The Japan Philippines Economic Partnership Agreement or JPEPA

Timeline/Status

1. The bilateral FTA (free trade agreement) seeks to give a leg up to investments and
trade of goods and services through relaxation of tariffs.

2. The JPEPA is also geared towards easing the entry of Filipino nurses and caregivers
to Japan.

3. While others say it is vastly disadvantageous to the Philippines, others say it is a

long overdue pact- particularly because other countries like Malaysia, Singapore,
and Thailand have inked similar deals with no ill effect.

4. Local truck and bus manufacturers voiced their sentiment opposing tariff cuts
earlier than 2013. Government needs more time to place safeguards to protect the
industry and the environment.

5. The worries about JPEPA apparently stem from giving Japanese companies favored
status that might unduly and unfairly give them advantage over local and other
foreign companies such as manufacturers.

6. According to non-Japanese companies, ccording to BOI Head Cristino Panlilio, the

MVDP will be split into 4 subsections -
Passenger cars, motorcycles, trucks and Phil. Utility vehicles and electric and hybrid
vehicles- because each category has specific needs.

7. The addition of a subsection on the Phil. Utility vehicle and electric and hybrid
vehicles would address a market seeking alternative vehicles and help widen the
base of vehicle owners.

8. Also in November 2011, BOI plans to reissue the Automotive Exports Program
(AEP) or Executive Order 244 to continue granting a special incentives package for
exporters or CBU packs even as the agency is still having a hard time finalizing the
implementing rules and regulations of the MVDP.

9. As of 18 January 2011, the AEP has yet to wait until the next Congressional break
for the Lenten season in April before it could get implemented. The BOI had
prepared only the IRR for the Motorcycle Development Program and the
Importation of Used Motor Vehicles. These form part of the components of the
MVDP under EO 877-A.
10. The draft EO seeks to grant incentives for $ 50 million annual exports value or
exports of 5,000 CBUs a year. It also seeks to encourage more CBU exporters along
with local auto assemblers. At present, the Ford Motor Co. is the lone program
participant.

11. In summary: the EO on the AEP and the two IRRs were being rushed by the BOI for
the completion as the general guidelines for MVDP has yet to be ironed out. EO
877-A was among the last-minute executive orders approved by the Arroyo
administration in June 2010. Under the EO, its implementing guidelines should
have been out by August 30, 2010.

12. BOI Chairman Gregory Domingo has called for more time, saying he was not
convinced that the new MVDP would make the industry competitive 5 years from
now.

13. As a result, BOI is now back to square one and is awaiting for the completion of a
new study on the auto industry.