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August 19, 2021

Philippine market growth slows in July

A new surge in virus infections in the Philippines has slowed the recent economic recovery and hit new vehicle sales.

By David Leggett

New vehicle sales in the Philippines expanded by just 4.7% to 21,499 vehicles in July 2021 from 20,542 units a year earlier, according to member wholesale data released jointly by the Chamber of Automotive Manufacturers of the Philippines Inc (CAMPI) and the Truck Manufacturers Association (TMA).

This follows much sharper growth in previous months as economic activity in the country rebounded from depressed year-earlier levels when the government imposed strict lockdowns across the country to slow the initial spread of the COVID-19 pandemic. GDP expanded for the first time in five quarters in the second quarter of 2021, by almost 12% year-on-year after plunging by 17% a year earlier.

A new surge in virus infections has slowed the recent economic recovery, however, and forced the government to re-impose strict social and business restrictions in early August.

The associations’ data shows vehicle sales rebounded by over 46% to 154,265 units in the first seven months of 2021 from 105,583 units in the same period of last year, with passenger vehicle sales surging up by close to 65% to 49,508 units and commercial vehicle sales up by almost 39% at 104,757 units.

CAMPI and the TMA last month said they expected the vehicle market to expand by 30% in 2021 after their members reported a 40% combined sales decline to 223,793 units in 2020.

Earlier this month the Philippine Department of Trade and Industry (DTI ) announced the discontinuation of safeguard measures imposed earlier this year on imported vehicles and ordered cash bonds paid by importers since February to be reimbursed. This will have a positive effect on the overall vehicle market in the second half of the year.

Last month the government announced a target for 10% of registered vehicles in the Philippines to be battery-powered by 2040. With production of internal combustion engine (ICE) vehicles expected to cease in major economies by 2035, the government claims the country will have no choice but to follow the global trend.

Patrick Aquino, director of the Department of Energy’s Energy Utilization Management Bureau (EUMB),said “the government is very much committed to making EVs mainstream sooner rather than later”.

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