(NAR) VOL. 7 NO. 1 / JANUARY-MARCH 1996
WHEREAS, on December 1, 1987, Memorandum
Order No. 136 was issued promulgating the Guidelines on the Car
Development Program (CDP);
WHEREAS, on February 9,
1988, Memorandum Order No. 157 was issued promulgating the Guidelines on
the Commercial Vehicle Development Program
(CVDP);
WHEREAS, on February 29, 1988, Memorandum
Order No. 160 was issued promulgating the Guidelines on the Motorcycle
Development Program (MDP);
WHEREAS, Section 14 of
M.O. 136 (s. of 1987), Section 14 of M.O. 157 (s. of 1988), and Section
14 of M.O. 160 (s. of 1988) provide that the Board of Investments, after
consultation with the industry, may recommend to the President
amendments to the Guidelines on the CDP, CVDP, and MDP, taking into
account the attainment of program objectives, economic conditions, and
local manufacturing capabilities;
WHEREAS, there is a
need to increase exports of automotive parts and components in order to
develop a viable automotive parts manufacturing industry, which is the
common and primordial objective of the CDP, CVDP, and the
MDP;
WHEREAS, there is a need to support accelerated
rural development by providing suitable means for the transport of
goods, services and passengers;
WHEREAS, there is a
need to encourage and assist the development of the non-formal
automotive industry in areas of safety, roadworthiness, and compliance
with emission standards:
NOW, THEREFORE, I, FIDEL V.
RAMOS, President of the Philippines, do hereby promulgate the following
amendments to the Guidelines on the Car Development Program (CDP); the
Commercial Vehicle Development Program (CVDP); and the Motorcycle
Development Program (MDP),
Chapter
I
The Car Development
Program
SECTION 1.
Objectives. —
1.1 The development of a
viable automotive parts manufacturing industry shall remain as the
primary objective of the Program, economies of scale of which can be
achieved by increased exports.
1.2 The capability of
the assemblers to offer more reasonably-priced passenger cars to the
middle-income group shall be given more
weight.
SECTION 2.
Definition of
Terms. —
2.1 The definition of SKDs and
CKDs appearing in M.O. 136 (s. of 1987) are hereby modified as
follows:
2.1.1 SKDs are semi-knocked down
parts and components for assembly purposes that are imported in
partially-assembled condition. SKDs include semi-assembled vehicles and
cars without tires and batteries, and when authorized by the Board of
Investments for importation in such a state, shall be considered as SKDs
and shall be treated for tariff purposes as
CKDs.
2.1.2 CKDs are completely knocked-down parts
and components for assembly purposes that are imported in disassembled
condition. The CKD pack, however, may include not only parts and
components but also sub-assemblies and assemblies, e.g., engine,
transmission axle assemblies, chassis and body
assemblies.
2.2 KD parts are parts forming
part of the CKD pack that may have been left out of the CKD importation.
They may also be warranty parts (replacement of defective parts) or
part of the CKD minus the components that are to be locally
sourced.
SECTION 3.
Implementing
Agency. — The Department of Trade and Industry (DTI), through
the Board of Investments (BOI), will continue to be the agency
responsible for carrying out the effective implementation of this
Program. The BOI may, however, after consultation with concerned
parties, form, designate, or deputize another body, committee, or
company to perform some of the tasks involved in effectively pursuing
some of the functions, or monitoring certain aspects of the Program in
accordance with existing Government rules and
regulations.
SECTION 4.
Participants. —
4.1 Aside from applications
for participation in Category III of the CDP [M.O. 68 (s. of 1992)],
applications for participation in Categories I and II, which categories
were previously closed, shall be accepted by BOI from Filipino-owned and
foreign-owned companies organized under Philippine laws provided that
the applicant will be able to obtain a technical licensing agreement
with the foreign CKD supplier; that it will assemble established quality
passenger cars; that it will provide adequate parts and support
services; and, provided further, that the participant qualifies under
the CDP rules and regulations. The BOI shall decide on the accepted
applications within sixty (60) working days from date of official
application thereof.
4.2 A new participant in the CDP
is one who is neither a participant in CDP Categories I, II or III on
the date of approval of these supplemental guidelines. The new
participant in the CDP shall possess the following
qualifications:
4.2.1 Capability to invest
and/or bring in investments equivalent to US$10 million in the
manufacture of motor vehicle parts and components for the exports and
domestic markets.
