Question & AnswerQ&A (EXECUTIVE ORDER No. 877)
The MVDP covers the manufacture and assembly of motor vehicles classified as: Classification I - Passenger Cars; Classification II - Commercial Vehicles; Classification III - Motorcycles; and Classification IV - Other Vehicle Assemblies. Production and assembly must be in knocked-down (KD) condition using brand-new OEM parts, subject to BOI limitations.
Entities organized under Philippine laws engaging in the manufacture and/or assembly of brand new motor vehicles, establishing or utilizing manufacturing/assembly facilities, and meeting technical licensing or supply agreement requirements, involving basic assembly processes, qualify as participants.
A new participant not previously registered under EO 156 must invest at least US$2 million within one year from registration in motorcycle assembly or in-house parts manufacturing, equity investment in parts manufacturing firms, or cost-sharing schemes, subject to BOI review and conditions.
Privileges include availing of tariff rates for KD parts and components under MVDP tariff lines, listing motor vehicle assembly and parts manufacturing in the annual Investments Priorities Plan for five years, and other benefits as allowed by the BOI.
Used vehicles allowed include those personally owned by returning residents under the No-Dollar Importation Program, vehicles for diplomatic officials, trucks with GVW over 2.5 tons, buses over 6 tons, special purpose vehicles (like fire trucks, ambulances), and motorcycles with DTI authority to import. Others are generally prohibited.
The Council oversees MVDP implementation, harmonizes policies, coordinates government efforts to develop the industry, promotes investment and technology development, fosters export competitiveness, and performs other related functions under the supervision of the Department of Trade and Industry.
Participants may be required to refund benefits received with interest and monetary penalties, and their registration under the program may be suspended or canceled after due notice.
Such officials may be expelled from office, including chief executive officers and responsible personnel, and are prohibited from holding government positions for at least two years, regardless of any contrary laws.
Importation of used motor vehicles into the customs territory is prohibited except for specified exemptions; unauthorized importation leads to seizure and mandatory re-exportation at the importer's expense.
The BOC must provide importation data on motor vehicles to the Department of Trade and Industry; the LTO must provide vehicle registration data and ensure emission standards compliance before registering imported vehicles.