PHILIPPINES APPROVES NEW CAR PROGRAMME
Philippines' Board of Investments (BOI)
has approved new guidelines on making cars but is still
awaiting rules on the tax component of the programme, trade and
industry secretary Jose Concepcion said.
    He said the authorities were still deciding how much tax
will be levied on locally-assembled cars.
    The new car development programme replaces an earlier
scheme and is designed to limit the number of car manufacturers
in the local market.
    The scheme is to be unveiled before the end of the month.
    The two accredited local car manufacturers are <Pilipinas
Nissan Inc>, which gets car kits from Nissan Motor Company Ltd
<NSAN.T> and <Philippine Automotive Manufacturing Corp> which
gets supplies from Mitsubishi Corp <MITT.T>.
    Three companies which pulled out due to what they saw as
poor market conditions were Ford Philippines, a subsidiary of
Ford Motor Co <F>, General Motors Pilipinas, a subsidiary of
General Motors Corp <GM> and <Delta Motors Corp>.
    Toyota Motor Corp <TOYO.T>, which was the foreign partner
of Delta Motors, has applied for a place in the new programme
and is negotiating the purchase of Delta's assembly plant.
    Concepcion declined to say how many car assemblers would be
allowed to operate, but said they will be required to finance
75 pct of the foreign exchange needed to import
completely-knocked-down kits.
    The balance will be provided by the central bank, he said.
    The trade minister, who is also chairman of the BOI, said
the programme is intended to develop a car parts industry by
requiring car firms to use locally-made spare parts. He said
the plan should keep car prices at "reasonable levels."
    Tax currently accounts for 40 pct of the total cost of a
car.
 REUTER
