Yesterday, the Department of Trade and Industry (DTI) announced the implementation of provisional safeguard duties on car imports in the Philippines. The measure comes in the form of cash bonds amounting to P70,000 per unit for passenger cars, and P110,000 per unit for light commercial vehicles (LCV), and will kick in 15 days from today, January 5.
Protecting the local manufacturing industry
According to the DTI, the move comes in an effort to protect local manufacturing from the impact of vehicle importation, with agency secretary Ramon Lopez seeing the measures as a means of ensuring a “level playing field for our local industry.” The Association of Vehicle Importers and Distributors (AVID), though, begs to disagree.
In a statement, AVID likened the implementation of these safeguards to “pulling the rug from under the auto sector,” stressing the move will only serve to hinder the local auto industry’s recovery from COVID-19.
“The move to impose provisional safeguard measures on imported vehicles is like pulling the rug from under the auto sector that is still struggling to get back on its feet with a 40% drop in sales in 2020,” the statement reads.
“This further dampens the recovery outlook of the industry at a time when all players and stakeholders are appealing for government support. The measure will aggravate the already anemic demand and make it harder for Filipinos to afford personal mobility with the projected price hikes.”
A call to improve the ease of doing business
It goes on to add that the DTI’s measures will do more harm than good, saying “penalizing imports will not trigger investments or create more jobs, much less address issues on the regional competitiveness of our local manufacturing sector.
“Alternatively, we call for long-term policies that will further improve the ease of doing business which would open opportunities for investments, create jobs for our workers, and provide the Filipino reliable and affordable means of transport.”
Prior to the DTI’s announcement, a report based on ASEAN Automotive Federation data forecasted that Philippine car sales would grow by 21.5% compared to the country’s disheartening 2020 performance during the height of the COVID-19 pandemic. There’s no telling yet how these measures will affect this outlook.
So, do you think the DTI made the correct call here? Let us know in the comments.