By Catherine N. Pillas
Aside from automotive, the Department of Trade and Industry (DTI) will select four more industries that will get “high impact” incentives as part of the government’s efforts to sustain the resurgence of the country’s manufacturing sector.
Trade Secretary Adrian S. Cristobal Jr. said more industries will enjoy government incentives under the Manufacturing Resurgence Program (MRP), after Congress increased the budget for the MRP, this year. For 2016, the MRP was allocated P289 billion, higher than the P239-billion budget it received last year.
Cristobal said the government will soon announce the industries that will enjoy an incentives package similar to that offered by the Comprehensive Automotive Resurgence Strategy (CARS) Program for the auto industry.
“The MRP will continue in implementation. To achieve inclusive growth, we believe that the manufacturing resurgence we are seeing now must be sustained,” he said.
“The CARS Program, we see it as a template for focused and targeted industry development. This year we are looking at the industry road maps we have. We would like to package three to five more programs of this kind,” Cristobal added.
The MRP is considered DTI’s broad strategy to ensure the continuous growth of the country’s manufacturing sector. The CARS is a sub-program for the automotive sector under this strategy.
Under the CARS program, P27 billion worth of government incentives will be provided to qualified car manufacturers to ramp up production and make the Philippine auto sector more attractive to investors.
The Board of Investments (BOI) said it will open the application period for the CARS Program next week, after the implementing rules and regulations for it.
Cristobal met with local car makers at the BOI office in Makati City on Thursday.
“On industry development and promotion, we will fast-track the implementation of the CARS program this year,” Cristobal said.
DTI Assistant Secretary for Industry Development and Trade Policy Rafaelita Aldaba said interested participants have a month from next week to submit their application.
Cristobal had mentioned in a Congressional hearing on the DTI’s budget last year that Toyota Motors Philippines Corp. (TMPC) and Mitsubishi Motors Philippines Corp. (MMPC) are “strongly interested” in joining the CARS Program.
Sources said the TMPC has already submitted a sourcing plan to DTI for its Vios model. The plan breaks down the imported components of the model versus the locally sourced parts.
Incentives under CARS will be given in the form of tax-payment certificates, which will defray any tax and duty obligations of participants to the National Government, specifically excise tax, income tax, import duties, and value-added tax (VAT).
But before participants could tap the P27-billion incentive package, they must meet certain conditions which include the manufacture of key auto parts being imported into the country and the production of at least 200,000 vehicles a year.
These conditions will entail substantial investments in production and technology on the part of CARS participants.
Aside from providing incentives to industries, the MRP will also fund projects of government agencies. These include the Department of Science and Technology’s die and mould making program, DTI’s localization program for the rubber industry, and the creation of fabrication laboratories for small businesses.
The DTI implements the MRP in coordination with a number of government agencies including the Departments of Agriculture, Labor and Employment, Energy, and the Philippine Coconut Authority and the Technical Education and Skills Development Authority.