DTI to follow Tariff Commission's request to scrap vehicle safeguard bond
Updated on September 20 2023
Earlier this year, the Department of Trade and Industry (DTI) announced that they will implement a safeguard bond for vehicles made in certain countries. While some models were exempted, most of the imported vehicles sold here come from nations that are included in the bond.
Months have passed since its implementation with the Tariff Commission (TC) coming to the conclusion that it is no longer needed. Following that, the DTI said they will comply with the Commission's recommendation.
While it's good news for the consumer, the bond isn't totally scrapped just yet. Per the DTI, they said they will study the report first before they follow the TC's guidelines. But why did the TC recommend lifting the bond in the first place?
Following the agency's report, imported passenger cars and light commercial vehicles being brought in were relative to the volume of vehicles being assembled in the country. They also excluded the imported vehicles brought in by manufacturers engaged in local assemble, most notably Toyota Motor Corporation and Mitsubishi Motors Philippines.
However, there is one union that was “surprised” to hear the Tariff Commission's reversal of the decision, the Philippine Metalworkers Alliance (PMA). It was the PMA's petition that started the whole safeguard bond around the start of the year. For them, there is a causal link between the rise of imported vehicles and the harm done to local manufacturing. PMA Secretary General Rene Rasing says they are expecting a public hearing before the final decision is made.
While the fate of the safeguard bond hangs in the balance, it is a few steps closer to being lifted. While this doesn't affect used cars, it might let those thinking about buying a new car to go for it once it's no longer enforced. That means the local automotive market will have a continuous stream of new cars that will eventually trickle down to the second-hand market.