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Workers seek safeguard duty on auto imports, citing impact on jobs

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car automobile assembly line

By Jenina P. Ibañez

THE Philippine Metalworkers Alliance (PMA) has submitted an application to investigate possible safeguard measures on imported automobiles to the Department of Trade and Industry, the first such application from a labor group in the Philippines.

Receiving the application was the DTI’s Bureau of Import Services.

PMA includes among its members iron, steel, electronics, and electrical workers, with affiliates in automotive companies.

Trade Undersecretary Ceferino S. Rodolfo said in a briefing Thursday that PMA’s assertion is based on a link between the surge in automobile imports and the decline in employment the domestic automotive industry.

DTI is evaluating PMA’s data alleging a surge in imports of brand new motor vehicles. The PMA said imports rose to more than 207,000 units in 2018 from 153,000 in 2014. These vehicles fall under the category of HS Code 8703, or motor vehicles principally designed for the transport of persons.




More than 80% of these Completely Built Up (CBU) vehicles come from Thailand, Indonesia, and South Korea.

“When they import CBUs, there is no opportunity to locally source some of the parts when you assemble them here,” Mr. Rodolfo said in Filipino.

He said that instead of producing vehicles in the Philippines for the domestic market, car companies import vehicles produced in countries like Thailand and Indonesia because the Philippines places no tariffs on automobiles from those countries.

The BIS is evaluating the corresponding data on the decline in parts production.

To apply for safeguard measures, the PMA has to prove a surge in imports, the injury or threat of injury to the domestic sector, and a causal link between the surge and the injury.

Mr. Rodolfo said that PMA has submitted data on the increase of imports and data on a decrease in full-time personnel in parts makers and automotive companies.

A representative from PMA said workers in the automotive industry have lost jobs due to downsizing, saying that Mitsubishi Motors Philippines Corp. declared more than 400 positions redundant last year and Isuzu Philippines Corp. temporarily laid off almost 100 employees earlier this year.

PMA Secretary-General Rey Rasing said in a phone interview that workers fear continued loss of jobs.

“That’s the reason why we wrote to DTI — so that there will be balance in the issue of importation and the protection of jobs. As a union, we want permanent jobs if automotive production is done here,” he said in Filipino.

He said that automotive imports only bring temporary precarious work, including commission-reliant sales work in dealerships.

Mr. Rasing said that excise taxes on automotive vehicles under the Tax Reform for Acceleration and Inclusion law in 2018 countered the impact of fiscal incentive programs designed to encourage investment and jump-start the industry.

The automotive industry has pointed to excise taxes for the sales slowdown last year.

With this application for safeguard measures, PMA is hoping for an increase in in-country production for domestic and export markets.

Mr. Rasing said any incentive program for the industry should incorporate worker protections

DTI is evaluating PMA’s application.

“We have to convene a technical working group on trade remedies to officially look at the application for safeguard measures,” Mr. Rodolfo said.

The technical working group, after three months, will submit recommendations for the Trade Secretary to consider.

BusinessWorld asked the Chamber of Automotive Manufacturers of the Philippines and the Association of Vehicle Importers and Distributors, Inc. for comment, but has not received a responses at deadline time.

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