By Bernie Cahiles-Magkilat

The Board of Investments (BOI) is crafting a specific incentives package for the manufacturers and body builders of the modern Philippine utility vehicles (PUV) that will complete the government’s CARS Program, which seeks to give a new lease on life on the country’s car manufacturing industry.

Trade and Industry Secretary Ramon M. Lopez, who is also chairman of the BOI, noted of the incentives package for PUV Modernization Program assemblers at the unveiling of 16 PUV prototypes at the opening of the 1st Philippine Auto Parts Expo at the Philippine Trade Training Center.

Under the CARS Program, a participant is entitled to $200 million worth of incentive package for the production of 200,000 units of cars over a six-year period. This will translate to $1,000 subsidy per unit. But Lopez said that the incentive for the PUV Program participants may be “higher or lower than the $1,000” the CARS Program has committed to the first two program participants.

“We are still reviewing the incentives package for the third slot CARS Program participant,” he said. What is certain though in the PUV incentives package is this will go to the manufacturers or the assemblers of the PUV models as Lopez also stressed of the importance of the local content component of the PUV as this is will be driver in the local manufacturing of auto parts.

By giving the incentives to builders and assemblers, “we encourage them to produce the modern PUV at cheaper cost and able to pass on the savings to buyers.” Incentive is on the manufacturing side while a different government financing package is also being finalized for the acquisition side or the operator side, which is aimed at making the operators more profitable and sustainable, he explained.

So far, there are already local five motor vehicle body builders participating at the expo including Almazora Motors Corp., Centro Manufacturing Corp., Del Monte Motors, Hino Motors Philippines Corp. and Sta. Rosa Motor Works, Inc. There are also 8 platform suppliers such as Foton Motor Philippines, Diamond Motors Corp. (for Mitsubishi Motors Philippines Corp.-FUSO), Hino Motors Philippines Corp., Hyndai Philippines, IKK Ichigan, Inc., Isuzu Philippines Corp., Philippine Utility Vehicle (PhUV), Inc., and Pilipinas Taj Autogroup, Inc. (TATA).

Ferdinand Raquelsantos, president of the Philippine Parts Makers Association, stressed that while the government does not prevent traders to supply imported completely built-up PUV packs, they should not be included in the PUV Modernization Program nor be entitled to government incentives because the program is meant only for those undertaking local assembly operation.

Raquel Santos said there will be 120-150 units of PUVs on the streets by end this year and additional 350 units by the first quarter of next year for a total of 500 modern PUVs by then. The Bureau of Product Standards has already come up with the initial dimension for the planned 4 PUV classes.

He said the PUV’s rollout is expected in July 2018. Vicente Mills Jr., chairman of Hino Motors, said Hino has committed 30 PUVs. There are estimated 200,000 units of jeepneys to be replaced with the modern PUVs, which are equipped with eur4 engine, GPS, Wi-Fi, automated fare collection system, forward seating, side entrance, among others. This does not include the motorcycles and mini buses that need to be replaced also.

Martin Delgra, chairman of the Land Transportation Franchising Regulatory Board, said in a speech at the expo that the PUV Modernization Program as the government’s biggest infrastructure program in terms of impact on the number of Filipinos involved, money, and collaboration among government agencies here and abroad. According to Lopez, the review of incentives to manufacturers have to be balanced whether it is for export or domestic-oriented as he noted of the huge domestic market because of the young population.

He also noted of the huge exports market in the ASEAN region, which has over 600 million population and 3.2 billion population, including its 6 partner countries — India, Japan, South Korea, Russia and Australia-New Zealand.