4.2.2 Ability to establish a new
assembly facility or utilize an existing assembly facility which is
either idle or in operation.
4.2.3 Capability to post
a performance bond or bank guaranty to ensure the fulfillment of the
commitments that it shall make on the establishment of a major
automotive parts manufacturing facility in accordance with its
participation in the Program. Such bond or guaranty shall be
proportionally reduced upon presentation of proof of investments in
plant build-up, excluding land.
SECTION
5.
Coverage. —
5.1 The CDP shall
have the following categories, based on engine
displacement:
Category I — With engine
displacement of 1,200 cc or below and with a reasonable price ceiling as
determined by the Board. A car with a larger engine displacement may be
allowed, PROVIDED, that its selling price shall be in accordance with
the price ceilings established for the
category.
Category II — Above 1200 cc but
below 2190 cc
Category III — 2190 cc and
above (Note: Equivalent diesel engine displacement will be
allowed.)
5.2 The BOI may re-classify
participating models under Category I with engine displacement greater
than 1200 cc to Category II of the CDP provided that a replacement model
with engine displacement of 1200 cc or below is registered under
Category I in its place. The latter will then be governed by the terms
and conditions of the participant's original registration under Category
I. Similarly, assemblers with car models with engine displacement of
2190 and above now registered under Category II may have the option to
retain their registration under Category II or transfer the same to
Category III of the CDP, continued participation of which will be
covered by the provisions of M.O. 68 (s. of
1992).
5.3 New participants in Category I, II and III
of the Car Development Program (CDP) intending to sell their units only
to the domestic market may no longer be granted privilege to import
semi-knocked down units (SKDs) while their assembly facilities are being
set up. On the other hand, new participants in the Program which will
export at least fifty percent (50%) of their CBU car production (70% in
the case of foreign companies) may be authorized to import SKD units for
the local market portion of their operations as incentive for setting
up in the Philippines their CBU production platform for their car
exports in the region. The BOI may initially grant the SKD privilege for
a period of six (6) months and extend the same for another six (6)
months after the proponent has shown proof that it is pursuing its CKD
assembly operations in accordance with the project
timetable.
5.4 Anticipating the advent of electric
(battery-operated) cars, and other non-conventional-energy type of cars,
the CDP shall cover the same. The BOI shall, at the appropriate time,
formulate guidelines for the participation of such cars in the
CDP.
5.5 Importation of brand-new completely built-up
(CBU) passenger cars shall now be allowed in line with Executive Order
No. 264, S. 95 and Monetary Board Circular No. 92, S. 95. The Monetary
Board shall issue a Memorandum to Authorize Agent Banks defining "new"
and the processes involved.
SECTION 6.
Models and Variants. — There shall be no limitation in the
number of models and variants provided that the same are registered with
the BOI.
SECTION 7.
Local
Content. —
7.1 Participants in the Program,
except those in Category III, shall no longer be required to comply
with a vehicle local content higher than forty percent (40%) to
qualify/remain in the CDP.
However, the BOI may grant
a foreign exchange award amounting to fifty percent (50%) of foreign
exchange earned during the previous year, to a participant in Categories
I and II who has attained a weighted local content average of at least
50% of all its participating models and variants. The BOI shall issue
guidelines for the grant of the foreign exchange award to qualified
participants, which shall become executory fifteen (15) days after
publication.
7.2 In order to pursue the primary
objective of the Program, which is the development of a viable local
automotive parts manufacturing industry, and to assist assemblers in
achieving the required local content requirement, the BOI may adopt
policies that will encourage continuing purchase by automotive
assemblers and the unhampered supply by the autoparts manufacturers of
automotive parts and components at competitive prices and
quality.
7.3 For purposes of determination and/or
audit of the local content attainment of an assembler for any particular
model/variant, the BOI may, in consultation with concerned parties,
designate or deputize the Technical Review Committee to undertake the
work unless circumstances warrant the formation/designation/deputization
of another body, committee or company for the purpose. The BOI shall
prepare the Terms of Reference for the work to be undertaken by the said
body.
