Industry incentives await approval by Malacañang

Two measures laying down investment incentives for various industries are now awaiting Malacañang approval, outgoing Trade Secretary Peter B. Favila said on Friday. Drafts of executive orders for the 2010 investment priority plan and a new program for motor vehicle development have been endorsed to President Gloria Macapagal-Arroyo, said Favila, who today will formally turn over his post to Jesli A. Lapus, who is moving from the Education department. Malacañang, through deputy spokesman Gary B. Olivar, could not immediately confirm receipt of the draft orders. "I’ve signed them. When I sign them, I immediately endorse them," Favila told reporters in Filipino on the sidelines of a sendoff party at the Trade department. "It is now going through legal scrubbing, legal review," he added. This year’s investment priority plan will again grant incentives to troubled firms that maintain or hire workers and also do not downscale, Board of Investments (BoI) Managing Head Elmer C. Hernandez said at the same event. Only companies in the export sector will be allowed to enjoy this perk, BoI special projects Director Rudy B. Cana said last week. The provision will last for as long as the National Economic and Development Authority does not declare the economic crisis to be over, Hernandez said, confirming earlier reports. Meanwhile, the new motor vehicle development program will exclude provisions in initial drafts that sought to ban the entry of imported second-hand car parts on top of an existing ban on imported used vehicles, Hernandez said. "I did not specify that (the ban on imported used car parts) in the new executive order," he said. The revision of the incentive scheme for motor vehicle assembly and sales provided under EO 156 comes as both the public and private sector brace for increased import competition this year. Tariffs on vehicles and automobile parts from member states of the Association of Southeast Asian Nations have been removed this year, and those slapped on Japanese imports will likewise be eliminated by 2013. The section covering regulations on second-hand imports just mirrors that of the old program under EO 156, Hernandez said, countering an industry group’s complaints that the new program is weaker in this area. This was done to avoid legal problems that might weaken the Supreme Court decision upholding the ban on imported used vehicles. Anyway, there are already existing policies that prohibit the entry of used parts and components, he said. The Chamber of Automotive Manufacturers of the Philippines, Inc. asked Malacañang last week to reject the new program, warning that regulating instead of prohibiting imported used engines would hurt the local industry. The draft executive order, presented to the public in February, also proposed the creation of a public-private Automotive Industry Development Council. It also provided, albeit vaguely, for the restructuring of excise taxes to favor locally assembled vehicles and models developed for Philippine mass transit.