Automotive Industry in the Philippines

March 4, 2022 | Industry Report on the Automotive Industry

Fig 1 Automotive Unit Sales

The Automotive Industry is projected to grow by 20% to 30% in (in Thousands) Source: CAMPI and TMA
2022 but number of vehicles sold will still be below pre-pandemic
level. 2021 268

The Automotive Industry in 2021 performed better compared to previous year and could continue to do so in 2020 224
2022. The increase in demand for vehicles could be attributable to the positive progress in vaccine inoculation in
the country which led to lenient COVID-19 quarantine restrictions on businesses and mobility despite recent
surges of COVID-19 cases. 2019 370

Vehicle sales data showed an increase in units sold by 20% to 268,488 units in end-2021 from 223,793 units from Fig 2 Importation of Transport
a year ago (Fig 1). Growth in demand is also seen in vehicle importation as it grew by 29.3% year-on-year in 2021 Equipment (USD Billions)
to USD8.22 billion from USD6.36 billion in 2020 (Fig 2). Consumer appetite for new vehicles remains a challenge Source: PSA
as Consumer Loans (Universal and Commercial Banks) for automotive vehicles continued to decline. Consumer
Auto Loans as of September 2021 declined by -15.7% to PHP307.08 billion from PHP364.45 billion in the same
2021 8.22
period in 2020 (Fig 3).

Although the Industry is showing a better trajectory in recent quarters, it is worth noting that the Industry still 2020 6.36
needs to catch-up to its pre-COVID levels.

Risks and Opportunities: 2019 10.98

Easing to Alert Level 1 as COVID-19 cases decrease and vaccination increases

The Philippines has administered around 135 million doses of COVID-19 vaccine as of February 21, 2022. Fig 3 Auto Loans (PHP Billions)
Already 60% of the population is fully vaccinated, assuming every person needs 2 doses. Almost all of the major Source: BSP

cities in the country fully vaccinated at least 70% of their residents. While daily cases have gone down below
2,000 for 11 straight days. These factors have allowed the government to ease the Alert Level in NCR and other 9M 2021 307.08
regions to Alert Level 1. This will boost economic activity in the country and provide more employment.

9M 2020 364.45

9M 2019 362.89
 Omicron Variant disrupted auto sales growth in January AUTHORS
The restrictions imposed to curb the spread of the variant hit the productivity of the industry. The Chamber of
Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA) Maria Theresa M. Blaza
reported a decline of -11.2% in vehicle sales in January 2022. mmblaza@rcbc.com
8894-9000 Local 9929
Higher oil prices because of the conflict in Russia and Ukraine could dampen demand
The ongoing conflict between Ukraine and Russia has affected the global energy market. As of February 27, Dominique H. Ravelas
th
2022, oil prices in the Philippines have gone up for 9 straight week. Since the beginning of the year, gasoline dhravelas@rcbc.com
prices have increased by PHP8.75/liter, diesel by PHP10.85/liter, and kerosene by PHP9.55/liter. The upward 8894-9000 Local 2250
movement of fuel prices is expected as the conflict in Russia-Ukraine borders, a key channel for oil trade in
Gamaliel John C. Tono
Europe, continues.
gctono@rcbc.com
8894-9000 Local 2250
Outlook:
Rose Bernadeth D. Añasco
Automotive industry is showing signs of recovery. The move to put NCR and other regions to Alert Level 1 in rdanasco@rcbc.com
March 2022, where intrazonal and interzonal travel are fully allowed and establishments to operate at full 8894-9000 Local 2250
capacity, would further boost the economic recovery as well as the automotive industry.
www.rcbc.com
However, the uncertainty in the global market brought by the Russia-Ukraine conflict could potentially be an
obstacle not just for the automotive industry, but the entire economy as well. With rising fuel prices amid the
conflict, we can expect a trickling down effect to commodities and other items, including motor vehicles.

Sources:
https://www.bsp.gov.ph/SitePages/Statistics/BSLoanAccounts.aspx?TabId=4
https://business.inquirer.net/337651/carmakers-hopeful-of-finishing-year-with-20-sales-growth
https://www.philstar.com/business/2022/01/13/2153483/automakers-log-20-faster-sales-2021
https://business.inquirer.net/338682/vehicle-sales-up-20-in-2021-but-soft-growth-worries-analyst
https://doh.gov.ph/covid19-vaccination-dashboard
https://www.philstar.com/headlines/2022/02/15/2161010/galvez-vaccination-rate-above-70-most-regions
https://www.washingtonpost.com/business/2022/02/23/gas-prices-ukraine/
https://www.philstar.com/headlines/2022/02/27/2163670/oil-prices-go-9th-straight-week
https://www.pna.gov.ph/articles/1168201

Disclaimer: The information, data, tables, views, analysis, and advice presented in this report are based on primary and secondary sources deemed reliable by RCBC and are prepared solely for
informational purposes. This report should not be deemed as providing advice, recommendations, and endorsements to purchase or sell any security or product. Neither RCBC nor any of its
subsidiaries, affiliates, directors, officers and employees makes any warranty or representation, express or implied, for the contents’ accuracy, completeness, or fairness or assumes any legal liability or
responsibility for any party’s use, or the results of the use, of any information in this report. Users should make their own verification and evaluation prior to making any investment decision. Information
is provided as of the date of the report and the contents are subject to change without prior notice. Any use, reproduction, disclosure, distribution, dissemination, copying, or printing of this report without
RCBC’s prior written consent or approval is strictly prohibited.