BOI gets flak for unclear car rules

Lawmakers blamed yesterday the Board of Investments (BOI) for failing to prescribe clear-cut rules to guide investors in the car manufacturing industry.

During a House ways and means committee hearing, Deputy Speaker Sharon Garin accused BOI of allegedly having a bias against non-Japanese assemblers and new players.

Representatives Lynda Bolilia of Batangas, Manuel Zubiri of Bukidnon and Rodel Batocabe of Ako Bicol warned the agency that unless it clarifies its rules on the implementation of the motor vehicle development program, the country would continue to lag behind its neighbors in automotive manufacturing.

The ways and means committee, chaired by Rep. Dakila Cua of Quirino, is looking into the reported cancellation by the BOI of the authority it granted Hyundai Asia Resources Inc. to participate in the program allegedly for failing to comply with certain requirements.

BOI officials led by Undersecretary Ceferino Rodolfo informed the committee that Hyundai “lacked painting and welding activities in its assembly plant” in Laguna.

They said such lack disqualified Hyundai from tax privileges the motor vehicle development program provides its participants to encourage them to assemble and eventually manufacture vehicles in the country.

Hyundai senior technical adviser Alex Cabrera said his company is operating under the BOI authority provided in Executive Order 877A, an amendment to EO 156, which governs the assembly of knocked down vehicles.

He said their assembly-related activities have been approved by the BOI.

Less than six months after Hyundai started operations, the BOI suspended their activities.

Garin said this was proof of BOI’s “animosity towards a newcomer but a willing investor.”

Such hostility “adversely affects the investment climate in the country,” she said.

“What you are doing is discouraging them from participating in the MVDP program. It is quite disappointing,” she said.

Cua ordered an ocular inspection of the Hyundai’s assembly plant in Sta. Rosa, Laguna to confirm whether or not BOI’s accusations against the company are accurate.

In the meantime, committee members urged the agency to clarify the rules governing the program.

“BOI’s investment policy should be corrective, not punitive. BOI seems too eager to impose the extreme penalty of license cancellation, but it should consider the welfare of Hyundai’s employees and their families, and the company’s investments,” Batocabe said.

Bolilia was surprised that BOI lacks even the most basic definitions of “completely knocked-down” and “knocked-down” vehicles, including the extent of painting and welding activities required for companies to qualify participants in the car development program.