ABSTRACT
Like most developing countries, the Philippines had been enthralled by the possibility of developing its own automobile industry. Not only was this considered a ‘prestige industry’, it was also thought to possess the characteristics of an industry in which, with the strong backward and forward linkages it could create, possibilities for technological learning were large. It could help spur development in many upstream industries, such as in materials, metals, machinery, chemicals and the electrical and electronics industries. Technological learning was also made possible, so it seemed, by the industry’s standardized level of technology. This made it less costly for investors from developed countries to transfer technology and for recipients from developing countries to absorb it. Thus the car industry easily became a target for industry development via import-substitution protection policies in many developing countries, the Philippines included.1
