PH is becoming a hub for motorcycle production

Published May 28, 2021, 6:30 AM

by Bernie Cahiles-Magkilat

The Philippines is becoming a motorcycle production hub in the region with local producers, the latest of which is Honda Philippines Inc., now exporting locally made units, Trade and Industry Secretary Ramon M. Lopez said. 

Trade and Industry Secretary Ramon M. Lopez

“Honda will start exporting its motorcycles to New Zealand this quarter,” Lopez announced at the Security Bank’s 2021 Economic Forum The Future of the Philippine Manufacturing Industry on the future of motorcycle manufacturing in the country as he cited the growing number of foreign motorcycle producers in the Philippines.

Other recent developments in the industry include Yamaha’s expansion in Batangas to produce new models in the country creating 1,000 more jobs.

Other expansions by local producers include the Ayala-led KTM operation for the assembly of big bikes for the domestic market, as well as export to China and other ASEAN countries. 

Today, Lopez said, there are about four Japanese motorcycle manufacturers and assemblers 

In addition, there are about 12 from China, and one European. 

“I think this is really a fast growing sector for transportation and mobility,” he said.

Based on DTI monitoring, Lopez said the domestic motorcycle industry grew by 22 percent as of January 2021 compared to the previous year.

Japan External Trade Organization (JETRO) Manila Office Investment and EPA Advisor Tomohiro  Ando cite the huge Philippine market for motorcycles of more than 2 million units annually as unique in the world. 

“I think in the long term the Philippines has good potential,” he said referring to potentials in the local market and as production base for exports to other ASEAN countries. With production volume of more than 1 million annually, Ando said this should motivate investors. He also cited the competitive factor in the country with the improvement in market access because of the regional free trade agreements that the Philippines is a part of.

Meantime, Lopez said that DTI has been courting the big guys in the manufacturing sector to consider the Philippines if not set up research and development. 

This is the reason for the DTI’s push to make the Philippines also an AI Center for Excellence and R&D capabilities so that “We can really attract all those big companies to do more high value adding services

here in the country.”

He noted of the decision of Dyson to set up its R&D center in the Philippines. 

 “So we’re inviting more and more of the you know Dyson-like companies to consider Philippines,” said Lopez adding the DTI is talking more of hyperscalers, those that can build more data centers and infrastructures here in the country.

 “As you know in Singapore, Vietnam are reaching saturation point, and that’s the reason why we’re pushing for Philippines also as the alternative location for those kinds of operations that are high technology,” he said. 

He said that very competitive incentive packages await mega investors and R&D facilities under the CREATE Law. In addition, the President is also allowed under the law to sweeten an incentive package to very strategic investments.

Under the law, corporate income tax rate on large corporations will go down to 25 percent from the current 30 percent and 20 percent on micro, small and medium enterprises. Projects also enjoy special CIT of 5 percent for a certain period once their income tax holiday expires. Aside from the regular tax perks, companies are also given 50 percent tax deduction on their expenses for training and R&D expenses.