DTI chief urged European biz to invest in PH defense

DTI urges Mitsubishi to bring Xpander production to PH

The Department of Trade and Industry (DTI) is luring Japanese carmaker Mitsubishi Motors Corp. to assemble its multipurpose vehicle Xpander in the Philippines, according to a trade official.

This, as Mitsubishi committed to infuse investments in its manufacturing operation here during the official working visit of President Ferdinand R. Marcos Jr. to Tokyo, Japan last week.

Special Trade Representative Dita Angara-Mathay told trade reporters in an interview early this week that Mitsubishi aims to bring in the production of a new model to meet their volume commitment under the Comprehensive Automotive Resurgence Strategy (CARS) program.

“We’re really hoping because since the Xpander is very popular, we’re hoping that they will make the next generation Xpander here,” Angara-Mathay said, adding that Mitsubishi has production operations for this model in Indonesia.

Department of Trade and Industry (DTI)

Secretary Alfredo Pascual has encouraged European businesses to explore investment opportunities in the country’s defense sector.

However, she said the expansion plan of Mitsubishi is dependent on the extension of the CARS program.

Angara-Mathay said the Japanese car manufacturer is requesting for an extension of the CARS program by around two to three years.

“So that’s really contingent on the extension of our CARS program,” she added. “It’s very important that we get a firm response on the extension of the CARS program.”

Mitsubishi is one of the two participating carmakers under the CARS program for the local assembly of its Mirage model.

Under CARS, participating carmakers have to comply with the minimum volume sales of 200,000 units for their enrolled car models for them to benefit from fiscal incentives from the government.

However, the car industry was also hit by the coronavirus disease 2019 (Covid-19), slowing down vehicle sales at the onslaught of the pandemic.

In a luncheon meeting with the European Chamber of Commerce of the Philippines (ECCP) at Dusit Thani Hotel in Makati City Thursday, Pascual said the country offers huge opportunities in the defense sector as the government continues to implement its modernization program.

“We invite the EU to participate in this program so we will have a broader range of options. We would appreciate it if the EU could invest in some, if not all, of the manufacturing processes and equipment in the Philippines,” he said in his keynote speech.

Pascual added that putting up the facilities for manufacturing of defense equipment here will ensure the government of lower acquisition and maintenance costs to a “more reasonable level”.

Key suppliers of the country’s defense equipment are the United States, Israel, South Korea and Turkey, as well as European countries like France, Germany, Italy, Spain and Sweden.

“We need to diversify supply as well,” Pascual told reporters at the sidelines of the event. “We want to develop the manufacturing capability here.”

He said there is “no formal position on the part of the government” yet for a concerted action in developing the defense sector here, but it is an opportunity for the private sector to explore this area with the administration’s budget allocation for defense.

For 2023, the Congress increased the budget for Armed Force of the Philippines (AFP) Modernization Program to PHP45 billion.

The AFP is now implementing Horizon 3, or the third milestone of the modernization program, which will be rolled out until the end of the Marcos administration in 2028.

This has opened opportunities for defense suppliers to provide equipment to AFP as the new administration lists its new priorities. (PNA)