0lUti' of t:i.-
NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Th/rd Regular Session
)
SENATE
S. No. 3004
25 JUN-4 P5 37
RECfciVu' £V.
Introduced by Senator MARK A. VILLAR
AN ACT
TO STRENGTHEN THE COMPETITIVENESS OF THE PHILIPPINE MOTOR 
VEHICLE MANUFACTURING INDUSTRY
EXPLANATORY NOTE
The Philippine government has always prioritized economic sustainability and 
growth through creation of jobs and trade policies in pursuit for industry 
competitiveness. Aside from our natural resources which play a major role in yielding 
income, the State must adapt to globalization and play at parity with other countries in 
generating new and profitable market trades. Thus, the motor vehicle manufacturing 
industry was considered as a key driver of industrialization and economic development.
In response to this, in 1973, the Philippines, through the Executive Order No. 70 
or the Philippine Motor Vehicle Manufacturing Program (PMVMP) of then President 
Marcos Sr., started the government's initial venture in motor vehicle manufacturing. In 
2010, Executive Order No. 887-A or the Motor Vehicle Development Program (MVDP) 
was implemented, which generated an annual export revenue of over three billion US 
dollars (USD 3,000,000,000.00) from locally-produced parts. The following year, the 
automotive industry generated three hundred sixty-eight billion pesos 
(368,000,000,000.00) which is equal to four percent (4%) of the Gross Domestic 
Product (GDP) share, showcasing a substantial growth in this particular industry.


In addition, the automotive manufacturing industry generated empioyment, 
sixty-eight thousand (68,000) jobs in auto parts, and three hundred forty thousand 
(340,000) indirect jobs in auto-supporting industries.
However, figures stiii show that the Phiiippines lags behind other neighboring 
Southeast Asian countries. This also means missing out on opportunities for potential 
higher income and more job opportunities. From 1999 to 2023, the country only 
produced an average of 54,177 units as compared to Thailand with 1,423,074 units, 
Malaysia with 502,973 units, and Indonesia with 690,176 average units.
Therefore this bill seeks to enhance and elevate motor vehicle production to 
make way for more employment opportunities and a competitive motor vehicle 
manufacturing industry that will significantly contribute to the GDP of the country.
The immediate passage of this bill is earnestly sought.
MARK A. VILLAR


NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Third Regular Session
)
SENATE
S. No. 3004
',3ffup c‘ U5C
25 JUN-4 P5 37
RECEIVED
Introduced by Senator MARK A. VILLAR
AN ACT
STRENGTHENING THE COMPETITIVENESS OF THE PHILIPPINE MOTOR 
VEHICLE MANUFACTURING INDUSTRY
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
ARTICLE I
GENERAL PROVISIONS
1 
Section 1. Short Title. - This Act shall be known as the " The Philippine Motor
2 
Vehicle Manufacturing Industry Act'.
3 
Sec. 2. Declaration of Policy. - The State shall develop the national economy
4 
by promoting industrialization through competitive industries and by encouraging the
5 
participation of private enterprise.
6 
Recognizing that the Philippine Motor Vehicle Manufacturing Industry forms the
7 
core of the country's industrial strength and plays a vital role in economic development
8 
and nation-building, the following are the declared policies of the State:
9 
(a) The State shall develop a comprehensive policy that shall accelerate the
10 
sound development of the Philippine Motor Vehicle Manufacturing Industry
11 
thereby contributing to industrial capital formation, technology transfer,
12 
technical skills development, and employment generation;
13 
(b)The State shall ensure a balanced transition to open trade by fully
14 
developing the competitive capacities of the Philippine Motor Vehicle
15 
Manufacturing Industry and promoting greater participation in global value
16 
chains;
1