7.4 The BOI may no longer use a mandatory
deletion list in pursuing the Program's
objectives.
7.5 The local content requirement under
the program shall be terminated by the year 2000 based on the Agreement
on Trade-Related Aspects of Investment Measures under the General
Agreement on Tariff and Trade (GATT).
SECTION
8.
Joint-Venture Projects. — The BOI, in recognition
of the technology transfer that results from joint ventures, may grant a
foreign exchange concession to new joint-venture car assembly
operations which shall be set up under the amended guidelines amounting
to ten percent (10%) of the net foreign exchange earnings (NFEE)
required during the first two (2) years of operation of such new
joint-venture companies, provided that the local equity thereof shall be
at least thirty percent (30%). Similarly, new or existing participants
who shall promote joint ventures between their parts vendors and local
autoparts manufacturers shall be granted additional foreign exchange
concessions amounting to ten percent (10%) of the net foreign exchange
earnings (NFEE) of the parts manufacturing joint-venture during its
first two (2) years of operation, provided that the local equity thereof
shall be at least thirty percent (30%).
SECTION
9.
CKD and CBU Prices. — The BOI shall continue to
monitor the retail prices of participating models and variants. For the
purpose of determining reasonable prices, the BOI may review the price
composition of certain models and ask the assemblers for necessary
documentation.
SECTION 10.
Foreign Exchange
Requirements. —
10.1 Participants in
Categories I, II and III will still be required to earn foreign exchange
credits through the export of automotive products to be able to import
CKDs. The net foreign exchange earnings shall be recorded in the ledger
without bonus.
10.2 The foreign exchange ratio (as a
percentage of CKD import value) for Category I participants will be
similar to CVDP Categories I and II,
i.e.:
1995 —
5.0%
1996 —
5.0%
1997 —
7.5%
1998 —
7.5%
1999 —
15.0%
2000 —
15.0%
10.3 The foreign exchange ratio (as a
percentage of CKD import value) for Category II participants will be as
follows:
1995 —
40%
1996 —
45%
1997 —
45%
1998 —
50%
1999 —
50%
2000 —
55%
10.4 Participants in Category III, as well as AUV
participants, will be required to earn seventy-five percent (75%) of
their foreign exchange requirements for the importation of
CKDs.
10.5 For purposes of determining and/or
auditing the net foreign exchange of exports promoted by an assembler
during any particular period and other related technical matters, the
BOI may, in consultation with concerned parties, designate or deputize
the Technical Review Committee to undertake the work unless
circumstances warrant the formation/ designation/deputization of another
body, committee or company for the purpose. The BOI shall prepare the
Terms of Reference for such net foreign exchange determination, review
and/or verification.
10.6 In view of the foreign
exchange liberalization, Sec. 9.4 of M.O. 136 (s. of 1987) is hereby
deemed superseded/revoked.
10.7 The BOI shall
continue to issue Certificates of Authority to Import to allow the
participants to import their CKD requirements and to avail themselves of
the three percent (3%) duty under E. O. 264, series of
1995.
10.8 The foreign content requirement under the
program shall be terminated by the year 2000 based on the Agreement on
Trade-Related Aspects of Investment Measures under the General
Agreements on Tariff and Trade
(GATT).
Chapter
II
The Commercial Vehicle Development Program
(CVDP)
SECTION 11.
Objectives. —
11.1 Aside from the
objectives indicated in M.O. 157 (S. of 1988), the CVDP shall aim to
support accelerated rural development by providing suitable and
affordable means for the transport of goods, services and
passengers.
11.2 The CVDP shall likewise encourage
and assist the development of the non-formal automotive industry in
terms of safety, roadworthiness, and compliance with emission
standards.
SECTION 12.
Definition of
Terms. —
12.1 Asian Utility Vehicle (AUV) —
Aside from the definition appearing in Section 2 of M.O. 157 (s. of
1988), AUV body parts should now be locally pressed or a major
component, such as the transmission or engine should be locally
manufactured.
12.2 CKD and KD definitions are the
same as the CDP definitions in Section 2
hereof.
SECTION 13.
Participants. —
13.1 The
informal sector will be integrated under the CVDP. Specific guidelines
will be formulated by the BOI.
