Philippine auto and parts manufacturers urge government to boost industry

(Manila, Philippines, January 11, 2012) – Representatives of the domestic vehicle and parts manufacturing sector urge the government to work with them in creating a strategic expansion of the domestic market to achieve economies of scale and capture a significant share in the Association of Southeast Asian Nations (ASEAN) single market starting 2015.

“Auto and parts manufacturing in the Philippines is both viable and sustainable. An ambitious but realistic strategy can take it to the next level,” Feliciano Torres, chairman of the Philippine Automotive Competitiveness Council Inc. (PACCI), said.

“To achieve that, we must develop and sustain a public-private partnership (PPP) that creates reforms and public policies that support industry development and encourage investment,” Torres said.

Besides generating new jobs and providing substantial export revenues to support public spending, these policies, according to Torres, can eliminate uncertainty associated with regional supply chain disruptions.

He cites as an example the flooding in Thailand, a major auto production hub in the region. As a result of the flooding, parts manufacturers have been forced to slow or entirely suspend production, including parts for auto manufacturers in the Philippines. “We need to act quickly because there is huge opportunity to grow the domestic vehicle and parts sectors and create jobs,” Torres said.

In a 2010 study by Dr. Cid Terosa of the School of Economics of University of Asia and the Pacific, findings show that a “one-peso increase in consumption or investment spending for motor vehicles will result in 3.67 pesos worth of additional output in the economy.” In addition, a 100 billion-peso worth of investments in the domestic automotive manufacturing industry is estimated to generate at least 169,061 new jobs.

The study also revealed that the output multiplier of Philippine automotive manufacturing industry is greater than that of all the investment priority industries of the Department of Trade and Industry (DTI) – tourism, business process outsourcing and information technology services, electronics, mining, housing, and agribusiness.

PACCI members recognize that the barriers to investment and industry development are high, but they believe that they can be effectively addressed. “With renewed and strong government support, we are committed to do our part to invest in the Philippines and create tens of thousands of new jobs,” Torres said.

PACCI was established to support the domestic auto and auto parts manufacturing industries and increase their overall future competiveness. The group is composed of auto manufacturers Ford Motor Company Philippines, Honda Cars Philippines, Inc., Isuzu Philippines Corporation, Mitsubishi Motors Philippines Corporation, Toyota Motor Philippines Corporation, and parts maker Motor Vehicle Parts Manufacturing Association of the Philippines.

About the Philippine Automotive Competitiveness Council Inc.
The Philippines Automotive Competitiveness Council Inc. (PACCI) was established in March 2009 to provide a united voice to advocate for the automotive manufacturers and parts makers of the Philippines. PACCI aims to support the domestic auto and auto parts manufacturing industries and increase their overall future competiveness.