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Globalization and the Need for Strategic Government-Industry Cooperation in the Philippine Automotive Industry

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  • Rafaelita M. Aldaba

    (Philippine Institute for Development Studies)

Abstract

The industrys lack of competitiveness, absence of economies of scale and a weak supply base are the fundamental issues that must be addressed in order to strengthen the industry and integrate it with regional production networks of foreign automakers. The entry of cheap, smuggled second-hand vehicles has put tremendous pressure on the industry. Immediate government action to address smuggling and design a coherent set of policies and a comprehensive strategy to improve industry competitiveness is urgently needed. A temporary adjustment program is necessary to help both assemblers and parts makers face competition in the future and more importantly, in preparation for the implementation of zero tariffs under the AFTA in 2010. If smuggling continues and our competitiveness remains weak, the auto industry may just be a thing of the past as auto companies shift from CKD to CBU operations. This is the reality of doing business under the globalization age.

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Bibliographic Info

Paper provided by East Asian Bureau of Economic Research in its series Microeconomics Working Papers with number 22050.

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Date of creation: Jan 2008
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Handle: RePEc:eab:microe:22050

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Keywords: Philippines; automotive industry; Strategic Government-Industry; Globalization Cooperation;

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  1. Aldaba, Rafaelita M., 2008. "SMEs in the Philippine Manufacturing Industry and Globalization: Meeting the Development Challenges," Discussion Papers, Philippine Institute for Development Studies DP 2008-15, Philippine Institute for Development Studies.
  2. Aldaba, Rafaelita M., 2007. "Assessing the Competitiveness of the Philippine Auto Parts Industry," Discussion Papers, Philippine Institute for Development Studies DP 2007-14, Philippine Institute for Development Studies.
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Cited by:
  1. Medalla, Erlinda M. & Ledda, Veredigna M., 2013. "Philippines-Japan Economic Partnership Agreement (PJEPA): An Initial Ex-post Review," Discussion Papers, Philippine Institute for Development Studies DP 2013-12, Philippine Institute for Development Studies.
  2. Quimba, Francis Mark A. & Rosellon, Maureen Ane D., 2011. "Innovation in the Automotive Sector of the Philippines," Discussion Papers, Philippine Institute for Development Studies DP 2011-17, Philippine Institute for Development Studies.
  3. Ganeshan Wignaraja & Dorothea Lazaro & Genevieve DeGuzman, 2010. "FTAs and Philippine Business : Evidence from Transport, Food, and Electronics Firms," Trade Working Papers, East Asian Bureau of Economic Research 22880, East Asian Bureau of Economic Research.

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