13.2 Aside from
applications for participation in Categories I, III, and IV;
applications for participation in Categories II (previously closed) and V
(created under Sec. 14.1 hereof) shall be accepted by BOI from
Filipino-owned and foreign-owned companies organized under Philippine
laws provided that the applicant will be able to obtain a technical
licensing agreement with the foreign CKD supplier; that it will assemble
established quality vehicles; that it will provide adequate parts and
support services; and provided further, that the participants qualifies
under the CVDP rules and regulations. The BOI shall decide on the
accepted applications within sixty (60) working days from date of
official filing thereof.
13.3 A new participant in
the CVDP is one who is neither a participant in CVDP Categories I, II,
III or IV on the date of approval of these supplemental guidelines. The
new participant in the CVDP shall have the following
qualifications:
13.3.1 Capability
to invest and/or bring in investments equivalent to US$8 million in the
manufacture of motor vehicle parts and components for the export and
domestic markets.
13.3.2 Ability to
establish a new assembly facility or utilize an existing assembly
facility which is either idle or in
operation.
13.3.3 Capability to post a
performance bond or bank guaranty to ensure the fulfillment of the
commitments that it shall make on the establishment of a major
automotive parts manufacturing facility in accordance with its
participation in the Program. Such bond or guaranty shall be
proportionally reduced upon presentation of proof of investments in
plant build-up, excluding land.
13.3.4
Specific qualifications of the informal sector will be determined by the
BOI.
13.4 Participation in the CVDP shall
no longer require the concurrence of the President in view of the
program liberalization.
SECTION 14.
Coverage. —
14.1 Aside from Categories I to
IV as appearing in M.O. 157 (s. of 1988), Category V shall be created
and this shall cover trucks with gross vehicle weight greater than 18
tons and Special-Purpose Vehicles, such as fire
trucks.
14.2 In addition to the liberalization on the
importation of brand new CBU trucks and buses, brand new CBU Light
Commercial Vehicles (LCVs) and Asian Utility Vehicles (AUVs) shall now
be allowed to be imported in line with Executive Order No. 264, S. 95
and Monetary Board Circular No. 92, S. 95. The Monetary Board shall
issue a Memorandum to Authorize Agent Banks defining "new" and the
processes involved.
SECTION 15
. Models and
Variants. — There shall no limitation in the number of models
and variants provided that the same are registered with the BOI. The
retail price ceilings of CVDP models shall continue to be monitored by
the BOI.
SECTION 16
. Local
Content. —
16.1 Participants in Categories I
and II shall no longer be required to comply with a vehicle local
content higher than forty-five percent (45%) to qualify/remain in the
CVDP. However, the BOI may grant a foreign exchange award amounting to
fifty percent (50%) of foreign exchange earned during the previous year,
to a participant who has attained a weighted local content average of
at least fifty-five (55%) of all its participating models and variants.
The BOI shall issue guidelines for the grant of foreign exchange award
to qualified participants, which shall become executory fifteen (15)
days after publication.
16.2 In order to pursue the
primary objective of the Program, which is the development of a viable
local automotive parts manufacturing industry, and to assist assemblers
in achieving the required local content requirement, the BOI may adopt
policies that will encourage continuing purchase by automotive
assemblers and the unhampered supply by the autoparts manufacturers of
automotive parts and components at competitive prices and
quality.
16.3 For purposes of determination and/or
auditing local content attainment of an assembler for any particular
model/variant, the BOI, in consultation with concerned sectors, may
designate/deputize the TECHNICAL REVIEW COMMITTEE for the determination
and audit of the local content attainment of participants in the CDP
unless circumstances warrant the designation/deputization of another
body, committee or company for the purpose. The same Terms of Reference
used in the CDP audit, if applicable, may be used in the CVDP audit, and
the same rules, regulations and guidelines where applicable, may
likewise be used in the CVDP local content determination and
audit.
16.4 Participants in Categories III and IV
shall continue to comply with the minimum local content requirement
specified for year 3 under M.O. 157 (s. of 1988). New participants in
Category V shall comply with the minimum local content specified for the
truck unit to be used based on its GVW. The local content of trucks
greater than 18 tons GVW shall be the same as the local content of
Category IV-D of the CVDP.
