THE Philippine Parts Makers Association (PPMA) is calling on the government to adopt a local content requirement (LCR) policy, modeled after Indonesia's highly successful approach, to breathe new life into the country's ailing automotive sector.At a recent press briefing, PPMA President Ferdi Raquelsantos highlighted the potential of the LCR policy to boost domestic manufacturing, generate thousands of jobs, and elevate the Philippines as a formidable contender in the Southeast Asian automotive market.'Indonesia's local content policy has been a game-changer for its automotive sector. By requiring automakers to source a significant percentage of components locally, they've built a robust supply chain and attracted major global players. The Philippines can achieve similar success if we take decisive action now,' Raquelsantos said.The proposed policy would be rolled out in phases — starting with a modest requirement and gradually increasing the local content quota. This gradual approach is designed to give manufacturers time to adjust while steadily fostering investment in local supply chains. 'To make this policy work, we need strong government support,' Raquelsantos emphasized. 'Incentives such as tax breaks, duty exemptions on raw materials, and grants for research and development are essential to make it financially viable for automakers to source components locally.'Beyond financial incentives, Raquelsantos pointed to the necessity of workforce development. 'Our workers are the backbone of this industry. We need to invest in training programs in advanced manufacturing and robotics, collaborating with universities and technical schools to build a skilled talent pipeline,' he added.Infrastructure upgrades also form a critical pillar of the PPMA's plan. The association is urging the government to develop modern industrial parks equipped with reliable utilities and efficient logistics networks to reduce production costs and attract further investment. 'Streamlining customs procedures and reducing bureaucratic red tape will make the Philippines a more attractive destination for automotive investment,' added Raquelsantos.The PPMA's initiative is not merely about reviving an industry — it's a strategic move aimed at transforming the automotive sector into a major economic engine. 'This is about creating jobs, boosting exports, and securing a brighter future for Filipino manufacturers. With the right support, the Philippines has the potential to become a competitive player in the region,' Raquelsantos said.In the coming months, the PPMA plans to work closely with government officials, automakers, and industry stakeholders to refine and implement the policy. With inspiration drawn from Indonesia's success, the association remains optimistic that a robust local content requirement could be the catalyst needed to unlock the full potential of the Philippine automotive industry.
