After saying that the local auto parts industry is in survival mode, the Philippine Parts Makers Association (PPMA) is urging the government to step in and implement policies to help revive it.
Among those suggested by the PPMA is a local content requirement (LCR) which was rolled out in Indonesia. PPMA President Ferdi Raquelsantos emphasized that such a policy could strengthen domestic manufacturing, create jobs, and position the Philippines as a competitive player in the ASEAN automotive market.
“Indonesia’s local content policy has been a game-changer for its automotive sector. By requiring automakers to source a significant percentage of components locally, they’ve built a robust supply chain and attracted major global players. The Philippines can achieve similar success if we take decisive action now,” said Raquelsantos.
The PPMA proposes a phased implementation of the LCR, starting with a modest percentage and gradually increasing it over time. This approach would give manufacturers the flexibility to adapt while encouraging investments in local supply chains. Raquelsantos stressed that incentives are crucial to ensure compliance.
“To make this policy work, we need strong government support. Tax breaks, duty exemptions on raw materials, and grants for research and development can make it financially viable for automakers to source components locally. At the same time, we must provide technical and financial assistance to our SMEs to help them meet global standards,” he added.
Raquelsantos also highlighted the importance of workforce development in ensuring the policy’s success. “Our workers are the backbone of this industry. We need training programs in advanced manufacturing and robotics to equip them with the skills needed for modern automotive production. Collaboration with universities and technical schools will be key to building a skilled talent pipeline,” he said.
Infrastructure improvements are another critical factor. Raquelsantos called for the development of modern industrial parks with reliable utilities and enhanced logistics networks to reduce production costs and attract investors. “Streamlining customs procedures and reducing bureaucratic red tape will also make the Philippines a more attractive destination for automotive investment,” he noted.
The PPMA believes that a local content policy, combined with targeted incentives and infrastructure development, can transform the automotive industry into a major driver of economic growth. “This is not just about reviving an industry; it’s about creating thousands of jobs, boosting exports, and securing a brighter future for Filipino manufacturers. We have the potential to become a competitive player in the region, but we need to act now,” Raquelsantos concluded.
Perhaps the top 5 volume sellers maybe required to manufacture or assemble at least 1 nameplate locally. Also those selling eJeeps (PUVMP) must have more local parts for assembly. Admittedly this is easier said than done. Manufacturing cost is expensive and importing them is cheaper and more flexible to changes. But we have to start somewhere.
ReplyDeletethat requirement should come at least with more incentives. Current programs such as the CARS program is still too steep for other manufacturers to actually participate to
DeleteWell, that's not how the world would work if only the Philippine automotive industry have copied other countries like Egypt for example. And also, the monopoly of PH's carmaking business is dominated by Japan.
DeleteOnly the Japanese is fit to be the strongest to survive.
ReplyDeleteErr where did you get that idea? Nissan is merging with Honda to survive!
DeleteIn case if you are not aware, then in Kenya in East Africa for example, majority of cars there are Toyotas.
DeleteOther countries are already implementing similar law. We must have the same also. Byd diba sa press release number 1. So why not buy parts from ph kahit na door handles non tech if dami volume nila dito
ReplyDeleteGood luck with that. This only works for bigger markets, we don't have that kind of leverage. Some brands may even exit our market because of this.
ReplyDeleteSuzuki, Mazda, Subaru, Hyundai, Kia and others may try on leaving PH and thus have that market to be like South Korea, whose roads are not only populated by non-Japanese cars, but also Hyundais and Kias. And honestly, it goes by the fact that K-pop, K-dramas and Korean food are already gaining traction.
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