Earlier this year, the Department of Trade and Industry (DTI) implemented a safeguard duty to imported cars and light commercial vehicles (which also includes pickup trucks, SUVs). The DTI’s safeguard measures were in the form of cash bonds amounting to P70,000/unit for imported passenger cars and P110,000/unit for imported LCVs, and this has led to most automakers increasing the retail prices of their imported vehicles.
However, on August 6, 2021, Trade and Industry Secretary Ramon M. Lopez has signed an order to stop the imposition of the DTI’s safeguard duty on imported vehicles.
But in order to understand why this was implemented in the first place, we have to go back to January 2021. The DTI’s safeguard duty on imported vehicles was a response to a petition filed by the Philippine Metalworkers Alliance (PMA) when they claimed that increased importation of passenger cars and light commercial vehicles “is a substantial cause of serious injury to the domestic motor vehicle manufacturing industry”.
The Tariff Commission (TC), however, determined that there is “no surge” in the importation of passenger cars and LCVs reversing the preliminary determination of the DTI according to Manila Bulletin. Lopez expects the order to be published within this week.
Once the order has been published, this will be forwarded to the Department of Finance which will then order the Bureau of Customs to stop the implementation of the DTI’s safeguard measures. The cash bonds will be then returned to the automakers and it will be up to them on how they will implement the refund process. The entire process should take about a week or two.
The automotive industry has suffered greatly from the COVID-19 pandemic. The decision to stop the imposition of the DTI’s safeguard measures on imported cars, which actually make up a majority of vehicles sold in the Philippines, will surely put the industry back on its way to recovery.