Toyota Motor Philippines Corp. (TMP) is stepping harder on the gas of localization, lifting domestic sourcing to sharpen cost competitiveness while pressing policymakers to revisit tariff disparities under a key trade pact with Japan.
Speaking at the 42nd Annual Joint Meeting of the Economic Cooperation Committees of the Philippines in Taguig City, TMP president Masando Hashimoto said the company now sources around 64 percent of the bill of materials for the Toyota Vios locally—up from 51 percent when production began in 2018.
The increase reflects expanded operations at TMP’s Laguna manufacturing base and deeper integration with Philippine ko suppliers, including the local production of critical components such as wiring harnesses.
“To pursue cost competitiveness, we need to reduce the portion of imported products and increase local sourcing parts,” Hashimoto said, noting that a single vehicle contains roughly 30,000 components—underscoring the complexity and long-term nature of localization.
While TMP is sourcing more parts domestically than ever, Hashimoto said sustained government support remains crucial to strengthening supplier capabilities and encouraging fresh investments across the automotive value chain.
At the same forum, he flagged what he described as mounting pressure from tariff gaps under the Japan-Philippines Economic Partnership Agreement (JPEPA). Japanese vehicle imports face tariffs of around 20 percent, he noted, while imports from the European Union, United States, China and South Korea “are or will be from zero to 5 percent tariff rates.”
“As Japanese look to remain competitive, could I ask what is the status or the direction of JPEPA review?” Hashimoto said.
Frederick Go replied that negotiations are ongoing but declined to elaborate, saying the issue should be formally addressed between the Japanese and Philippine governments.
