By IRMA ISIP

The Board of Investments (BOI) will overhaul the motor vehicle development program (MVDP) and introduce amendments to the six-year old program to make it consistent with the times.

The BOI would also reconcile the MVDP with the findings of a study commissioned by the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) for the policy direction that would make the industry competitive.

"If Deloitte will come up with a recommendation to overhaul the MVDP and if that recommendation is adopted by government, we have to amend EO (executive order 156)," said Elmer C. Hernandez, BOI managing head.

Hernandez and industry executives met last week to make an assessment of the current MVDP, which they found to be outdated in view of liberalization as well as our multilateral, regional and bilateral trade commitments.

"For the program to be dynamic, you have to continue to improve on it. You have to review EO 156 on the basis of the Deloitte study. Let’s see if we have a chance," Hernandez added.

Deloitte is an international consultancy firm, which conducted Australia ’s automotive competitiveness and investment scheme responsible for the development of the industry in that country.

A team of Deloitte consultants has already conducted "a scoping" of the policy environment, meeting and interviewing government officials and industry officials. A follow-up meeting is expected within a few days, after which a preliminary report would be issued.

The final report would be out by October, Hernandez said.

"We are making an assessment of the industry to identify its potentials for competitiveness. EO 156 was made in 2002 and there have been a lot of developments since then, " Hernandez said.

He was referring to various trade agreements we have entered into, the soonest is the Asean free trade, which breaks tariff walls by 2010. Competition from China has also never been more pronounced than now.

This would be the third generation of the MVDP, which has been constantly, updated through memorandum orders, the last being the inclusion of the automotive export program, which gives incentives to exporters of locally-assembled vehicles.

The enabling law, EO 156 bans the importation of all types of used motor vehicles and parts and components, except those that may be allowed under certain conditions.

It also restructures the most favored nation tariff rates for motor vehicles and their raw materials and parts and components at such rates that will encourage the development of the Philippine motor vehicle industry.

The program restructured the current excise tax system for motor vehicles with the end view of creating a simple, fair and stable tax structure.

There are 6 assemblers of passenger cars; 15 makers of commercial vehicles; and 25 in motorcycle manufacturing.

The motor vehicle assembly sector is grouped based on the type of motor vehicles, such as passenger cars, commercial vehicles (utility vehicles, pick-ups, vans, trucks, buses, special purpose vehicles) and motorcycles.