16.5 The BOI may no longer
use a mandatory deletion list in pursuing the Program's
objectives.
16.6 The local content requirement under
the program shall be terminated by the year 2000 based on the Agreement
on Trade-Related Aspects of Investment Measures under the General
Agreements on Tariff and Trade (GATT).
SECTION
17
. Joint-Venture Projects. —
17.1
The BOI, in recognition of the technology transfer that results from
joint ventures, may grant a foreign exchange concession to new
joint-venture commercial vehicle assembly operations which shall be set
up under the amended guidelines amounting to ten percent (10%) of the
net foreign exchange earnings (NFEE) required during the first two (2)
years of operation or such new joint-venture companies, provided that
the local equity thereof shall be at least thirty percent (30%).
Similarly, new or existing participants who shall promote joint ventures
between their parts vendors and local autoparts manufacturers shall be
granted additional foreign exchange concessions amounting to ten percent
(10%) of the net foreign exchange earnings (NFEE) of the parts
manufacturing joint-venture during its first two (2) years of operation,
provided that the local equity thereof shall be at least
(30%).
SECTION 18.
CKD and CBU
Prices. — The BOI shall continue to monitor the retail prices
of participating models and variants. For the purpose of determining
reasonable prices, the BOI may review the price composition of certain
models and ask the assemblers for necessary
documentation.
SECTION 19.
Foreign Exchange
Requirement. —
19.1 Participants in
Categories I and II will still be required to earn foreign exchange
credits through the export of automotive products to be able to import
CKDs. Their net foreign exchange earnings shall be recorded in the
ledger without bonus and the foreign exchange ratio (as a percentage of
CKD import value) shall be as
follows:
1995 —
5.0%
1996 —
5.0%
1997 —
7.5%
1998 —
7.5%
1995 —
15.0%
2000 —
15.0%
Participants in Categories III, IV and V will
likewise still be required to earn foreign exchange credits to be able
to import CKDs and their foreign exchange earnings shall likewise be
recorded in the ledger without bonus; the required foreign exchange
ratio (as a percentage of CKD import value) shall be five percent
(5%).
19.2 For purposes of determining and/or
auditing the net foreign exchange of exports promoted by an assembler
during any particular period and other related technical matters, the
BOI, in consultation with concerned sectors, may designate/deputize the
Technical Review Committee for the determination and audit of the net
foreign exchange attainment of the participants in the CDP unless
circumstances warrant the designation/deputization of another body,
committee or company for the purpose. The same Terms of Reference used
in the CDP audit, if applicable, may be used in the CVDP audit, and the
same rules, regulations and guidelines, where applicable, may likewise
be used in the CVDP net foreign exchange determination and
audit.
19.3 The BOI shall continue to issue
Certificates of Authority to Import to allow the participants to import
their CKD requirements and to avail themselves of the 3% duty under E.O.
264, series of 1995.
19.4 The foreign content
requirement under the program shall be terminated by the year 2000 based
on the Agreement on Trade-Related Aspects of Investment Measures under
the General Agreements on Tariff and Trade
(GATT).
Chapter
III
The Motorcycle Development
Program
SECTION 20.
Objectives. — Aside from the objectives enumerated
in M.O. 160 (s. of 1988), the MDP shall support accelerated rural
development by providing cheaper alternative transportation units for
goods, services and passengers in rural
areas.
SECTION 21.
Participants.
—
21.1 Aside from applications for participation in
Category B, applications for participation in Category A (previously
closed) shall be accepted by BOI from Filipino-owned and foreign-owned
companies organized under Philippine laws provided that the applicant
will be able to obtain a technical licensing agreement with the foreign
CKD supplier; that it will assemble established quality vehicles; that
it will provide adequate parts and support services; and provided
further, that the participant qualifies under MDP rules and regulations.
The BOI shall decide on the accepted applications within sixty (60)
working days from date of official application
thereof.
21.2 A new participant in the MDP is one who
is neither a participant in MDP Categories A and/or B on the date of
approval of these supplemental guidelines. The new participant in the
MDP shall have the following
qualifications:
21.2.1 Capability
to invest and/or bring in investments equivalent to US$2 million in the
manufacture of motor vehicle parts and components for the export and
domestic markets.
