The decline in local automotive manufacturing over the years has been commonly attributed to high manufacturing costs

The country imported about a million cars from 2014 to 2018. Top sources were Thailand at 428,000 units, Indonesia with 312,000 units and Korea with 101,000 units.

The Department of Trade and Industry (DTI) said it is evaluating the application of a safeguard duty on motor car imports, filed amid competition challenges faced by the domestic automotive industry.

DTI undersecretary Ceferino Rodolfo on Thursday said the trade agency received the safeguard filing from the Philippine Metalworkers Alliance (PMA), a member of trade union Sentro ng mga Nagkakaisa at Progresibong Manggagawa, for the application of duty on complete built-up (CBU) car imports with harmonized system code 8703 or motor cars.

“The DTI through the Bureau of Import Services is assessing the application for safeguard duty on imported automobiles filed by the PMA,” Rodolfo said in a briefing at the Board of Investments building in Makati, Thursday last week.

Rodolfo said PMA’s application is made on the basis that the surge of passenger car imports from 2014 to 2018 has adversely impacted the local car assembly and auto parts manufacturing industry.

According to data, CBU imports rose over 35 percent to 207,000 units in 2018 from just 153,000 units in 2014. During the period, the country imported about a million units. Top sources were Thailand at 428,000 units, Indonesia with 312,000 units and Korea with 101,000 units.

Moreover, Rodolfo said the PMA in its application stated a decline in the employment of parts makers and auto companies as well as a decline in the numbers of automotive models assembled in the country, linked to the rising number of imported car units in the period.

The decline in local automotive manufacturing over the years has been commonly attributed to high manufacturing costs, making the country a less attractive investment destination compared to other neighbor countries such as Thailand, whose motor vehicle production rose nine percent to 1.98 million units in 2018, according to data from the Asean Automotive Federation.

Comparatively, the Philippines’ production plunged 44 percent to 141,252 units in the same year.

Currently, car models that are still being built in the Philippines include the Innova and Vios brand under Toyota Motor Philippines and Honda City under Honda Cars Philippines Inc. Nissan Philippines, Inc., which has a long history of manufacturing several car brands in the Philippines, is down to manufacturing only the Almera model.

Mitsubishi Motors Philippines Corp. also locally manufactures Mirage hatchback, Mirage G4 and L300. Formerly, MMPC manufactured the Adventure model here. Other car companies which has set up manufacturing shops for assembly in the Philippines include Foton Philippines, Hyundai Asia Resources Inc. and Isuzu Philippines Corp.

According to Rodolfo, the DTI will first have to convene the technical working group on trade remedies “to officially look at the application for safeguard measure.”