MANILA (Mabuhay) – The Philippines plans to set aside around P27 billion ($600 million) to help fund projects and incentives for its shrinking auto industry as part of a development program now under review with the office of President Benigno Aquino III, a senior government official said on Tuesday.
The government and the local auto industry have been deliberating for more than two years on how best to expand the sector, including offering incentives, to make local manufacturers more competitive with others in Southeast Asia.
“You are going to set aside a huge amount, a big amount of money, $600 million for the program… maybe more, maybe less,” Rene Almendras, secretary to the cabinet, told reporters on the sidelines of an economic briefing in a description of the plans.
“We want to make sure that the impact of the money we will put there will not just be one year, two years,” he said.
Automakers are hoping to capitalize on the government roadmap to boost local production, after sales hit record highs for several months this year on robust consumer spending. Vehicle ownership in the country remains the lowest among Southeast Asia’s five biggest economies at around just 35 per 1,000 people.
Almendras said the government was still discussing how best to deploy the money to be allotted to the sector, but stressed that the roadmap will likely be finalized this year.
“The game plan is to create an industry that will generate jobs. To get there, you need to make sure that you have the right parameters,” Almendras said, adding the roadmap now needs only some fine tuning.
Some automakers, such as the local units of Japan’s Toyota Motor Corp. and Mitsubishi Motors, are waiting for the roadmap before they finalize expansion plans in the country.
“The passage of this roadmap is a big factor and crucial to the continued operation and future investment plans of Toyota in the Philippines,” said Rommel Gutierrez, a spokesman for Toyota Philippines and president of auto industry group CAMPI. (MNS)