21.2.2 Ability to
establish a new assembly facility or utilize an existing assembly
facility which is either idle or in
operation.
21.2.3 Capability to post a
performance bond or bank guaranty to ensure the fulfillment of the
commitments that it shall make on the establishment of a major
automotive part manufacturing facility in accordance with its
participation in the Program. Such bond or guaranty shall be
proportionally reduced upon presentation of proof of investments in plan
build-up, excluding land.
SECTION
22.
Coverage. — Importation of brand new motorcycles
shall now be allowed in line with Executive Order No. 264, S. 95, and
Monetary Board Circular No. 92, S. 95. The Monetary Board shall issue a
Memorandum to Authorize Agent Banks defining "new" and the processes
involved.
SECTION 23.
Models and
Variants. — While there shall be no limitation in the number
of models and variants, the same shall be registered with the BOI and
their prices continued to be monitored by the
Board.
SECTION 24.
Local Content.
—
24.1 Participation in Category A shall no longer be
required to comply with a vehicle local content higher than forty-five
percent (45%) to remain in the MDP; those in Category B shall be
required to attain local content of thirty, five percent (35%). However,
the BOI may grant a foreign exchange award amounting to fifty percent
(50%) of foreign exchange earned during the previous year, to a
participant who has attained a weighted local content average of at
least fifty-five percent (55%) of all its participating models and
variants. The BOI shall issue guidelines for the grant of foreign
exchange award to qualified participants, which shall become executory
fifteen (15) days after publication.
24.2 In order to
pursue the primary objective of the Program, which is the development
of a viable local automotive parts manufacturing industry, and to assist
assembler in achieving the required local content requirement, the BOI
may adopt policies that will encourage continuing purchase by automotive
assemblers and the unhampered supply by the autoparts manufacturers of
automotive parts and components at competitive prices and
quality.
24.3 For purposes of determination and/or
audit of local content attainment of an assembler during any particular
period, the BOI, in consultation with concerned sectors, may
designate/deputize the TECHNICAL REVIEW COMMITTEE for the audit of the
CDP/CVDP local content attainment unless circumstances warrant the
designation/deputization of another body, committee or company for the
purpose. The same Terms of Reference used in the CDP/CVDP local content
determination and audit, if applicable, may be used in the MDP audit,
and the same rules, regulations and guidelines where applicable, may
likewise be used in the MDP local content determination and
audit.
24.4 The local content requirement under the
program shall be terminated by the year 2000 based on the Agreement on
Trade-Related Aspects of Investment Measures under the General
Agreements on Tariff and Trade (GATT).
SECTION
25.
Joint-Venture Projects. — The BOI, in recognition
of the technology transfer that results from joint ventures, may grant a
foreign exchange concession to new joint-venture motorcycle assembly
operations which shall be set up under the amended guidelines amounting
to ten percent (10%) of the net foreign exchange earnings (NFEE)
required during the first (2) years of operation of such new
joint-venture companies, provided that the local equity thereof shall be
at least thirty percent (30%). Similarly, new or existing participants
who shall promote joint ventures between their parts vendors and local
autoparts manufacturers shall be granted additional foreign exchange
concessions amounting to ten percent (10%) of the net foreign exchange
earnings (NFEE) of the parts manufacturing joint-venture during its
first two (2) years of operation, provided that the local equity thereof
shall be at least thirty percent (30%).
SECTION 26.
Foreign Exchange Requirement.
—
26.1 Participants will still be required to earn
foreign exchange credits through the exports of automotive products to
be able to import CKDs. Their net foreign exchange earnings shall be
recorded in the ledger without bonus and the foreign exchange ratio (as a
percentage of CKD import value) shall be as
follows:
1995 —
5.0%
1996 —
5.0%
1997 —
7.5%
1998 —
7.5%
1999 —
15.0%
2000 —
15.0%
26.2 For purposes of determining and/or
auditing the net foreign exchange of exports promoted by an assembler
during any particular period and other related technical matters, the
BOI, in consultation with concerned sectors, may designate/deputize the
Technical Review Committee for the determination and audit of the
CDP/CVDP net foreign earnings unless circumstances warrant the
designation/deputization of another body, committee or company for the
purpose. The same Terms of Reference for the determination/audit of the
CDP/CVDP net foreign exchange earnings if applicable, may be used in the
MDP audit, and the same rules and regulations, where applicable, may
likewise be used in the MDP net foreign exchange determination and
audit.
