Fiscal support for car manufacturing in the Philippines has found an unexpected source: ‘declared and verified savings’ of the Department of Public Works and Highways from the 2025 budget.
You may recall that President Ferdinand Marcos Jr., in signing the 2026 General Appropriations Act (GAA), vetoed P92.5 billion worth of unprogrammed appropriations, including funding for the Comprehensive Automotive Resurgence Strategy (CARS) and Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE) programs. For CARS alone, the vetoed fiscal support item amounts to P4.32 billion.
In a joint statement, the Department of Budget and Management (DBM), the Department of Trade and Industry (DTI), and the Department of Finance (DOF) assured CARS participants that “existing budgetary items under the programmed appropriations of the FY2025 GAA” will be used to settle government obligations under the program. In particular, the agencies are looking to tap unused DPWH funds.
“Based on the Tax Payment Certificates (TPCs) already issued and validated, the government has the capacity to settle dues to participating car manufacturers, including Toyota and Mitsubishi, as well as eligible autoparts makers,” the statement reads. “These payments will be supported by available FY2025 savings, subject to the approval of the Office of the President and compliance with all applicable fiscal and legal requirements.”
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Any other validated obligations not yet covered “may be considered for inclusion in the proposed FY2027 National Expenditure Program.”
The Toyota Vios and the Mitsubishi Mirage are produced locally under CARS, which was launched during the Aquino administration. Originally, the target was to produce 200,000 units in six years, but a five-year extension was granted in 2023 due to setbacks from the COVID-19 pandemic.
No funding source has been identified for the RACE program, which has a 100,000-unit production target and planned fiscal support of up to P3 billion per manufacturer.
The Chamber of Automotive Manufacturers of the Philippines (CAMPI), of which Toyota Motor Philippines and Mitsubishi Motors Philippines are members, issued the following statement in response to that of DBM, DTI, and DOF:
“The Chamber of Automotive Manufacturers of the Philippines welcomes the announcement of a funding solution for CARS Program incentives. We thank the concerned agencies—the Department of Trade and Industry, Board of Investments, Department of Budget and Management, and the Department of Finance—for its prompt action to resolve the issue on CARS incentive funding.
“This gives renewed confidence in our industrial policy and puts the automotive sector back on track for long-term investment planning. CAMPI and its members look forward to the implementation of the RACE Program, which will be instrumental in industry recovery and growth.
“CAMPI will continue to work with the Government and our auto-supporting industries in coming up with programs and policies to sustain automotive manufacturing in the Philippines.”
