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The automotive industry welcomed the recommendation of the Philippine Tariff Commission that no safeguard measure be imposed on importations of CBU (Completely Built Up) passenger cars and CBU light commercial vehicles.

The Department of Trade and Industry, which initiated the investigation of the proposed safeguard measure on imported motor vehicles, is expected to implement the Tariff Commission’s recommendation soon.
Provisional safeguard duties had been imposed on the importation of new motor vehicles pending the conclusion of the Tariff Commission’s investigation.  The safeguard tax forced car companies to add a P70,000 cash bond to the Suggested Retail Price (SRP) of passenger cars or P110,000 to the SRP of light commercial vehicles
Meanwhile, in an email to PDI Motoring, lawyer Rommel Gutierrez, president of the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and concurrently 1st vice president of Toyota Motor PH Corp., commented: 

“CAMPI commends the process undertaken by the Department of Trade and Industry (DTI) and the Tariff Commission (TC) in the initiation and resolution of the petition filed by the Philippine Metal Workers Association for Safeguard Measures.  The Final Report issued by the Tariff Commission finding that there is no basis for the imposition of safeguard duty has put to rest the uncertainties brought about by the petition.  The automotive manufacturing sector will continue with its strong collaboration with the government in its efforts to sustain local production of vehicles and address the concerns of various stakeholders.  As the country continues to recover from the Covid 19 pandemic, the automotive industry remains committed to provide better products and services to its customers and contribute to the economy and society as a whole.”

A welcome development

Association of Vehicles Importers and Distributors, Inc. (AVID) president Ma. Fe Perez-Agudo, who is concurrently president and CEO of Hyundai Asia Resources, Inc. and Changan Motors PH, texted PDI Motoring:
“We consider this a welcome development for the industry but more so for the consumer as vehicle prices would revert to the original, hence stimulating demand.  With this issue settled, we can now redouble our efforts to provide the best value to customers, and so make our way, hopefully more quickly, to ultimate recovery.”
The Tariff Commission concluded on July 22 its formal investigation of the imposition of safeguard measure against the importations of motor vehicles that was the subject of a petition filed by the Philippine Metal Workers Association.  
The metalworkers may have based their petition on the observation that brand-new CBU vehicle imports rose from 153,000 units in 2014 to more than one million units by 2018.

Probably as a result, as reported by the Philippine Statistics Authority, the number of auto assembly workers shrank from 86,428 in 2015 to 57,982 in 2018, reflecting a 32 percent increase in jobs lost within a three-year period.
In 2019, the Asean Automotive Federation reported that the Philippines produced 95,094 vehicles, although the PH auto industry claimed that 412,106 new vehicles were sold in the country that year.  This led to speculation or the conclusion that more than 90 percent of the brand-new motor vehicles sold locally in 2019 were imported models.
However, the Tariff Commission established that there was no increase in imports of new motor vehicles during the period of investigation (POI) from 2014 to 2020, thus “the determination of serious injury or threat thereof, causation, and unforeseen developments has become moot and academic.”

In its recommendation dated July 22, 2021, the Tariff Commission stated: “Considering that CBU passenger cars and CBU light commercial vehicles were not imported in increased quantities (whether absolute or relative to domestic production) during the POI, the Commission hereby terminates its formal investigation and recommends that no definitive general safeguard measure be imposed on importations of the CBU passenger cars and CBU light commercial vehicles subject of the investigation.”

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