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Wednesday, May 12, 2021

PH Government Offering Tax Incentives For Hyundai To Locally Manufacture Ioniq Hybrid


The Philippine government is eyeing Hyundai to assemble the Ioniq Hybrid in the Philippines. This was after the DTI’s Board of Investments met with the Embassy of the Republic of Korea in the Philippines, the Embassy of the Republic of the Philippines in South Korea, and the DTI’s Foreign Trade Service Corps.

The meeting centered around the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act and the Strategic Investment Priority Plan (SIPP).

“With CREATE in place, we are encouraging South Korean firms, especially those engaged in strategic activities like EV/EV parts and semiconductor manufacturing to invest or expand in the country and take full advantage of this landmark legislation. We are strongly optimistic of a resilient post-pandemic recovery as the fundamental structure and strength of our economy remain intact. We positively respond to the easing of quarantine restrictions,” DTI Undersecretary Ceferino Rodolfo said.

Although nothing is set in stone yet, the DTI says that if Hyundai does decide to assemble the Ioniq Hybrid in the Philippines, it will get to enjoy the same incentives as semiconductor firms under the CREATE Act. Some of the touted benefits include an Income Tax Holiday of between four to seven years. Even after the said Income Tax Holiday, Hyundai may enjoy an additional 50 to 100 percent income tax deduction, depending on several factors.

While this sounds like a good plan, it’s highly unlikely that Hyundai will opt to put up assembly for its Ioniq Hybrid. The CREATE Act is focused on foreign companies who will invest and sell primarily for the Philippine domestic market. This doesn’t bode well for the Korean automaker which has chosen Indonesia as its regional manufacturing hub for ASEAN, including the Philippines.

Regardless, South Korean Ambassador Kim Inchul lauded the Philippine government’s efforts for economic reform like the CREATE Act. “I believe that the CREATE Act will play a key role to improve the business environment and stimulate foreign investments to the Philippines including investments from Korean corporations through lowering corporate income tax rates,” he said.

He also remarked on the further development of South Korea’s bilateral relationship with the Philippines. “Once Regional Comprehensive Economic Partnership (RCEP) comes into effect in the near future and the Korea-Philippine FTA is signed, our bilateral economic and trade partnership will further leap forward,” the South Korean ambassador continued.

10 comments:

  1. Hyundai should build a Manufacturing Plant here in the Philippines.

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    1. They have one in Laguna. They make the Eon, the Accent and the H350 there.

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    2. Really? No wonder their models are bare bones and feature stripped.

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  2. Hyundai Philippines is already using the old Star Motors/Universal Motors plant for the locally assembled Accent.

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  3. Is there even a demand locally for the Ioniq Hybrid to justify it being manufactured here in the first place where cars made locally cost more to sell elsewhere to provide alternate avenues for sale?

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    1. The automotive assemblies here of Toyota, Mitsubishi etc only made specific models depending on the preferred top choice of consumers. Since Vios, G4 mirage and Accent are the preferred choice and demand of sedan by many here, they decided to build here to cater the demand and it was not for export

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    2. Yes. I know that. My comment is pointing it out as, is there even a local demand enough to justify it being manufactured here?
      And even just for a moment if they do manufacture here, no one in their right mind would want the finished stock to just gather dust in the warehouses. So that would mean they be forced to export a more expensively manufactured vehicle or else risk it wasting away in storage.
      So, is government going to guarantee the minimum orders then as icing/incentive?

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  4. hmm why not also give incentives for the general automotive industry here? I don't think there's much demand for hybrids yet, cause if that's the case we should see Atlis Hybrids and Corolla Cross Hybrids flying off dealerships. I barely even see gas versions of those two cars.....

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  5. as long as there's law giving tax breaks for hybrids and other alternative sources, acceptance will be very slow......

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    Replies
    1. sorry I meant to say "as long as there's NO law" :P

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