By IRMA ISIP

Trade Secretary Peter B. Favila yesterday said the Department of Trade and Industry (DTI) will not amend a provision in Executive Order 156 on the importation of used vehicles.

"We can’t touch that provision… we cannot do the other way," Favila told reporters.

Favila said he has committed to the Chamber of Automotive Manufacturers of the Philippines Inc. that there is no amendment to EO 156 or the Motor Vehicle Development Program.

Favila said the MVDP is subject to regular review but the industry is always consulted.

At the same time, Favila said the Board of Investments (BOI), which is implementing the MVDP, has been asked by Campi to factor into the MVDP review the inputs of a comprehensive study the industry has commissioned on the long-term competitiveness of the automotive industry.

The study is being conducted by consultancy firm Deloitte on a 10-year policy framework for the automotive industry.

The Campi saw the need for policy intervention as liberalization under Asean sets in by 2010.

Some of the components of the study involve how tariffs can be used as a tool to sustain local production.

However, the Campi wants to look beyond tariffs by coming up with creative ways of policy support for the industry, balancing the interests of the domestic industry and liberalization.

Deloitte officials have met with government and industry officials two times. The results would be out before the end of the year.

Campi president Elizabeth H. Lee has written to Favila seeking clarification on the Favila’s pronouncement of a review of the MVDP.

The Association Automotive Industry Workers Alliance (AIWA) has alleged that the DTI is moving to partially lift the ban on second hand imports on a per quota basis for five ports including Port Irene in Cagayan. This has been denied by BOI managing head Elmer C. Hernandez.

"Campi would like to respectfully express its serious reservation on the proposed amendment of EO 156 at this time… Campi is placing its full faith on the wisdom of the DTI and BOI as it recognizes the implications of such amendment to the industry and the economy," Lee said in her letter.

Lee also said "any substantial radical policy shift would undermine investments and commitments made by the automotive industry" and would sidetrack and derail the members’ long term business plans.

"Any change of this nature and magnitude would have a negative effect on investors’ confidence in the Philippines as an investment destination," Lee said.

She also said Campi supports EO 156 as upheld by the Supreme Court.

Multisectoral group Fair Trade Alliance (FairTrade) said the DTI/BOI should strengthen EO 156 and not open the doors for importation.

FairTrade and AIWA said EO 156 was promulgated by the government to help revitalize the ailing auto industry and regain investor confidence on the stability of laws in the country.

FairTrade said this EO succeeded in increasing capacity utilization of the existing assembly plants, which hit 30 to 60 per cent in the late l990s up to the early 2000s.