1 
(c)The State shall promote the maximum scale integration of vehicle
2 
manufacturing and the manufacture of its parts and components; and
3 
(d)The State shall integrate motor vehicle manufacturing into the overall
4 
transport sector policy to encourage objective market conditions for the
5 
locally-produced vehicles in the expansion and upgrading of the country's
6 
vehicle fleet.
7 
Sec. 3. Scope. - This Act shall apply to the range of activities in the Motor
8 
Vehicle Manufacturing Industry as defined under Section 4(e).
9 
Sec. 4. Definition of Terms. - As used in this Act, the following terms are
10 
defined as follows:
11 
(a) Board of Investments (BOI) refers to an attached agency of the Department
12 
of Trade and Industry created under Republic Act No. 5186, otherwise known
13 
as the "Investment Incentives Act";
14 
(b) Department of Trade and Industry (DTI) refers to the government agency
15 
created pursuant to Executive Order No. 133, series of 1987, Reorganizing the
16 
Department of Trade and Industry, its Attached Agencies, and for Other
17 
Purposes;
18 
(c) Fiscai Incentives Review Board (FIRB) refers to the Government Agency
19 
reconstituted under Republic Act No. 11534, otherwise known as the Corporate
20 
Recovery and Tax Incentives for Enterprises Act (CREATE), which administers
21 
the grant of tax incentives to registered business enterprises;
22 
(d) Motor Vehicie Manufacturing Industry refers to enterprises that are engaged
23 
in the manufacture of brand new motor vehicles, bodies (coachwork) for motor
24 
vehicles, and parts, components, accessories and systems of motor vehicles;
25 
(e) Nationai Transport Poiicy refers to the long-term development framework
26 
for the transportation sector formulated by the Development of Economy,
27 
Planning and Development (DEPDev), which shall be used by stakeholders as
28 
guidance in transport development, management, operations and use;
29 
(f) Phiiippine Deveiopment Pian (PDP) refers to the export development plan
30 
prepared by the DTI, which defines the country's annual and medium-term
31 
export thrusts, strategies, programs and projects jointly implemented by the
32 
government, export and concerned sectors; and


1 
(h) Strategic Investments Priorities Pian (SIPP) refers to the overall plan
2 
formulated by the BOI, in coordination with the FIRB, Investment Promotion
3 
Agencies, and other government agencies pursuant to the guidelines set forth
4 
in the CREATE Law.
5 
ARTICLE II
6 
ORGANIZATION, INSTITUTIONAL SUPPORT, AND STRATEGIES
7
8 
Sec. 5. Lead Agency. -The DTI through the BOI shall be the lead agency
9 
mandated to implement the provisions and attain the objectives of this Act.
10 
In order to strengthen its capacity to implement this Act, the DTI is hereby
11 
authorized to create the Motor Vehicle Industry Development Office (MVIDO) in the
12 
BOI, which shall be headed by a Director. The Secretary of the DTI shall determine
13 
the organizational structure and staffing pattern of the motor vehicle industry
14 
development office, in accordance with the revised compensation and position
15 
classification system subject to the evaluation and approval of the Department of
16 
Budget and Management (DBM) and in compliance with the civil service laws, rules
17 
and regulations, and other pertinent laws.
18 
Sec. 6. Nationai Motor Vehicie Manufacturing Deveiopment Roadmap — The
19 
President of the Republic of the Philippines shall approve a six-year National Motor
20 
Vehicle Manufacturing Development Plan, hereinafter referred to as the "Roadmap"
21 
prepared by the BOI in consultation with concerned stakeholders and endorsed by the
22 
Motor Vehicle Manufacturing Development Council.
23 
The Roadmap, which shall be integrated into the PEDP and the PDP, shall define
24 
the Industry's annual and medium-term manufacturing and export targets, key
25 
industry issues, and programs and strategies to support manufacturing and export
26 
thrusts. The Roadmap shall also identify priority development products and/or niche
27 
models, which shall be characterized by high manufacturing value-added and with
28 
high potentials for economic efficiency, as the primary focus of incentives. Annual
29 
updates shall be done to monitor the results and targets identified in the Roadmap.
30 
Sec. 7. Motor Vehicie Manufacturing Deveiopment Councii. - For the purpose
31 
of coordinating the formulation and implementation of policy reforms to support the
32 
Roadmap, the Motor Vehicle Manufacturing Development Council, hereinafter referred
33 
to as the "Council", shall be created to act as the central planning, coordinating and


