DTI taps JICA for auto industry study

MANILA, Philippines - The Department of Trade and Industry (DTI) has inked a technical agreement project with the Japan International Cooperation Agency (JICA) for a joint study on the Philippine automotive industry.

The two-year technical cooperation project titled “Elaboration of Industrial Promotion Plans Using Value Chain Analysis” will identify how the country can position itself in the global value chain as well as recommend industrial promotion and action plans for the country’s automotive, auto parts and auto electronics sectors.

“As a strong driver for economic growth and job creation, the automotive industry has substantial multiplier effects on knowledge transfer and linkages creation within the domestic economy.  Our goal is to deepen our participation in global value chains to spur foreign and domestic investments and generate more employment,” Trade Undersecretary Ceferino Rodolfo said.

Rodolfo said the study, once completed, would be incorporated in the country’s manufacturing industry roadmap.

“The DTI-JICA project complements the country’s Comprehensive Automotive Resurgence Strategy (CARS) program. Through CARS, we intend to become a full participant in the value chain of automotive manufacturing in the region,” he said.

Signed into law by President Aquino in May last year, the CARS program provides fiscal support for investments in the manufacture of whole body large plastic parts, other strategic parts that are not currently produced locally, and provides variable incentives to induce both volume production and logistics efficiency.

The CARS program targets to generate 200,000 new jobs, bring in fresh investments worth $1.2 billion, stimulate local demand by increasing vehicle sales to $9.2 billion, and effectively implement industry regulations that would revitalize the Philippine automotive industry.

The program is anchored on the resurgence of the automotive manufacturing industry and in priming the country as a regional automotive manufacturing hub.

Toyota Motor Philippines Corp. and Mitsubishi Motors Philippines Corp. have submitted their applications to the Board of Investments to participate in the CARS program.a

The Philippines is expected to become a major automotive market in Southeast Asia by 2020 as domestic sales are forecast to reach 500,000 units while local production is seen ramping up with the government’s CARS program.