Philippines Auto Industry Assemblers Reject New MVDP
Domestic automotive players have rejected the new Motor Vehicle Development Program (MVDP) questioning some provisions including allowing the entry of used motor vehicle parts and components that it would be better for the government to maintain the old program.
In a letter sent to Malacañang dated March 1, 2010, Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) president Elizabeth H. Lee has sought Malacanang’s intervention as Trade and Industry Secretary Peter B. Favila has already endorsed the Executive Order for the new MVDP for President Gloria Arroyo’s signature.
Favila’s endorsement of the new MVDP was among his last efforts as DTI Secretary. Favila’s appointment as member of the Monetary Board, the policy making body of the Bangko Sentral ng Pilipinas, took effect last March 5, 2010.
“It is in this light that the industry is appealing to you to maintain the current MVDP (EO 156) to avoid creating uncertainties and instability in the industry. Our investments and business plans are anchored on the framework and policy objectives of EO 156 particularly the prohibition of imported used vehicles including used engines, parts and components,” Lee said in a letter addressed to President Gloria Arroyo.
Lee said the new MVDP provisions would only frustrate the government’s goal of developing the local automotive industry, particularly the CKD assembly.
One of the major revisions in the draft EO, Lee said is the reclassification of imported used engines and other components from prohibited to regulated importation.
“Instead of strengthening the prohibition, this revision effectively relaxed the importation of these commodities which will undermine the viability of the auto industry and retard the growth of CKD vehicle production to the detriment of the workers, assemblers and parts and components manufacturers,” Lee said..
Lee also said that this policy shift could result in the dismissal of pending cases against the previously unlawful importations of used engines and components thereby negating whatever gains of the government’s anti-smuggling efforts. “We firmly believe that the current MVDP (EO 156), with no less than the highest court of the land affirming your policy on used vehicles, is one of the major legacies our your administration. The gains of EO 156 must be sustained to further strengthen its implementation to fully realize its objectives,” Lee said.
Lee cited Arroyo for a successful watch of the industry noting that the industry’s share in the annual initial vehicle registration has exceeded 50 percent for the first time in more than 10 years.
Lee cited the president’s efforts with the favorable ruling of the Supreme Court upholding the government’s policy against the importation of used motor vehicles under EO 156.
Manila Bulletin
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