1 
monitoring body and national advisory committee for the comprehensive and
2 
integrated policy on motor vehicle manufacturing industry development.
3 
Sec. 8. Composition of the Councii - The Council shall be composed of the
4 
following:
5 
(a) Secretary of the DTI as Chairperson;
6 
(b) Vice Chairperson and Managing Head of the BOI and Undersecretary for
7 
Industry Development and Trade Policy of the DTI as Co-Vice Chairperson;
8 
(c) Director General of the DEPDev;
9 
(d) Secretary of the Department of Finance;
10 
(e) Secretary of the Department of Environment and Natural Resources;
11 
(f) Secretary of the Department of Energy;
12 
(g) Secretary of the Department of Transportation;
13 
(h) Secretary of the Department of Science and Technology;
14 
(i) Secretary of Department of Public Works and Highways;
15 
(j) Commissioner of the Commission on Higher Education;
16 
(k) Commissioner of the Philippine Competition Commission;
17 
(I) Director General of the Technical Education and Skills Development
18 
Authority;
19 
(m) Four (4) representatives from the private sector, one of whom shall be
20 
appointed as Co-Vice Chairperson: Provided, That the representatives shall
21 
have a proven track record of direct involvement in manufacturing and the
22 
development of the motor vehicle industry; and shall be nominated in a
23 
process determined by key industry players and/or organizations
24 
representing the motor vehicle manufacturing industry; and
25 
(n)Two (2) representatives from the academe/research community: Provided,
26 
That the representatives shall each be of recognized competence in fields
27 
of: (1) automotive industrial, economic and trade policies; and (2)
28 
automotive engineering and technology.
29 
Except for the representatives from the private sector and academe/research
30 
community, any member of the Council may designate an alternate with a rank not
31 
lower than Undersecretary or its equivalent to represent their respective offices in the


1 
Council: Provided, That the designated alternate must be fully authorized to decide on
2 
behalf of the members.
3 
Upon the effectivity of this Act, the President of the Republic of the Philippines
4 
shall appoint the four (4) representatives from the private sector and the two (2)
5 
representatives from the academe/research who shall serve for a term of two (2)
6 
years. Only citizens of the Philippines shall be members of the Council. In case of
7 
vacancy, the appointed successors shall serve only the unexpired portion of the term
8 
of his predecessor.
9 
Other heads of executive agencies, private organizations, or individuals may be
10 
called upon by the Council to attend any Council meeting and to assist the Council to
11 
resolve issues and problems that concern their respective offices.
12 
Likewise, heads of executive agencies, private organizations or
13 
individuals shall respond to the queries of the Council within two (2) weeks from the
14 
time such queries are received.
15 
Sec. 9. Duties of the Council. - The Council shall function solely as a central
16 
planning, coordinating and monitoring body and national advisory committee to the
17 
DTI as the lead implementing agency of this Act.
18 
The Council shall have the following duties:
19 
(a) Advise the DTI Secretary on the implementation of the Plan;
20 
(b) Periodically review and assess the performance of the Plan and prospects
21 
of the industry;
22 
(c) Provide a forum for discussing and proposing solutions to motor vehicle
23 
manufacturing industry-related problems, and emerging industry issues;
24 
(d) Recommend measures to support the positioning of the Philippines as an
25 
alternative production and export hub in the ASEAN region;
26 
(e) Recommend measures that would hasten the development of innovative
27 
technologies, niche products and high-value added manufacturing activities;
28 
(f) Recommend measures to increase the domestic market performance of the
29 
motor vehicle industry;
30 
(g) Recommend measures to address constraints in the development of the
31 
motor vehicle manufacturing industry; and


1 
(h) Perform such other acts as may be necessary or incidental to the exercise
2 
of its functions and discharge of its duties.
3 
Sec. 10. Meetings of the Council. —The Council shall meet at least once every
4 
quarter: Provided, That the Chairperson may convene the Council anytime whenever
5 
it is deemed necessary.
6 
The members of the Council shall not receive any compensation: Provided, That
7 
appointive members shall be entitled to per diem ^or each meeting actually attended
8 
at the rates to be formulated by the Council.
9 
Sec. 11. Operation of the Council. -The Council shall immediately convene and
10 
function one (1) month after the effectivity of this Act.
11 
The MVID created under Section 5 hereof shall act as the Secretariat for the
12 
Council.
13 
ARTICLE III
14 
INCENTIVES
15
16 
Sec. 12. Fiscal Incentives. - The Philippine motor vehicle and motor vehicle
17 
component manufacturing industries are hereby declared as priority investment
18 
sectors that shall form part of the country's four (4) successive SIPPs registered
19 
business enterprises of the Philippines and motor vehicle component industries shall
20 
be entitled to pertinent fiscal incentives granted under Title XIII (tax incentives) of the
21 
national internal revenue code of 1997, as amended.
22 
Sec. 13. Industry Development Programs. - The DTI, through the BOI, in
23 
coordination with the FIRB and other pertinent government agencies, shall
24 
recommend an incentive strategy to the FIRB approval, similar to Executive Order No.
25 
182, series of 2015, otherwise known as the "Comprehensive Automotive Resurgence
26 
Strategy Program."
27 
The incentive strategy shall provide time-bound, targeted, performance-based
28 
and transparent fiscal support to integrated vehicle manufacturing and automative
29 
supporting industries. Such programs shall be endorsed by the Council and approved
30 
by the President.
31 
In addition, the DTI through the BOI and in coordination with the
32 
aforementioned government agencies, shall formulate and implement programs to
33 
support the development of motor vehicle manufacturing supporting industries.


