End of Honda production in Philippines won’t greatly affect economy, says DTI’s Lopez

The impending end of Honda's production operations in the Philippines next month is driven by a slowdown in the global market but does not directly reflect the economic situation in the country, according to the Department of Trade and Industry (DTI) on Monday.

"Hindi maiwasan na may ganitong kumpanya na mayroong global headquarters decision nila na nagra-rationalize sila—pinipili nila 'yung kung anong branch ang bubuksan nila, isasara nila—in their regular management ng kanilang negosyo," DTI Secretary Ramon Lopez said in an interview on Dobol B sa News TV.

He underscored that multinational companies are always scouting for areas where production cost is lower.

Lopez said that one of the factors for higher production costs in the Philippines could be the relatively expensive price of electricity.

Nevertheless, he said, Honda's decision should not be a cause for alarm.

"Hindi tayo mababahala na malaki ang impact nito at ang ating ekonomiya'y malakas pa rin, solid ho, 6% ang growth pati manufacturing bumabawi na rin siya, nasa 4% siya," he added.

Honda Cars Philippines Inc. (HCPI) announced on Saturday that it would cease production operations at its Sta. Rosa, Laguna plant next month.

Lopez dismissed speculations that the soon-to-be halted local manufacturing of Honda cars has something to do with the slump in car sales due to higher excise tax under the Duterte administration.

"In 2018, may factor po 'yun pero nag-recover na sila noong 2019 ng sales. Ibig sabihin, hindi iyon ang dahilan. Maraming ibang factor," he said.

Lopez added that it should not also be viewed as a vote of no confidence in the government.

"Wala pong koneksyon 'yun dahil ang lakas nga ng approval rating ng ating Pangulo eh," he said.

The DTI Secretary also said that Honda has vowed to provide a "generous" separation pay for the workers who will be affected by the closure of the company's plant in Laguna.

He added that many investors in the manufacturing, energy, infrastructure, and agribusiness sectors have expressed intent to enter the Philippine market. — Dona Magsino/BM, GMA News