MANILA — Local automotive parts manufacturers are urging the Philippine government to impose a 30% mandatory local sourcing requirement for vehicles assembled in the country.
In a statement on Tuesday, Ferdi Raquelsantos, president of the Philippine Parts Makers Association (PPMA), suggested that vehicle assemblers meeting this local content requirement could receive tax incentives. This move would boost local auto parts production and attract up to USD 500 million in fresh investments, creating around 50,000 additional jobs in the sector.
Raquelsantos emphasized that enforcing a robust local content rule would reduce the country’s reliance on imports, generating significant savings. It is estimated that increasing local sourcing could cut the auto parts import bill by USD 2.5 billion annually.
At present, vehicle assemblers in the Philippines source only 20% of their parts locally, compared to Vietnam’s policy of 40-50% domestic content. In contrast, the local auto parts industry already contributes about USD 1.2 billion to the economy.
“We have the talent, technology, and capabilities. What’s missing is a clear policy framework that incentivizes local sourcing and helps manufacturers meet global standards,” Raquelsantos added.
This push for increased local content aims to create a sustainable, self-reliant ecosystem for the auto parts industry in the Philippines.
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