1 
ARTICLE IV
2 
PRIORITIZATION OF DOMESTICALLY MANUFACTURED VEHICLES IN
3 
PUBLIC PROCUREMENT
4
5 
Sec. 14. Government Procurement of Motor Vehicles. - Subject to pertinent
6 
laws, rules and guidelines on the procurement of motor vehicles, the national
7 
government, including government-owned or controlled corporations (GOCCs), and
8 
local government units (LGUs) shall prioritize the procurement domestically
9 
manufactured motor vehicles which shall be at least fifty percent (50%) of their
10 
existing motor vehicle fleet, unless when no such motor vehicles meeting the required
11 
specifications and possessing the capabilities and desired quality of the procuring
12 
entity are manufactured or produced in the Philippines.
13 
Likewise, subject existing laws, rules and guidelines on the lease or rental of
14 
vehicles, the national government, including GOCCs and LGUs shall give preference to
15 
the lease or rental of motor vehicles from service providers that can provide a motor
16 
vehicle fleet of at least fifty percent (50%) domestically manufactured vehicles
17 
acquired in the five (5) years preceding the date of procurement, unless no such
18 
vehicles meeting the required specifications and possessing the capabilities and
19 
desired quality of the procuring entity are manufactured or produced in the Philippines.
20 
ARTICLE V
21 
FINAL PROVISIONS
22
23 
Sec. 15. Implementing Rules and Regulations. - Within three (3) months after
24 
the effectivity of this Act, the DTI through the BOI shall, in consultation with all the
25 
stakeholders concerned, promulgate the Implementing Rules and Regulations of this
26 
Act.
27 
Sec. 16. Oversight Committee. - There is hereby created a Congressional
28 
Oversight Committee, hereinafter referred to as the Philippine Motor Vehicle
29 
Manufacturing Industry Congressional Oversight Committee (PMVMI-COC), with
30 
representations from the Minority, to be composed of five (5) members from the
31 
Senate, which shall include the Chairpersons of the Senate Committees on Trade,
32 
Commerce and Entrepreneurship; Public Services; and Appropriations, and five (5)
33 
members from the House of Representatives, which shall include the Chairpersons of
34 
the House of Representatives Committees on Trade and Industry; Transportation; and


1 
Appropriations. The PMVMI-COC shall be jointly chaired by the Chairpersons of the
2 
Senate Committee on Trade, Commerce and Entrepreneurship and the House of
3 
Representatives Committee on Trade and Industry. It shall meet at least every quarter
4 
of the first two (2) years and every semester of the third year after the approval of
5 
this Act of review the implementation thereof, and recommend the necessary remedial
6 
legislation or executive measures: Provided, That the PMVMI-COC shall cease to exist
7 
after five (5) years upon the effectivity of this Act.
8 
The Council shall submit the Plan and a report on the implementation of this
9 
Act to the PMVI-COC not later than the first day of December every year.
10 
The Secretariat of the PMVMI-COC shall be drawn from the existing personnel
11 
of the Senate and House of Representatives Committees comprising the PMVMI-COC.
12 
Sec. 17. Appropriations. - The amount necessary to carry out the initial
13 
implementation of this Act shall be charged against the current year's appropriations
14 
of the DTI. Thereafter, such amount as may be necessary for the continued
15 
implementation of the Act shall be included in the annual General Appropriations Act.
16 
Sec. 18. Repeaiing Ciause. - Any law, presidential decree or issuance, executive
17 
order, administrative rule or regulations contrary to or inconsistent with the provisions
18 
of this Act is hereby repealed, modified or amended accordingly.
19 
Sec. 19. Separabiiity Ciause. - If any provision of this Act is held
20 
unconstitutional or invalid, the remainder of the Act or the provisions not otherwise
21 
affected shall remain valid and subsisting.
22 
Sec. 20. Effectivity. - This Act shall take effect fifteen (15) days after its
23 
publication in the Offidai Gazette or in a newspaper of national circulation.
Approved,