Eco PUV may grab remaining slot in CARS
The Board of Investments (BOI) is toying the idea of getting the remaining third slot in the CARS, a $600-million car manufacturing incentives program, for the planned Eco PUV (public utility vehicle) Program that will be reserved for Filipino vehicle assemblers only.
The BOI’s Eco PUV Program is part of the government’s inter-agency PUV Modernization project, which seeks to modernize the old, dilapidated, and highly pollutant jeepneys. There are an estimated 200,000 jeepneys that need to be replaced. The PUV Modernization Project will be launched today, June 19, at Camp Aguinaldo with President Duterte expected to grace the occasion. The project is spearheaded by the DeThe partment of Transportation.
BOI Managing Head Ceferino S. Rodolfo said utilizing the unfilled CARS (Comprehensive Automotive Resurgence Strategy) slot has become an option as no other car company has taken up the slot after Japanese carmakers Mitsubishi Motors Philippines Corp. and Toyota Motor Philippines Corp.
While the CARS is an option, Rodolfo said the planned Eco PUV Program may not have the same elements as the CARS in terms of tax incentives for fixed and variable investments.
It may not be required the exact production volume requirement of 200,000 units over a six-year period as stipulated in the BOI contract with its CARS program participants.
But like the CARS, the Eco-PUV participants must also have a specific timeframe.
Unlike the CARS, which is led by foreign car brands, the Eco PUV program will be strictly reserved for Filipino motor vehicle assemblers only as it will be designed with the Filipino iconic jeepney in mind although with modern amenities.
It will be driven by Filipino motor vehicle manufacturers, he said.
But Rodolfo also hinted that major manufacturing facilities for the Eco PUV, like the painting facility may be taken up by foreign partners and may be eligible for incentives.
The CARS Program dangles $600 million tax incentives for three participants where each is required to produce 200,000 units for their approved model over a six-year period. Since there are only two CARS participants, there is still the remaining untapped budget under the program.
Already the Department of Finance said the government’s PUV modernization project could cost around P417.2 billion. The DOF said the project will be mainly funded by the Land Bank of the Philippines and Development Bank of the Philippines (DBP).
Since it is an inter-agency program, the BOI will be in charge of accrediting the local participants which requirements may include track record, access to technology from supplier for major parts such as power train, body, peripherals and GPS, among others.