This paper presents a study of how decisions on the automotive complementation project have been made in the Philippines. The process of decision-making involves both the private and government sectors because the scheme, although focused on the private sector, necessarily requires government participation in the form of laws to support the automotive industry and to establish a link with ASEAN at the committee meetings where government officials make decisions on matters of regional interests.

Industrial complementation in the ASEAN definition is a system of schemes for the manufacture of different products within an industry or related industries in ASEAN countries. The scheme involves both existing and new products of industries whose production is duplicated in a number of countries. The idea is to allocate the production of such products or their components to the member states, preferably where there are already existing industries, in order to achieve economies of scale.

State of the Automotive Industry

The Philippines had a modest production of 671, 874 vehicles in 1975. There was one car for every 100 people; one commercial vehicle for every 150 people and one motor-cycle for every 238 people. Gross National Product was figured at P40.8 million in 1974 and P43.203 million in 1975. Per capita income based in 1967 constant prices was US$304 in 1974 and US$327 in 1975.

The Philippine automotive industry developed from a network of distributors and dealers selling built-up vehicles from 1916 to the five or six years of reconstruction. After World War II, the assembly phase of the automotive industry was brought about by the imposition of full import control which was partly due to the pressure of diminishing foreign exchange reserves. Assembly plants for completely knocked down (CKD) packs were then created. The fragmentation of the small market for cars and the existing tax and tariff structure, however, prevented the industry from developing beyond the assembly stage.