June 02, 2015

Incentives package for car manufacturers approved

As reported by several dailies today, President Benigno Aquino, Jr has signed a new program aimed at creating new investments in car parts manufacturing and production. The six-year program, referred to as the Comprehensive Automotive Resurgence Strategy (CARS) program, is a product of discussions between the Department of Trade and Industry (DTI) and the auto industry.

Under the plan, the government will provide an average of P4.5b worth of incentives annually for six years to support the manufacturing of three vehicle models. The DTI said the CARS’ package includes time-bound and performance-based fiscal incentives to support new investments in fixed capital expenditures in new parts-making capability and to encourage large-scale production in vehicle assembly.

The government estimates the program would draw P27b in fresh investments, manufacture 600,000 more vehicles, generate 200,000 direct and indirect jobs and add P300b to the domestic economy, equivalent to 1.7% of GDP. The Executive Order (EO) on CARS Program will take effect 15 days after its public publication. Upon effectivity, the CARS Program will supersede the existing Motor Vehicle Development Program under EO 156. - WealthSec