Local manufacturers of automotive parts are proposing a 30-percent mandatory domestic sourcing for vehicles assembled in the country.
In a statement Tuesday, Philippine Parts Makers Association (PPMA) president Ferdi Raquelsantos said the government could provide tax perks for vehicle assemblers that will comply with the minimum requirement for local sourcing to boost the production of auto parts makers.
Sourcing the auto parts from local manufacturers could attract fresh investments of USD500 million and create additional 50,000 jobs in the auto parts manufacturing sector, Raquelsantos said.
“By implementing a robust local content rule, we can create a sustainable ecosystem for our parts manufacturers, generate employment, and reduce our reliance on imports,” he said.
Increasing the local auto parts sourcing would translate to an import substitution of USD2.5 billion. Currently, the amount is the country’s auto parts’ import bill annually, he added.
Raquelsantos said the current level of local sourcing of vehicle assemblers stood at 20 percent, below Vietnam’s policy of 40 to 50 percent domestic content for vehicle production.
Auto parts makers also contribute around USD1.2 billion to the economy.
“We have the talent, the technology, and the capability. What we need is a clear policy framework that incentivizes automakers to source locally and supports our manufacturers in meeting global standards,” Raquelsantos said. (PNA)
