Law Summary
Purpose and Objectives of the Program
- Aims to revitalize the Philippine automotive industry through strategic investments.
- Seeks to develop the country as a regional automotive manufacturing hub.
- Promotes innovation, technology transfer, environmental protection, and SME development.
Scope and Coverage
- Limited to manufacturing of three models of four-wheeled motor vehicles.
- Encompasses production of enrolled models, manufacture of body shell assemblies, large plastic assemblies, common and strategic parts, and shared testing facilities.
Key Definitions
- Defines critical terms such as Body Shell Assembly, Common Parts, Full Model Change, Large Plastic Parts, Logistics Efficiency Index, Model, Model Life, Nameplate, Parts, Planned Total Production Volume, Segment Weighted Average Price, Standard Production Support, and Strategic Parts.
BOI Functions
- Acts as the lead implementing and coordinating agency.
- Implements program policies, acts on committee recommendations, submits annual performance reports, coordinates government efforts, and exercises powers necessary for program success.
Inter-Agency Committee
- Comprises representatives from key government departments and councils.
- Functions include evaluating applications, recommending registrations, monitoring compliance and performance, preparing reports, and formulating policy recommendations.
Enrollment Criteria for Models
- Considers track record, investment levels, planned production volume (minimum 200,000 units over 6 years), economic impact, competitive environment, and compliance with emission and fuel standards.
Eligibility and Qualifications of Participants
- Car Makers must be internationally recognized with proven global track record and multinational operations.
- Parts Makers must be endorsed by Car Makers, OEM standard producers, members of the Philippine Parts Maker Association.
- Shared Testing Facilities must have collective endorsement and proven track records.
Application and Selection Process
- Managed by BOI with specific application periods.
- One model application per car maker per period; issuance of Certificate of Registration upon approval.
- Performance bond required for registration.
Fiscal Support Mechanisms
- Includes Fixed Investment Support (FIS) and Production Volume Incentive (PVI).
- Support based on new investments, parts delivery, market introduction, production thresholds, and other conditions.
- Calculations use defined metrics like Segment Weighted Average Price and Logistics Efficiency Index.
Automotive Development Fund (ADF)
- Proposed annual funding included in the General Appropriations Act.
- Total fiscal support capped at PHP 27 billion, with a maximum of PHP 9 billion per enrolled model.
- Fund allocation: 40% for FIS, 60% for PVI.
Budget and Appropriations
- DBM to include estimated expenditures to support the program annually until funds or obligations are exhausted.
Tax Payment Certificates (TPC)
- Non-transferrable certificates to defray tax obligations including excise tax, income tax, import duties, and VAT.
- Mechanism to be coordinated by BOI, DBM, and DOF.
Prohibition on Double Incentives
- Participation in this program precludes registration under other incentive programs for the same activity.
Monitoring, Compliance, and Penalties
- Subject to periodic audits for production volumes, parts importation, and compliance.
- Violation or failure to meet investment and delivery requirements can result in cancellation of registration, forfeiture of support, fines, or exclusion.
Implementing Rules and Regulations
- BOI, in coordination with other agencies, tasked to promulgate implementing rules and regulations.
Review of Related Policies
- Mandates review of existing automotive policies and incentive schemes within six months, considering regional and global developments.
- May propose transitional incentives for new entrants.
Repealing Clause
- Revokes conflicting orders, rules, or regulations.
Separability Clause
- Validity of other provisions remains if any part is declared unconstitutional.
Effectivity
- Effective immediately upon publication in a newspaper of general circulation.