The promised generous tax and fiscal incentives for the motor vehicle industry should be incorporated in the proposed executive order for the new motor vehicle development program and should not only be addressed in EO’s implementing rules and guidelines.

This was the position of the legal counsel of the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) in light of a decision by the Board of Investments, which administers the MVDP, to address the incentives issue only in the IRG so as to avoid it from getting stymied.

But, according to the CAMPI lawyer the EO should be the basis for the IRG.
“It must have basis in the basic law because the IRG cannot supersede an EO,” a source said paraphrasing the CAMPI lawyer’s position.

In the first place, the BOI is also keeping secret the incentives that may be granted to investors under the new MVDP.

Industry players are just relying on the words of BOI executive director Efren Leano that there is more leeway for incentives under the MVDP compared to industries listed under the Investment Priorities Plan.

CAMPI members are also apprehensive that the proposed incentives by the Deloitte Consulting would be carried out in the IRG.

The Deloitte study has proposed a subsidy of $1,000 per completely built-up unit to encourage motor vehicle assembly in the country.

The $1,000 subsidy per vehicle represents the cost difference per CBU production between the Philippines and Thailand.

Under the proposed new MVDP, there will be two program levels. Level 1 involves the existing motor vehicle players. Level 2 is where most of the incentives are going to be provided. This involves full CKD operation with full benefits under the new program.. Incentives for level 2 participants shall be determined by the BOI.

The BOI is set to hold Wednesday a consultation with all government agencies involved in the motor vehicle industry. The BOI does not see any objection from the other government agencies unless their existing powers would be diluted under the new MVDP.

The government agencies' consultation would be followed with the drafting of an EO that would be presented for a public hearing prior to the coming up of a new MVDP.

The target is to avail of the December 17 to January 17 window when Congress is on recess to come up with an executive order for the new MVDP.