26.3 The BOI shall continue to issue
Certificates of Authority to Import to allow the participants to import
their CKD requirements and to avail themselves of the three percent (3%)
duty under E.O. 264, series of 1995.
26.4 The
foreign content requirement under the program shall be terminated by the
year 2000 based on the Agreement on Trade Related Aspects of Investment
Measures under the General Agreements on Tariff and Trade
(GATT).
Chapter
IV
Other
Provisions
SECTION 27.
Technical Review Committee. — The Review Committees formed for
the Car, Commercial Vehicle and Motorcycle Development Programs shall
be consolidated into consultative body composed of representatives of
the dominant association representing the motor vehicle assemblers and
parts manufacturers and the BOI/DTI, with the Managing Head of the BOI
or his representative as Chairman. The said body may be deputized by the
BOI to undertake functions relative to its task of overseeing the
various motor vehicle development programs. The Committee is also tasked
to formulate and recommend to the BOI and to the Inter-Agency Committee
on Used Trucks measures to require importers of used trucks and buses
to comply with safety, roadworthiness, and emission standards. The said
Committee may also recommend measures that will enhance the global
competitiveness of local parts suppliers.
SECTION
28
. Funds. — The BOI may collect fees for the
assessment/verification/accreditation of the net foreign exchange earned
by the assemblers as well as the local content attained by them. The
BOI may likewise grant honoraria to the members and staff of the
Technical Review Committee and incur operational expenses chargeable
against said funds subject to the rules and regulations of the
Commission on Audit.
SECTION 29
.
Government/Government-Authorized Purchases of Vehicles.
—
29.1 In view of the numerous motor vehicle models
now available in the market, ranging from Peoples' cars to luxury cars,
Light Commercial Vehicles and motorcycles, all government entities are
enjoined to patronize and give priority to locally-assembled units in
the purchases of vehicles, particularly for foreign-funded
projects.
29.2 Since the local motor vehicle industry
is now in a position to supply competitively-priced brand-new taxi
models, the Department of Transportation and Communications should
consider locally-assembled brand-new vehicles in its subsequent taxi
programs.
SECTION 30
. Penalties. —
Aside from the penalties imposed under M.O. 136 (s. of 1987) M.O. 157
(s. of 1988) and M.O. 160 (s. of 1988) the BOI may impose fines for
misrepresentation and fraud or non-compliance with terms and conditions
and/or cause erring assemblers to refund foreign exchange awards found
to be fraudulently earned.
SECTION 31
.
Incentives/Awards. —
31.1 In recognition of
outstanding assemblers, the BOI may grant additional credits and/or
give awards in equivalent net foreign exchange credits for high local
value added, research and development efforts, manpower skills training
and foreign investments received. It shall formulate the guidelines for
the determination and use of such additional credits which shall become
executory fifteen (15) days after publication.
31.2
In recognition of the efforts and prestige to be brought into the
country by Filipino assemblers who will export at least fifty percent
(50%) of their CBU motor vehicle production (seventy percent (70%) in
the case of foreign companies), the Board may grant a special package of
incentives to the said companies, such as reduced NFEE and local
content requirements.
SECTION 32
.
Amendments. — The BOI, after consultation with the industry,
may recommend to the President further amendments to these Guidelines,
taking into account the attainment of Program objectives, economic
conditions and local manufacturing
capabilities.
SECTION 33
. Separability
Clause. — The provisions of this Memorandum Order are hereby
declared to be separable and in the event one or more of such provisions
are declared unconstitutional, the validity of the other provisions
shall not be affected.
SECTION 34
. Repealing
Clause. — All other executive orders, memorandum orders,
administrative orders, rules and regulations, or parts thereof
inconsistent with the provisions of this Memorandum Order are hereby
repealed or modified accordingly.
SECTION
35
. Effectivity. — This Memorandum Order shall take
effect fifteen (15) days after publication in a newspaper of general
circulation.
Adopted: 26 Feb.
1996
(SGD.)
FIDEL V.
RAMOS
President
By
the President: