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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.

Suggested Citation

  • Rafaelita M. Aldaba, 2008. "Globalization and the Need for Strategic Government-Industry Cooperation in the Philippine Automotive Industry," Microeconomics Working Papers 22050, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:microe:22050
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    References listed on IDEAS

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    1. Aldaba, Rafaelita M., 2008. "SMEs in the Philippine Manufacturing Industry and Globalization: Meeting the Development Challenges," Discussion Papers DP 2008-15, Philippine Institute for Development Studies.
    2. Rafaelita M. Aldaba, 2007. "Assessing the Competitiveness of the Philippine Auto Parts Industry," Microeconomics Working Papers 22163, East Asian Bureau of Economic Research.
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    Cited by:

    1. Wignaraja, Ganeshan & Lazaro, Dorothea & DeGuzman, Genevieve, 2010. "FTAs and Philippine Business: Evidence from Transport, Food, and Electronics Firms," ADBI Working Papers 185, Asian Development Bank Institute.
    2. Rene E. Ofreneo, 2016. "Auto and car parts production: can the Philippines catch up with Asia?," Asia Pacific Business Review, Taylor & Francis Journals, vol. 22(1), pages 48-64, January.
    3. Quimba, Francis Mark A. & Rosellon, Maureen Ane D., 2011. "Innovation in the Automotive Sector of the Philippines," Discussion Papers DP 2011-17, Philippine Institute for Development Studies.
    4. Medalla, Erlinda M. & Ledda, Veredigna M., 2013. "Philippines-Japan Economic Partnership Agreement (PJEPA): An Initial Ex-post Review," Discussion Papers DP 2013-12, Philippine Institute for Development Studies.
    5. Rene E. OFRENEO, 2015. "Auto and Car Parts Production: Can the Philippines Catch Up with Asia?," Working Papers DP-2015-09, Economic Research Institute for ASEAN and East Asia (ERIA).

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    More about this item

    Keywords

    Philippines; automotive industry; Strategic Government-Industry; Globalization Cooperation;
    All these keywords.

    JEL classification:

    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy

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