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

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  • Aldaba, Rafaelita M.

Abstract

The industry’s 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

  • Aldaba, Rafaelita M., 2008. "Globalization and the Need for Strategic Government-Industry Cooperation in the Philippine Automotive Industry," Discussion Papers DP 2008-21, Philippine Institute for Development Studies.
  • Handle: RePEc:phd:dpaper:dp_2008-21
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    File URL: https://serp-p.pids.gov.ph/serp-p/download.php?d=4379&s=3
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    References listed on IDEAS

    as
    1. Rafaelita M. Aldaba, 2008. "SMEs in the Philippine Manufacturing Industry and Globalization : Meeting the Development Challenges," Development Economics Working Papers 21955, East Asian Bureau of Economic Research.
    2. Aldaba, Rafaelita M., 2007. "Assessing the Competitiveness of the Philippine Auto Parts Industry," Discussion Papers DP 2007-14, Philippine Institute for Development Studies.
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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. 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.
    3. 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.
    4. 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).

    More about this item

    Keywords

    globalization; competitiveness; production networks; Philippine automotive industry;

    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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