In light of the pandemic, the Philippine government decided to extend the Comprehensive Automotive Resurgence Strategy (CARS) program—a move that favored both Toyota Motor Philippines (TMP) and Mitsubishi Motors Philippines (MMPC) as well as the local auto industry. For 2026, however, things are taking a turn.
In the 2026 General Appropriations Act, President Ferdinand Marcos Jr. vetoed seven of 10 items listed in the unprogrammed appropriations, equivalent to over P92.5 billion. One of which is the CARS program, and another is the Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE) program.
According to a report by Malaya Business Insight, the government has arrears of P3.99 billion in tax payment certificates from TMP and MMPC under CARS, while Rappler says fiscal support arrears are at P4.32 billion under the CARS program and P250,000 under the RACE program. Regardless of the actual total, one thing is certain at the moment: Neither CARS nor RACE will receive support from the government in 2026.
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The CARS program was launched during the previous administration of Benigno Aquino III to incentivize local automotive and parts manufacturing. The initial objective was to produce 200,000 vehicles in six years, which, as mentioned earlier, was extended due to COVID-19. Toyota enrolled the Vios while Mitsubishi enrolled the Mirage.
The RACE program, meanwhile, was introduced last year, with planned fiscal support of a maximum of P3 billion per manufacturer. Unlike CARS, however, the production target was only set at 100,000 units. According to the Board of Investments, both Toyota and Mitsubishi had already expressed their intentions to enroll under the RACE program.
Toyota has since spoken on the matter. You can read TMP president Masando Hashimoto’s full statement below:
“[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 six-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.”
We have also reached out to MMPC to ask for a statement, but have yet to receive a response. We’ll update this story as soon as possible. Malaya also reported that the BOI is already looking for funds to cover the arrears under the CARS program, so we expect to hear more updates on this in the coming days or weeks. We’ll bring you more as we have them.
