Ramon Lopez said the agency was reviewing the Motor Vehicle Development Program to expand the incentives to companies that would invest more in the Philippines.
“Right now, this is just an idea. But we have talked about this—on how to improve the MVDP, so we can encourage brands to come in and do their manufacturing or assembly here,” Lopez said at the sidelines of the launch of GoLokal’s premium sub-brand Marahuyo at the Luxe Duty Free Shop in Mall of Asia Complex.
The department may either subsidize the high cost of electricity associated with power-intensive industries such as automotive or provide support on a performance-based contract.
It was reportedly mulling over another program like the Comprehensive Automotive Resurgence Strategy scheme, but with a different set of incentives.
The new MVDP will also be time-bound.
CARS, the flagship incentives program for the auto industry, attracted only two players because of the stringent criteria required from participating companies.
The revised MVDP is seen to add more value to the automotive industry and possibly welcome new brands and players to the industry.
Automotive players still have the option to register with the Motor Vehicle Development Program to obtain incentives that otherwise will not be given under CARS.
CARS is a P27-billion time-bound and performance-based fiscal and non-fiscal incentives program that supports new investments in fixed-capital expenditures in new parts making capability and encourages large scale production in vehicle assembly.
Compared to the CARS program, incentives under MVDP are limited to tax rebates and income tax holiday.
The government approved Executive Order No. 877-A or the MVDP on June 3, 2010 to boost the local vehicle assembly.