Amendments to Local Content and Export Rules in Auto Programs

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MEMORANDUM ORDER NO. 73: Amendments to Local Content and Export Rules in Auto Programs

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Title Supreme Court: Amendments to Local Content and Export Rules in Auto Programs

Law: Memorandum Order No. 73

Decision Date: Sep 12, 2002

President Gloria Macapagal-Arroyo's Memorandum Order No. 73 amends local content and foreign exchange requirements for the Car Development Program, Commercial Vehicle Development Program, and Motorcycle Development Program to comply with World Trade Organization agreements, phasing out local content mandates by July 2003.

administrative law

trade agreements

legal guidelines

A

Foreign Exchange Earnings and Import Requirements

Participants in the CDP, CVDP, and MDP are required to earn foreign exchange credits through exporting automotive products to qualify for importing Completely Knocked Down (CKD) units.
Net foreign exchange earnings must be recorded without bonus and are expressed as a ratio of CKD import value.
Foreign exchange ratio requirements vary across categories and time periods and are phased out by July 1, 2003.

Compliance with WTO Commitments and TRIMS Agreement

The amendments align with the Philippines’ commitments as a WTO member to eliminate local content and net foreign exchange earnings requirements, which are inconsistent with the Trade-Related Investment Measures (TRIMS) Agreement.
A phase-out schedule is established following approval from the WTO's Council for Trade in Goods to extend the applicability of TRIMS provisions.

Repealing Clause

All existing executive orders, administrative orders, rules, regulations, or parts that conflict with the provisions of this memorandum order are repealed or modified as necessary.

Effectivity

The memorandum order takes effect immediately upon issuance on September 12, 2002.
Executive authority is exercised by then-President Gloria Macapagal-Arroyo, with promulgation by Executive Secretary Alberto G. Romulo.

END