The Philippine government has dealt a blow to local automotive manufacturing as President Ferdinand Marcos Jr. vetoed support for the Comprehensive Automotive Resurgence Strategy or CARS program and its replacement, the Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE) program.
In the approval 2026 General Appropriations Act (GAA) or national budget, the president vetoed over P 92.5 billion of unprogrammed appropriations. Among them are two unprogrammed appropriations (UAs) centered around local automotive manufacturing. P 4.32 billion of fiscal support arrearages under the CARS program was removed as well as P 250,000 from CARS’ replacement, the RACE program.
In a press briefing, Acting Executive Secretary Ralph Recto confirmed that neither CARS nor RACE will not be funded in 2026 because “excess revenue was not expected for 2026.”
The CARS program or Executive Order 182 was signed by then-president Benigno Aquino III in 2015 as a means to promote new investment in the local automotive industry.
The thrust of the CARS Program is to provide time-bound, and output or performance-based fiscal support to attract strategic investments in the manufacturing of motor vehicles and parts thereof.
CARS is intended to augment and enhance the policy directions of existing motor vehicle development programs towards ensuring a resurgent automotive industry that supports innovation, technology transfer, environmental protection, and SME development; enable the country’s automotive industry to seize market opportunities opened by the ASEAN Economic Community and deepen its participation in the regional supply chain; and boost the manufacturing capability of the overall industrial sector, spur growth of SMEs and create more jobs in the country.
For its part, the Board of Investments (BOI) says that they will look for funds that will cover the government’s arrears.
Meanwhile, its successor, the RACE program was due to be implemented via a Joint Administrative Order (JAO) in 2025. Considered more flexible or relaxed compared to CARS, RACE would have a 100,000-unit minimum (compared to the 200,000-unit in CARS).
RACE targets to cover three specific models of four-wheeled internal combustion engines (ICE) that will be locally manufactured. In return enrollees will stand to receive a Fixed Investment Support not exceeding more than 40 percent of capital expenditure.
Toyota Motor Philippines president Masando Hashimoto released an official statement regarding the government’s move to stop funding both CARS and RACE in 2026:
“Toyota Motor Philippines (TMP) shares and supports the same objectives with the Philippine government on nation-building through its participation in the CARS Program. TMP made major investments to meet the target of 200,000 units of the Toyota Vios within the 6-year time frame.After six years into the CARS program, we believe it has been a win-win concept between government and private sector in attracting foreign direct investments and at the same time provided benefits to the manufacturer and the consumers. We would like to underscore how sustained government support through industry development programs such as CARS is critically important for competitiveness as observed in the region.We hope for continued mutual trust and collaboration with the government to attract future investments, generate employment, enhance technology transfer, strengthen domestic parts makers and ensure a vibrant manufacturing environment in the Philippines.”
Sa bagong Pilipinas eimport na natin lahat 👏👏👏. Bigas import, sibuyas import, galunggong import
ReplyDeleteToyota here mentions local Vios production. Toyota might increase their selling price to offset the lost subsidies.
ReplyDeleteMost likely 20,000 Peso price increase.
DeleteToyota still increases the prices of their vehicles every year.
Innova and tamaraw included
DeleteInnova and Tamaraw aren't included in that program.
DeleteToyota and Mitsubishi are the only ones benefit from these subsidies.
ReplyDeleteFoton barely benefit from it.
Toyota and Mitsubishi can surely do without those incentives.
Of course they can but there's the high chance that they pass the cost of the lost subsidies to customers.
DeleteFor the past few years, did anyone feel the benefit of CARS? Were there more employment, lower cost of vehicles, increase in industrial activity? Did it benefit only Toyota and Mitsubishi?
ReplyDeleteHope we get a more comprehensive report about the success or failure of the CARS program to get a better understanding as to why the current admin sacked it.
This should be "a one step back, two step forward" set-up by the government. The money for CARS must be diverted to lower the price and improve reliability of electricity supply, which eventually results to more manufacturing investors to coming in..... but bureaucracy/politicians don't work this way, hence PH's steep fall from the 50s promise to 21st century malaise.
DeleteAnother shit move of PH government
ReplyDeleteOther countries try to promote local manufacturing but Philippines just blowing off even the existing ones lol
No wonder manufacturing industry is so down in the Philippines
Only Toyota benefits from it..Mitsubishi doesn't benefit much from it so does Foton.
DeleteChina's subsidies regularly get criticized but they really are what's needed to have a proper manufacturing sector.
DeleteI guess this just removed any hope of the hot selling DNGA vehicles to be built locally (even if there were no plans in the first place). And whatever that additional model Mitsubishi wanted to make locally (ironically pledged to BBM) will probably be delayed or be not pursued even LOL.
ReplyDeleteToyota won't locally manufacture DNGA vehicles here in the Philippine market due cost issues..Wigo,Raize,Avanza,Yaris Cross and Veloz remains in Indonesia..Ativ is in Thailand.
DeleteThat additional model that Mitsubishi plans to manufacture in the Philippine market is just the Mirage hatchback with Dynamic Shield design.