The support fund for the Department of Trade and Industry’s (DTI) Comprehensive Automotive Resurgence Strategy (CARS) Program will likely become available by 2016, a trade official said on Monday.
The CARS Program details the fiscal and nonfiscal incentives for local carmakers.
Assistant Secretary for Industry Development and Trade Policy Rafaelita M. Aldaba told reporters that the funding of the CARS Program, which aims to make the local automotive industry competitive and ramp up local production versus imports, was not included in the proposed national budget for 2015.
“There’s a process; we will include that in the budget once signed. It needs to be signed first. The funding will come from the General Appropriations Act, but it was not included in the 2015 budget,” the DTI official said.
The said fund will be used to bridge the gap in the production cost that is making local automakers less competitive compared to their peers in the region. According to studies, producing a car in the Philippines is $1,000 more expensive than making the same unit in other Asean countries.
The demand for local vehicles is seen to reach 500,000 units by 2022, according to
the CARS Program.
The program seeks to encouraging local car firms to increase domestic production and make them competitive in the export market.
“To really increase local production and lower costs, they must be able to export,” Aldaba said.
But Aldaba said the program, itself, can be implemented once Malacañang gives the go signal.
The CARS Program is expected to generate as much as 300,000 jobs according to the DTI. Without it, domestic production can dwindle to as low as 50,000 by 2022, with imports possibly spiking to 400,000 units
Savings in foreign-exchange requirements are seen at P757.8 billion, translating to reduced imports if the program is implemented.